The Canadian government provides small business owners with funding to help with the various small business startup costs.
These funds often come in different forms of financial support, one being free government grants for small businesses.
One of the questions that often gets asked is “Are there free government grants for small businesses”, and who qualifies for grant money?
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Are there free government grants for small businesses?
While the “government grants” situation is a bit more complicated than a simple “yes” answer, there are free grant programs available for Canadian small businesses.
Government grants are often divided into a few different types of programs including:
- Non repayable government grants
- Partial contributions
- Conditionally repayable
- One time and renewable
Knowing and understanding these government grant program types can help you and your small business secure a free government grant.
Non repayable government grants
Non repayable government grants are free government grants for small businesses across Canada to take advantage of. These programs are exactly as they sound: money that the Government of Canada provides to your small business which you never have to repay. The reason this type of program exists is to help entrepreneurs across Canada create jobs and stimulate the economy.
While non repayable government grants are one of the best forms of free grant money, they are also one of the more difficult programs to qualify for since the qualification criteria is much more strict.
Partial contribution government grants
Partial contributions are very helpful free government grant programs which are pretty much the same as non repayable government grants. However, you as the business owner are required to provide a percentage of the total cost (more, less, or the same depending on the program and your needs). The government will provide a non repayable grant to you based on that percentage.
While this program is an excellent option for free funding, many startup owners avoid it due to the required partial contribution.
Conditionally repayable government grants
This type of grant funding is generally seen more as a “loan” due to the fact that the funds eventually have to be paid back. However, they are still excellent program types since you are provided funding without having to make interest or principal payments until a predetermined condition is met. This can often be negotiated, such as no payment for three years or no repayment until the business is profitable.
One time and renewable government grants
One time and renewable government grants are programs offered by the government to help small business owners fund a specific project or purpose. These funds are considered free government grant money and are provided for one project, which can often be recurring annually. Once you have been accepted into a program such as this, you can reapply for additional funding as long as the conditions remain the same.
This summarizes the main types of free government grants for small businesses in Canada.
Generally, non repayable government grant options are the best, but if you are accepted into any of the above mentioned programs, they are all excellent ways to get your small business funded.
Who qualifies for the free government grants?
Each government program that focuses on providing entrepreneurs with free grant money has its own criteria and requirements that applicants must follow in order to be eligible.
These requirements can often be as simple as:
- Being in the right location that the program funds (city or province)
- Providing a product or service in the correct industry
- Requiring the funds for a specific need or purpose
Other requirements may include having a solid business plan, acceptable credit, applying to the correct program, applying on time, and submitting all required documentation.
While not all free government grants for small businesses are the same, it is best to take the time to learn about and understand the program you intend to apply for before submitting your application.