Guide to Getting Government Funding in Canada
Are you one of those Canadians who thinks that the government should give you money to start your small business just because you’re Canadian, just because you pay your taxes? Maybe you feel like you deserve funding?
Well join the thousands of others who feel the same way but never, ever do anything about it. Getting government funding for your startup or existing business isn’t easy. It’s possible and likely, but it’s not just a form to fill out and done, you’re funded.
If you are looking to get funding for your small business and you’re willing to do something about it, this guide to getting government funding is the perfect read for you.
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Now if you’re an entrepreneur or somebody that has an entrepreneurial mind, you may be asking yourself, “why do I need a guide to tell me about getting government funding, can’t I just go to the government and apply?”
Sure you can. Here is the government website.
Once you’ve had a chance to look through the government website and the wealth of information, hopefully you know how to make sense of it all and apply to get funding.
If however you need a bit of help getting your business started, getting your business plan done and getting help searching for government funding programs, the guide to getting government funding should be a good read.
What is Government Funding?
Before you start your search for government funding and before you apply for the funds, it’s important to know what government funding is and why it’s offered by the government.
The government takes money from taxes and uses it to provide it to small business owners across the country in order to support entrepreneurship, improve the economy by creating jobs and build a better country to live in for all Canadians.
It’s simple really. The government takes a small percentage from everybody and gives a certain amount of money to certain people starting or expanding a business in order to help them achieve success. When they achieve success, they hire locally, create jobs, sell locally, stimulate the economy and as they make more money, the amount they pay in taxes increases. The government then gets that money back in order to repeat the cycle again.
Sure you can be upset about that, but that’s the way the government works and the reason why Canada is a great place to live in and to build a business.
Who Is Government Funding For?
A typical question that we here at CanadaStartups.org get asked very often is, “is there funding for me”, “who is government funding for”, and “can my business get funding?”
Government funding is given to those who are Canadian residents, who show potential and who meet the criteria set by the various funding programs and agencies.
While not all are eligible, the potential to obtain funding is very clear. If you meet the criteria and qualifications set by the agencies who provide the funding, it is just a matter of time.
Typical criteria to obtain government funding include:
- Be a Canadian resident
- Have a business plan
- Your credit score (not all agencies look at this)
- Meet program deadlines
- Apply to the correct programs
What Can Government Funding Be Used For?
When applying for government funding, one of the first steps is to ensure you have a well-developed business plan. If you have a business plan, it should clearly tell you what you need funding for.
Government funding is available for many business purposes, such as:
- Startup and expansion costs
- Hiring and training costs
- Purchase of tools, equipment, supplies and inventory
- Research and development costs
- Improving cash flow
- Import and export costs
- Marketing and advertising
- Purchase of a business or land
- Leasehold improvements
Here is a helpful article on 7 things you can get government funding for.
The government is very strict in terms of what you can use the funding for. Certain funding agencies create programs based on specific needs and only provide funding for those purposes.
If funds are used incorrectly, you may be required to pay them back immediately or the funds may be taken away and a fee charged, depending on the program.
This means that if you’re applying for funding to purchase tools and equipment, use the funds only for that purpose. You will need to provide documentation on your spending.
Getting Government Funding Tip:
When applying for funding, make sure your business plan breaks down your funding needs. If you need $100,000 in total funding, don’t apply for one $100,000 program. Instead, break it down into categories such as marketing, equipment and hiring.
This gives you the option of applying to multiple programs. The same applies when searching for funding. Instead of searching for “$100,000 to start a business”, search for “$10,000 for marketing” or “$25,000 for equipment”.
The Types of Government Funding
Government funding comes in many different forms.
Most people immediately think of grants, assuming they are the only and best option.
Since there are multiple types of funding programs, it is important to understand each option before applying.
The most common government funding types include:
Government grants
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Repayable government grants
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Non-repayable government grants
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Partial contributions
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Conditionally repayable grants
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Wage subsidies
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Low-interest or no-interest loans
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Government-guaranteed loans
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Tax breaks and tax credits
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Non-monetary funding programs
This is where many people give up and feel confused about which option is best.
Government grants are usually the most desirable option.
Most of the time, grants are free money provided for a specific purpose and do not need to be paid back.
Some grants are partially repayable or require matching funds. Others are conditionally repayable, meaning you may only repay them once your business becomes profitable.
Government loan programs include low-interest, no-interest and government-guaranteed loans. These are useful when banks are not an option, but you should ensure a loan is the right choice before applying.
Tax breaks and tax credits are also excellent funding options, although they require you to spend money first in order to receive savings or refunds.
Other government programs may not provide direct funding but instead offer consulting, guidance, assistance and workshops, which are especially helpful for first-time business owners.
Best Type of Government Funding to Apply For
When starting or expanding a small business in Canada, funding is necessary. With so many options available, it can be difficult to know which one is best.
The best approach is to build your business plan, identify your funding needs and work backwards.
Not all funding programs will be right for you. Some are location-specific, industry-specific or designed for specific funding needs.
Once you apply filters to the hundreds of available funding programs, you may be left with only a few you are eligible for.
A grant is typically the best option if you qualify. However, you should apply for any program you are eligible for, whether it is a grant, loan or tax credit.
The best funding option is the one that helps ensure your business success.
Apply for Government Funding for Your Small Business
This is a go-getter’s guide to getting government funding. If you don’t take action, nothing will happen.
Before applying for funding, ensure you have a business plan ready. If you need help, our Business Plan Builder Tool offers a step-by-step way to create the perfect startup business plan.
Once your business plan is complete, our experts can help review it, provide actionable feedback and assist with your funding search using our