The Ultimate Guide to Government Funding for Small Business Owners in Canada
Small business owners and startup entrepreneurs is what drives the Canadian economy. Small businesses country wide create job (yes even with the minimum wage gone up), and they help the overall GDP (which ultimately helps us all). This forces the Canadian governments to give back and support entrepreneurship though various government funding programs and initiatives. To help create an understanding about government funding, and how it benefits small business owners across Canada, we’ve created the ultimate guide for government funding for small business owners in which we outline all about it.
What is Government Funding?
While the Canadian government believes that they make it very clear as to what government funding really is; they don’t. Thus many people, or small business owners are left completely unaware of government funding opportunities or are so misguided and misinformed that they rather not know about government funding.
That being said, the Canadian government doesn’t mislead people intentionally with this information - it’s just that they are simply overwhelmed with the information available and only focus on certain funding programs which are more known and are able to support more entrepreneurs. And from this problem; many smaller third party information providers, funding consultants and financial assistance groups are born to provide assistance to needing entrepreneurs.
So what exactly is government funding? Government funding refers to the assistance provided by the various government agencies across the country who strive to help small business owners and entrepreneurs achieve their entrepreneurial goals and find success. The financial assistance provided by these government agencies not only comes in the form of financial assistance but it can also be guidance, mentorships and support. Keep on reading to learn the different types of government funding programs and how or if they can benefit your small business.
The Misconceptions of Government Funding
When it comes to what people do know about government funding, you’d be shocked to hear. But you can’t blame the people for having these misconceptions about government funding, it’s just that there isn’t much available in terms of educating people on what government funding really is, who it’s for and how to get it - probably why we wrote the ultimate guide on government funding, to help you understand.
After dealing with thousands of people (many startups and many existing business owners), here is what we’ve gathered to give you a better understanding of the misconceptions on government funding:
> Government funding doesn’t exist. Government funding is a lie. Government funding is a scam. There is no government funding, they said no to me. I got denied funding, what a rip off. The government only helps refugees and immigrants. If government funding was available why don’t get give it to me.
Additional misconceptions we’ve heard include:
> Government funding is free money that you never have to pay back. If you get government funding you can use it for whatever you like. I deserves government funding because I pay taxes. Everybody can get government funding.
Government funding doesn’t exist
There are in fact nearly 1,000 different government funding programs available that provide government funding in various forms to small business owners. These funding programs are handed out by the various funding industries across the country. This misconception was most likely born from a person who believed there was funding available for them, and found they didn’t qualify - thus the misconception of no funding exists came to life.
Government funding is a lie
Despite what people may believe, the government agencies are very well regulated and they simply will not lie. The same people who believe government funding is a lie most likely did not apply for funding, did not have any experience and probably heard from somebody else. Before you join in on this misconception, ask yourself - what exactly about government funding is a lie?
Government funding is a scam / I got denied funding, what a rip off
The misconception on government funding is born from the people who have applied for government funding and been denied for a number of factors. Yes there are factors a small business owner must meet in order to become eligible and obtain funding. What if the scam was actually you not meeting the criteria and simply not being eligible?
There is no government funding, they said no to me
When somebody talks about government funding, they think the Canadian government. However the Canadian government is formed of many different levels of government. You have the local, provincial and the federal. There are nearly a thousand different government funding programs. People apply to one program, get denied, and believe that the government said no. But remember, that is just one program out of many.
The government only helps refugees and immigrants
While it is true that there are success stories of government funding being provided to immigrants or refugees, financial support from the government doesn’t always mean small business funding. There are funding agencies that support refugees, some that support students, others support women, some support immigrants. Knowing your way around is critical.
If government funding was available why don’t get give it to me
Even though the government hands out billions of dollars in funding to small business owners across the country it doesn’t mean they will just give it to you. Have you applied? Have you created a business plan and done all necessary requirements to be eligible? Government agencies select the best candidates based on a number of factors.
I deserves government funding because I pay taxes
Government funding has very little to do with your taxes other than being a source of money from which they provide funding. Agencies provide funding to business owners who invest time and effort into businesses that can give back to the economy. Paying taxes alone does not guarantee funding.
Government funding is free money that you never have to pay back / If you get government funding you can use it for whatever you like
If you obtain government funding, you applied to a specific program with specific requirements. The funds must be used for the exact purpose you applied for. In regards to government funding being free money, this depends on the funding type and the actual program itself. Some programs are non repayable government grants, but always read the program materials.
Everybody can get government funding
Before you can apply and obtain government funding in Canada there are certain conditions you have to meet. You must have a registered business license and be a Canadian citizen. Each program has different criteria, but generally having a business plan completed and applying to the correct program at the right time is key.
How Government Funding Works
The Canadian government supports entrepreneurship through various funding programs to ensure a stable and growing economy that creates jobs and supports economic growth.
> As a Canadian citizen you pay your taxes and contribute to the Canadian economy. A percentage of your tax money goes into different funding programs for building small businesses up. These small businesses use the money to create more revenue and help create more jobs. The more jobs that are created as a result of government funding, the more taxes are collected back to the government for additional investment opportunities and future business development and economic growth. It’s the life cycle.
Can You Benefit from Government Funding?
What is Government Funding Available For?
Government funding can generally be used towards the following:
- To cover startup costs
- To help you expand your business
- To help pay for staff
- To help you train employees
- To help you pay for tools and equipment
- To help you pay for leasehold improvements
- To help you for research and development
- To help you pay for marketing and advertising
- To help you improve your cash flow
Types of Government Funding Programs
- Government Grants
- Government Loans
- Tax Breaks and Tax Credits
- Wage Support
- Consulting and Mentorships
Government Grants
Government grants, also known as awards, contributions or funding, are funds provided by the government to help support business activities. Many believe grants are free money that does not have to be paid back.
- Non repayable government grants
- Partially repayable government grants
- Conditionally repayable government grants
- Partial contributions
Government Loans
Government loans are loans provided by the government or through partnerships with financial institutions.
- Low interest government loan
- No interest government loan
- Government guaranteed loan
Tax Breaks or Tax Credits
This type of funding is often realized after the tax year is complete or provided as credits for eligible expenses.