Government Funding Eligibility in Canada
One of the oldest questions that people like to ask when it comes to government funding in Canada is, “Am I eligible for government funding?”, or, “Can I get funding?”.
Well, there are many factors that come into play when discussing government funding for your small business, and if you should consider applying or not.
While every government funding program, be it a grant, a government loan, or a tax option, does have its own criteria one must meet in order to be eligible, there are certain people who should simply not bother.
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Below, we will discuss the five types of people who should stay away from government funding, but before we get into that, let’s take a minute and explain government funding.
What is government funding?
The Canadian government has many different funding options that individuals can apply to in order to help start up, or expand, their existing businesses in Canada.
These funding programs provided by the government can come from the local, provincial, or federal government and can be used to fund various expenses a business may have.
The funding amounts vary from business to business and program to program, but generally cover expenses such as hiring costs, wages, training costs, marketing expenses, renovations, and the purchase of tools, equipment, supplies, and inventory.
If you are starting a business in Canada, or expanding your existing one, you may be eligible for these government grants, government loans, and various tax options.
But, if you fit the characteristics of the below five groups of people, it is best to stay away.
5 People Who Should Stay Away From Government Funding
Before we get started, if you fit into one of these five groups of people, it is best to stay away and not bother applying to government funding, as you will be denied.
- A non-citizen
- Lazy and unwilling
- No money or investment of your own
- In urgent need of money (now or tomorrow)
- Bankrupt or owe on taxes
While these are somewhat generic points, let’s break each one down further to determine if you fit this and whether you should or should not apply to government funding options.
1. You are not a Canadian citizen or do not have permanent residency
One of the first requirements that the majority of government agencies have before they can give any government funding to a business is that the business owner must be a Canadian citizen or have permanent residency.
If you do not, it is not worth your time applying, as your applications will not be accepted.
While there are certain government funding programs for immigrants and newcomers to Canada, these programs are not specific to starting or expanding a business.
To counteract the requirement for being a Canadian citizen or having permanent residency, you may work with a business partner who is a citizen or has permanent residency.
2. You are lazy and unwilling to work towards your business
Government funding is free, which means all you have to do is have a business and apply. But it is not just given out to anyone and everyone. Instead, you have to earn it.
To earn it, you do have to work towards your business and convince government funding program agencies to give you the money. The best steps include creating a business plan, having properly planned financial statements, implementing a website, having a pitch deck presentation ready, and taking the time to explain how you will be using the funds you are applying for.
If you assume you will get funding simply because you are in business or are a Canadian citizen, think again, as you will be denied pretty quickly.
3. No money down or not willing to invest
As a business owner, or somebody looking to start up, you should have realized that everything costs money. The expenses to run a business are everywhere and are often hard to manage on your own. This is where government funding helps.
However, to receive government funding, if you are not willing to invest any of your own money, or take on some risk, most government funding agencies will deny your application.
When applying for government funding, you are asking grant and loan programs to trust you. If you do not invest your own money, it may appear that you do not trust yourself.
4. In urgent need of funding
Everyone needs money, especially when starting or expanding a business. Often, the money is needed immediately. However, government funding does not work this way.
Government funding is a timed process that requires planning and sufficient time for review and approval. After applying, it can take an average of two to six weeks to hear back. This timeline can change based on factors such as the amount required, the time of year, and application deadlines.
If you need money today, tomorrow, or within a week, most government funding agencies will ignore your application.
5. Bankruptcy or owing taxes
While credit is often a factor in government funding, it is not always a determining one. If you have bad credit, it may still be worth pursuing certain government funding options.
However, if you have declared bankruptcy and are still in it, your applications will be denied.
If you owe any taxes to the CRA, personal or business, the government funding options you apply to will be denied until those taxes are paid off.
These are just five types of people who would not be eligible to apply for government funding, though there may be other factors involved.
If any of the above applies to you, consider private investment options if no other solution exists. It is also recommended to improve your situation in the areas mentioned above before moving forward.
Government funding can be a great source of capital for a business if you are successful in obtaining it. The funds raised can often mean the difference between success and failure.
To apply successfully for government funding programs, ensure you have a business plan ready, determine the best funding options, and consider working with an expert who can provide step-by-step guidance, as the process can be complicated to navigate on your own.