FAQs: Canadian Grants & Loans for Businesses

Mentor Works focuses on Canadian government funding for small business and provides a comprehensive knowledge-based approach to help you find the resources to grow your business.

Our clients come from a range of industries including manufacturing, food processing, agriculture, and information and communication technology, each with their own unique business needs. There are, however, many common points between industries and we have found that many clients have similar questions when they first approach Canadian government grants and funding.

Below are answers to some of the more common questions to help you better understand how Canadian government funding, grants, and repayable loans work. If you are looking for information related to specific Canadian government grants and loans or other funding programs, please refer to our Canadian Government Funding Table for more details.

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You can also find many answers to your funding questions in our free funding workshops and webinars; click the button below to browse our upcoming events.

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How do I find information on small business grants and loans?

Watch this 90-second video on how to access information on all types of Canadian government grants for small business and loans programs on our website.

You can also read more details on various financing and growth options, or contact us.

General Questions

What Canadian government grants and funding programs are available? How do I find out more information?

Both the provincial and federal governments offer different kinds of small business funding programs and services – through initiatives such as the FedDev Southern Ontario Prosperity Initiatives.

Unfortunately, Canadian government funding information is not consolidated on any one website. We know where to find this information and have access to the hundreds of programs that are available. Please refer to our Canadian Government Funding Blog for more information on the various small business funding grants and low interest repayable loans available to Canadian businesses.

What are the eligibility factors for Canadian government funding?

In order to be eligible for any Canadian government funding, businesses need to be incorporated for at least two years and have at least one person on payroll, although each program has their own eligibility requirements. This is to establish the financial stability of the organization. Generally speaking, most Canadian government grant programs are positioned to support small and medium enterprises (SMEs) and small businesses.

Some programs also have restrictions on the number of people on payroll, requiring a minimum of 5, 15 or 50 employees. Other programs have revenue thresholds of over $500k. Please consult our blog for specific program eligibility factors.

Do I need to have more than 100 employees to apply?

No. There are many programs that support from 1 to 50 employees. In fact, some small business grants and loans require fewer than 50 employees. Canadian government grants and loans are tailored to support small businesses and each have their own eligibility criteria.

Are Canadian small business grants only applicable for incorporated companies?

No, there are multiple Canadian small business funding programs available for unincorporated businesses, although this funding is limited. Some funding is offered to both not-for-profit and for-profit companies. Review each program’s eligibility factors in our Canadian Government Funding section. If you are still unsure about whether or not your Canadian small business qualifies for grants and loans, contact us to learn more.

Is my financial performance important? Do I need a business plan?

To be awarded Canadian government funding, a business’s financial health is important. Generally, a current balance sheet and income statement must be submitted with the application. At minimum, some financial information will be required, such as a letter from your financial officer.

Many of the repayable funding and larger development grant programs may require a business plan. In most cases, a template for a business plan or strategic plan is available for download to support the process.

There are also several Internet resources to support the planning components. As part of our process, we support the development of customized business and project plans to act as supporting documentation for your funding application where necessary.

Are there programs dedicated to Southern Ontario?

Yes! With the new development of The Economic Action Plan and FedDev Ontario, there are many programs that support the Southern Ontario Advantage. The Provincial and Federal governments have recognized the need to invest in the region and have developed a range of Ontario government grants available to small businesses in the area.

How does Canadian government funding compare to SR&ED tax credits?

The process for obtaining tax credits and incentives is significantly different. It is often more complex and time consuming to pursue these refunds compared to the typical Canadian government grant process.

As well, business owners are entitled to SR&ED tax credits once per year. As such, no immediate or regular cash flow improvements are gained. Small business grants and Canadian government funding programs are available at different points throughout the year and can provide immediate cash flow impacts and direct support to on-going projects.

SR&ED tax credits are considered entitlements; Canadian and Ontario government funding programs are not.

Types of Business Funding

Can I obtain business expansion funding support with Canadian government grants and loans??

The greatest number of small business grants and repayable loans focus on business expansion. Non-repayable grants of $50,000 are a great place to start, but there are also larger strategic funds for capital equipment, global expansion and access to new markets.

Many government programs, whether federal or provincial, focus on creating highly skilled jobs and increasing long-term employment opportunities.

Consider business expansion funding if you can add jobs, and achieve viable and sustainable growth.

Does the Canadian government support expansion plans into the US or globally?

A primary objective of government funding is to keep highly skilled talent in Canada, increase the number of skilled jobs in Canada and ensure their long-term sustainability.

As long as expansion plans ensure jobs are maintained at a Canadian-based operation, the financing options to expand are significant. Consider the CME SMART, Yves Landry, or AgriMarketing programs to name a few.

Do Canadian government funding programs support start-ups?

Yes, but not to the same extent as established SMEs. Generally you need to be incorporated for at least two years to apply for non-repayable funds (small business grants), but there is a considerable amount of funding to support activities such as product and process applied research; engineering design; technology acceleration; product testing; certification; marketing studies; proof of concept; piloting and demonstration; problem solving; and pre-commercialization activities.

You can focus on groups like MaRS that provide market research studies and business project support from local universities and colleges. Mentor Works also offers resources specifically for startups and entrepreneurs. Startups can download our Free Funding Checklist to ensure that your business is aligned for future funding success. Our Funding Insider Program is also tailored to helping startups and entrepreneurs grow through financing, business resources, and specialized grants and awards.

