The Southwestern Ontario Development Fund (SWODF) is a business expansion funding program that incentivizes companies to invest in new facilities and equipment. It attracts large-scale projects that have a significant impact on business productivity and create new employment opportunities within the company. Through the program, successful applicants will receive grants or a combination of grants and repayable funding (government loans) to offset project costs.
SWODF business investment funding supports most projects up to 10-15% of eligible costs to a maximum $1.5M in Ontario government grants.
To qualify for SWODF funding, Southwestern Ontario businesses must provide a minimum investment of $500,000, have at least 10 employees at the time of application, and commit to creating at least 10 jobs during the project. Other eligibility criteria apply; continue reading to learn if this business investment funding is suitable for your expansion plans.
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Program Overview: What is SWODF Funding?
The Southwestern Ontario Development Fund (SWODF) is one of the most popular Ontario government funding programs available to support large-scale business investments. Through the program, companies can receive grants and loans to minimize the impact of expansion on company cash flows. By providing additional capital to support projects, manufacturers and other targeted applicants can grow faster and respond to opportunities more effectively.
Most applicants applying for SWODF funding will receive up to 10-15% of project expenses to a maximum of $1.5 million. Applicants with project budgets in excess of $10 million may qualify for an additional $3.5 million in repayable funding.
The SWODF funding program typically looks at the overall project size a business proposes to ascertain how much funding can be awarded. Smaller projects with less than $10 million in eligible project expenses are generally only provided with the non-repayable grant contribution, while larger projects surpassing $10 million in eligible expenses may also qualify for the grant plus an additional plus an additional no-interest loan of up to $3.5 million.
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Applicant Eligibility Criteria
To qualify for the Southwestern Ontario Development Fund, applicants must:
- Provide a minimum project investment of $500,000;
- Be located within Southwestern Ontario (see below);
- Be in a priority business sector (see below);
- Be incorporated and have at least three years of financial statements;
- Maintain at least 10 employees at the time of application; and
- Create at least 10 new jobs upon project completion.
What is SWODF’s Definition of Southwestern Ontario?
Applicant companies must ensure their business operates in Southwestern Ontario to qualify for SWODF. Eligible regions include:
- Waterloo; and
Project Eligibility Criteria
There are three types of projects that commonly receive Southwestern Ontario Development Fund grants and loans. They include:
- New investments into Southwestern Ontario businesses;
- Operational investments that improve productivity, innovation, and the potential to export goods; and
- Projects that increase high-value, sustainable jobs in Ontario.
SWODF is meant to provide cost-sharing support for business expansion activities, and therefore will not provide funding for:
- Relocation of business operations to other parts of Ontario or elsewhere;
- Recurring or ongoing operations such as maintenance or capital replacement;
- Acquisitions and buyouts; and
- Refinancing of existing business operations.
Expense Eligibility Criteria
The Southwestern Ontario Development Fund (SWODF) only accepts project costs that are one-time expenses essential to project completion. These may include:
- New machinery or equipment;
- Facility modifications, upgrades, or retrofits;
- Materials needed to configure or test production processes upgraded by the project;
- Internal labour fees;
- Specialized third-party consultants required to plan/execute the project;
- Training employees (either internally or through a third-party trainer); and
- Project permits, fees, and similar project-related expenses.
Project Expenses Ineligible for SWODF Ontario Government Funding
Some project expenses cannot be claimed through the SWODF program. These include, but are not limited to:
- Any recurring or ongoing operational costs, including labour;
- Overhead costs;
- Lease costs;
- Working capital costs;
- Marketing, sales, and distribution fees;
- Debt servicing costs;
- Vehicles and any off-site equipment;
- Replacement of capital equipment; and
- Purchase of land or buildings, or construction of a new building.
Success Stories: Previously Funded SWODF Business Expansion Projects
The Southwestern Ontario Development is constantly awarding businesses with funding to support capital investments. Some of the program’s best success stories include:
- Over $5 Million in Automotive Manufacturing Grants Awarded to Sodecia
- Automotive Supplier Toyotetsu Awarded $1.2M for Hot Stamping Expansion
- Armo-Tool Awarded Over $600k in Ontario Small Business Grants
- 10 Windsor Manufacturers Awarded $3M in Business Expansion Grants
Additional SWODF Funding Resources
- SWODF FAQ Blog: Still have questions about SWODF government business grants? Browse our answers to our most frequently asked questions.
How to Apply for the Southwestern Ontario Development Fund
To access SWODF funding, eligible Ontario-based businesses must complete a three-stage application process which includes:
- Completing an eligibility checklist to ensure suitability for the SWODF program;
- Discussing the proposed project with a SWODF representative; and
- Submitting a full application
Since SWODF maintains an open intake of applications, businesses that have a qualified project may submit a funding proposal anytime throughout the year. It’s often best to submit applications a minimum of 4-6 months ahead of the project’s anticipated start date to ensure adequate time for application review. Upon application approval, applicants can begin incurring funding-eligible expenses.
Discuss Your Upcoming Expansion Projects with a Government Funding Planner
Considering how SWODF can support your upcoming project? Contact Mentor Works to evaluate whether your project is a good fit. Our team can help you align your upcoming project for SWODF funding and streamline the application process with time-saving info collection documents and a dedicated team of writers.
Posted: October 31, 2012. Updated: December 19, 2018.