Why You Didn’t Get Government Funding for Your Small Business in Canada
You’ve heard the success stories of ordinary Canadian entrepreneurs (like you) who are successful at obtaining government funding. Government grants, government loans, tax breaks and credits, or just help from the provincial and federal governments, but what about you?
Why did this Mississauga, Ontario business owner get $112,780 in government funding, and what about this Winnipeg, Manitoba mechanic shop with his $12,750 in government support? You see the stories, you hear the news, but do you know how to get funding yourself? For your own small business?
Let us share with you the three main reasons why you didn’t get government funding for your small business in Canada.
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But before we tell you the three reasons, you have to understand two small points.
First point: Government funding, despite a large audience saying “it doesn’t exist,” does exist. In fact, billions of dollars are handed out each year to small business owners across Canada.
Second point: When you apply for government funding, you need to expand your knowledge to include multiple levels of government and not just one Canadian government. We will explain this in the three main reasons why you failed to get funding from the government below.
Now that you understand that government funding does exist and that the government is not just one office building, we can get started on the reasons why you didn’t get funded.
Other than the obvious reason of never having applied for funding, here are the three main reasons why those who successfully applied were denied government funding.
Failed Reason #1
The number one reason why many small business owners who apply for government funding get denied help is because they are unaware or uneducated on exactly what they are applying for. This is nobody’s fault; it is just how the system works.
The government of Canada does not do much to promote the availability of funding programs or financial support to entrepreneurs. So how is anyone supposed to find help? Or know anything about government funding, how to get it, where to get it from, and whether they are eligible?
When the average small business owner finds information on government funding, they often jump to the conclusion that they will get funded and apply right away.
The fact is that even though government funding exists and billions of dollars are available, you have to be able to locate the funding available to you.
What does that mean?
There are multiple levels of government such as local (city), provincial (province), and federal (Canada-wide). This means that when searching for funding, you need to understand the different funding agencies that operate at each level and the programs they provide.
Since the research process is very time-consuming and your time is better spent working on your business, we recommend using our Funding Database, which already has the details compiled for you. Simply select the criteria that best match your needs and click search. Get access to the Funding Database now.
Once you find funding agencies that can provide funding in the right location, keep in mind that many agencies fund specific needs. Knowing what you need funding for is very important.
If you need funding to purchase equipment, you should look for programs that fund equipment purchases. If a program only funds hiring staff, it will not be right for you unless your need is hiring staff.
To summarize, in order to avoid being denied government funding, consider that funding depends on your location, your industry, and your funding needs.
Failed Reason #2
The next reason many small business owners get denied government funding is the lack of a business plan.
A business plan shows potential investors and government funding agencies that you are serious about your business, that you have knowledge, and that you have completed the necessary research. Lacking a business plan is like lacking money when trying to buy a house; it will not get you very far.
Thousands of applications are closed and stamped “denied” simply because a business plan was not included.
Most business owners skip the business plan step because it is long, confusing, and difficult. Outsourcing a business plan can cost anywhere from $2,500 to $5,000 or more, which can be a major expense for a startup.
To take advantage of our Business Plan Builder Tool and create your plan quickly using a simple, step-by-step, fill-in-the-blanks system, visit here.
A business plan tells the funding agency who you are, what you need, why you need it, and how you will use it. It is the story of your business, and how you present it can make the difference between success and failure.
Before you make this mistake, get your business plan made.
Failed Reason #3
The final reason small business owners are denied government funding is due to bad timing, poor credit score, and not knowing exactly what they need.
While this sounds simple, thousands of applications are denied because applicants do not follow instructions and expect results without meeting requirements.
If a funding program’s deadline has expired, do not apply. Instead, set an alert to re-check when the program reopens or look for another program.
If you have a very poor credit score and even a bank will not approve you for a credit card, your chances of receiving large government funding amounts are low. Always review the program criteria before applying.
If a program funds up to $50,000 for equipment purchases, do not request $150,000 for renovations.
When reviewing why your application was denied, ask yourself the following questions:
- Did I apply to the right place?
- Did I apply with a business plan?
- Did I meet the criteria?
If you do all of the above and are still denied funding, try again.