Regional Innovation Centres (RICs) are another good source for provincial and federal funds. They also provide great business planning tools and support to help you determine the right strategies for growth. As a first step, contact your local business centre for more information on start-up resources and support.

I am interested in hiring recent post-secondary graduates. Are there Canadian government funding programs available?

There are various hiring grants to subsidize the onboarding of new graduates into your business, as long as the college or university graduate is not currently employed in their area of expertise or already employed at your business.

Many of these programs require that graduates come from Southern Ontario post-secondary institutions and have graduated in the last five years. Some have age requirements as well – most often under 31 years.

Some hiring initiatives will specify or provide incentives for hiring from certain programs (i.e., science, engineering or math, and marketing).

Many government supported programs require that you find your graduate before applying. This is not optional – it is part of the process.

If there are no hiring grants and incentives available when you are ready to expand your workforce, you can also look into training funding to get them certified or improve skills to ensure they will excel in their role.

Do Canadian government funding programs only support research and development?

No. Funding programs currently support many different areas of business: from research and development to capital investment to business expansion and human resources. Training, lean manufacturing & design, export expansion, workforce expansion, IT best practices, and energy efficiency projects are common activities that receive funding.

That is not to say the government does not recognize the importance of R&D in terms of our economy. Keeping talent in Canada is dependent on collaboration and partnerships with innovative businesses and R&D facilities at our post-secondary institutions.

Is there government support for commercialization and development?

Some government mechanisms address the business challenges around commercialization.

Initiatives tend to be sorted by pre-commercialization and commercialization eligibility factors. Sustainable Development Technology Canada (SDTC) and the Industrial Research Assistance Program (IRAP) are great programs to start with, depending on your sector. Also, depending on your industry and product you may be eligible for Investing in Business Innovation (IBI).

Are there Canadian government funding programs available for the retail or distribution sector?

Not great news. I would assume that the same way banks evaluate risk, the government follows suit. The government likely sees retail as higher risk, so funding is limited in this case. But don’t give up – even diligent effort can discover $50,000 per year to support growth.

Focus on regional centres like CFDC and Small Business Centres as well. You may also be able to leverage hiring and training funding.

Are there Canadian government funding programs available to support manufacturing companies?

Yes. In fact, many of the programs favour manufacturing companies.

The majority of government business funding does require that you complete some product design, development or research work at an in-house Canadian-based operation.

Read up on the eligibility factors found on program specific pages or contact us to discuss eligibility. For instance, some programs will deem software development companies or marketing companies to be eligible for manufacturing specific programs. The decision is based on the amount of product design and development completed on-site. Overall there are a significant amount of Canadian grants for manufacturing available.

I am in a distressed manufacturing region. Does this play a role in the approval process?

Dependent on the objectives of the funding program, this could be a significant factor in the approval process. Usually this is related to larger programs that establish a repayable loan with at least 50% support from the business. Grants for small business and Canadian government funding programs usually stress the importance of job creation, so this may play a more important factor than region depending on the program.

Application Process

How do I know which programs are suited for my business and growth strategies?

The first step in approaching Canadian small business funding is to determine your priorities. Determine your business plans and projects for the next 12-24 months then review program objectives to see what fits and select the Canadian government funding program that suit your projects.

You should also understand the funding cycle – when funds are available – and build this into your business model.

Is the application process complicated?

The application process is unique to each project and program. Review the requirements for each application or program and evaluate the risk, benefit, timelines and objectives before you begin.

With so many programs available, you can rate and select the one that is best for your business. Think in terms of problem, technical challenge or uncertainty, proposed solution, expected outcome and duration when evaluating the best projects.

You should also review the reporting process for each program. Examine what reports will need to be managed and completed during the life of the project. You may also need to keep reports for a determined period of time after completing a project.

By engaging with Mentor Works to support your funding journey, we support you through the entire process to ensure your projects are best positioned for Canadian government funding.

How long do I have to wait for approval on these programs?

Approval periods depend on the scope and complexity of your project and the Canadian government funding program. Some programs will respond after 48 hours, some take 4 to 6 weeks, while others may require a 4-to-10 month waiting cycle once the online application is submitted.

You should carefully research this information to set clear expectations, and to ensure that you carry out the correct activities for the specific funding program – so there are no additional delays. Many grant and loan funding programs will not fund activities that have already occurred. If you are looking for retroactive funding, tax credits and incentives are your best options.

Additionally, depending on the program there may be specified intake periods during which applications are accepted so you will need to time your application and project accordingly.

What is the success rate for approval?

This is dependent on the program that you apply for and whether you correctly address the program objectives and critical factors, such as eligible activities and expenses. Even if your application meets all of the program criteria, there is no guarantee that your application will succeed, however there are steps that your business can take to maximize your funding success rates.

Before you apply, be sure to carefully review the objectives of the funding program. If you cannot fully meet the requirements, move on to the next program. When you find a program where you can match all the criteria, your success rate will be much higher. Or you could contact Mentor Works directly to fast track your funding identification process. Be sure to let us know a bit about your business and project so we can accurately identify suitable programs.

Does the government track progress once I am approved?

Yes, but tracking methods vary. Some programs require reports each month, some at pre-established milestone dates and some at the end of the program only, where results have to be documented. Progress tracking is often related to how the money is dispersed.

How does a business determine the range of funding available to them?

As there are many different Canadian government funding programs available to support a range of projects and business activities, there may be multiple programs that your small business is eligible for. If you’d like to determine what you are eligible for, please contact us directly.

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