How to Apply for Government Funding for Your Small Business
In the early stages of a small business startup it is critical to obtain the funding necessary to take your small business through the key startup stages and eventually through to the launch. This article will explain the process of government funding and what the right way is to apply for government funding.
While there are nearly a thousand government funding programs, your small business, if eligible for any funding, may only be successful at obtaining funding from a handful of those programs. Do not let this discourage you from applying for government funding, but let it be a lesson that you as a small business owner, when applying for funding, have to be extra careful to ensure that you meet all of the criteria, complete all of the requirements, and properly fill out a funding application. Otherwise you may simply be denied.
Before we get into the right way of applying for government funding programs for your small business, note that there are a number of factors that can determine if your small business may be eligible or not to receive any funding. These factors include, but are not limited to:
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- Your location
- Your industry
- Your funding needs (hiring, training, purchase of tools, research and development, advertising, etc)
- Funding amounts
- Your business plan
- Your credit score
- Time of year
- Funding program deadline
- And more
It is important to know that not all small business owners are eligible for funding from the government. To get started and get an idea of what is possible and how your small business may take advantage, we suggest you try the Small Business Startup Assessment Tool on our website. After answering a few questions, you will be shown a number of programs available and potential funding amounts. This is only a basic idea of what may be available, as deeper research into specific program criteria may produce different results.
When you apply for government funding, it is imperative that you understand funding does not happen overnight. In fact, the average small business owner spends between four to five weeks researching available funding programs before finding a few programs they can apply for. With professional help, and for those who use our Funding Database, this time can be reduced to a few days because all funding programs are organized in one place.
Once you find funding programs that may be right for you, applying to these programs may take anywhere from a few days to a few weeks, depending on the funding agency requirements and what you have prepared. Most programs require a business plan, and if you do not have one, it may take a few weeks to create.
After submitting your funding application for review, funding agencies may take anywhere from 30 days to over a year to respond. We have seen responses in as little as two weeks, while others have taken six months to a year.
The lesson here is that applying for government funding from start to finish may take anywhere between one month to six months, so be sure to get started sooner.
How to Apply for Government Funding the Right Way
Step 1: Prepare Your Business Plan
In order to be successful at applying for government funding, your first step should be to prepare a business plan for your small business. A properly developed business plan will prepare you for all aspects of small business, especially the financial side. If you are looking to apply for funding, it is important to know how much funding you need, when you need it, and what you need it for, as well as to prepare for the worst case if funding is not obtained.
Your business plan financial projections should clearly outline what you need funding for, at what stage, and how much is required.
You can outsource your business plan to a professional writer, which can cost between $2,500 and $5,000 depending on your industry. This can be a large expense for a startup. Alternatively, you can write it yourself or use tools such as the Business Plan Builder Tool to create a professional business plan. Members can also have their plan reviewed by business plan experts at no charge.
Step 2: Research the Programs
Once your business plan is developed, you should have a clear idea of how much money you need and what you need it for. This makes it easier to search for government funding programs and apply appropriately. Most startup-stage small businesses require funding for the following:
- Startup costs
- Hiring employees
- Training staff
- Purchasing tools and equipment
- Research and development
- Marketing and advertising
- Improving cash flow
Tip 1: Do not apply to a funding program simply because it is available. Apply only to programs that meet the top three criteria: location, industry, and funding needs, and ensure you meet all requirements.
Tip 2: If a funding program has a maximum funding amount, do not request the full amount. Break your needs into smaller amounts. Once funded once, it is easier to apply again.
Tip 3: Not all programs fund all purposes. Break down your needs and carefully review program criteria.
The reason there are so many government funding programs is that there are many different funding agencies across Canada. These agencies are not all connected and do not fund the same purposes. Some programs strictly fund businesses in specific industries, such as agriculture. Businesses outside those industries would be wasting time applying.
Researching available funding programs is key to success. Ask only for what you need. While receiving a large amount of funding may sound appealing, requesting too much often leads to denial, as programs aim to fund more businesses rather than fewer.
Step 3: Review, Apply, and Re-Apply
Once you identify programs you may be eligible for, it is crucial to complete funding applications correctly. Many small business owners are denied simply because they did not follow application instructions.
Consider how carefully you complete a passport renewal application. Government funding applications require the same level of attention and accuracy.
Read and re-read each application carefully. If possible, have someone else review it as well.
If you submit an application with errors and it is denied, you may not hear back for weeks or months. By then, it could be too late for your business. Take the time to review your application thoroughly, and consider registering for our membership to take advantage of the funding application review service.
If you are denied because you did not meet requirements or missed information, review your application and re-apply. Denials can also occur due to missed deadlines or exhausted funding. Do not give up. Re-apply when you are confident your application meets all criteria.