Business Challenges and Success
If you follow CanadaStartups on Twitter Canada_Startups, you probably know about this weeks Q&A session. We had a lot of interesting questions come to us from our followers and onlookers.
One question that seemed to be reoccurring is: “How do I get free government funding for my small business?”
Before we get into that, let’s break that question up into a few different sections.
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What is government funding?
Government funding is provided through the Canadian government, its various agencies, and funding programs. These funding agencies create different programs (over 900 different ones) in order to help grow the Canadian economy by creating jobs and interest in small business.
Government funding is available, but it may not be available for everyone. Certain conditions need to be met before you can obtain funding. There are different forms of government funding which include government grants, government loans, tax breaks, relocation incentives, and consulting services.
Is government funding really free?
The term “free money” comes to mind when somebody mentions government funding, but in reality, the only free money is potentially a government grant. However, do not be confused, as some government grants may not be 100 percent free money and may have specific conditions.
When applying for government funding, you will not have to pay to get the money. However, you may be asked to contribute, such as a down payment or a percentage. This depends on the funding program you are applying to. Some programs may simply ask you to fill out a form, send it in, meet the requirements, and apply in order to get the funding.
Why do some places charge for government funding?
If you are not able to find government funding information on your own, you can turn to third party sources and government funding consultants. These places do charge. We here at CanadaStartups.org fit into that category.
Our Funding Database is part of our membership and provides you access to all available funding programs, plus a funding application review service and access to our experts. So why charge when it is free? You can always go on your own and try it yourself.
The entrepreneurs we deal with would rather not spend weeks or months looking for programs to apply to with no guidance or extra help. Thus, a third party funding database can be very beneficial.
Another option is a consultant who takes a percentage fee of your government funding received. While this may sound appealing, keep in mind that the government does not allow this. Consultants are legally not allowed to ask for a percentage of the funding you obtain, although they may ask for your own money once funding approval happens.
The reason for this is that when you apply for funding, you are applying for a government program that only provides funding for the needs that you have. The government is not providing money to pay a consultant. Any consultant fees would need to be paid out of pocket prior to receiving the funds, which may take months.
How do I get government funding?
The first step is to ensure that you have a business plan created and that you know what you need funding for. From that point, find the funding program that best fits your needs and ensure that you meet all of the criteria.
After applying, it becomes a waiting game while your funding application is viewed, reviewed, and processed.
What do I need to get government funding?
Each funding program has a different set of rules. To know these rules, you must first know the programs. Finding funding programs is the most difficult part, as there are over 900 different funding programs across the country for various provinces, industries, and funding needs.
Once you locate the funding program that is the right fit for your small business, follow the criteria and apply.