Understanding Government Grants
Understanding government grants will give you an advantage when applying.
Canadian government funding programs are available to help small business owners such as you obtain funding to start up or expand their business. Government funding is handed out in various forms by various funding agencies and may support your business with amounts from $1,000 to well over $10 million depending on the programs you qualify for.
The sources that offer the funding pay out in the form of government grants, low interest or no interest loans, tax credits and rebates, and incentive contributions.
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The Canadian government has been handing out business funding grants for a very long time. What it seems is that most Canadian entrepreneurs are very confused about government funding and have misconceptions when it comes to understanding what government funding really is, what it can do for you as a small business owner, and where to get it. It is time to help you understand.
What Exactly Are Government Grants?
Government grants offered by the Canadian government and its various agencies are a form of financial assistance provided to small business owners to support entrepreneurship and build a stronger economy. The funding that the government hands out comes from tax money collected over the years. Instead of keeping it, the government distributes it to deserving business owners to help grow the economy through job creation.
Even though government grants are available, they are not available to everybody. Each funding agency has different programs that serve different purposes and have their own qualifying criteria that must be met before funding can be approved. One of the major benefits of receiving a government grant is that, in many cases, the approved small business does not need to pay it back. It is essentially funding that must be used toward your business.
What Is a Government Backed Grant?
A government grant is entirely government funded and controlled by a funding agency. A government backed grant, however, is slightly different. It is often the next best thing to a government grant, but the government itself has little direct involvement.
Government backed grants are commonly given out by charitable organizations for various purposes. These organizations determine how the funding must be allocated and how it must be used by the small business owner.
Is a government grant the best type of funding? Possibly, but it depends on your situation and perspective. Government grants are appealing because they do not need to be repaid. However, the strict criteria and qualifying requirements often make them harder to obtain than government backed grants, loans, and other forms of financial assistance.
Can I Get Free Money?
Money is not free. The government does provide funding grants that may appear to be free money to business owners, but in reality they are not entirely free. While the money itself does not need to be paid back, there are rules and restrictions set by the funding agency on how the money can be used.
If a business does not follow these rules and restrictions, the business owner may be required to repay the used portion of the funding and return any unused funds due to a breach of contract.
Even though government grants do not need to be paid back, it does not mean the funds can be spent without limits. For example, the money cannot be used for personal luxury purchases.
Where Can I Apply for Government Grants?
This is one of the most frequently asked questions. Applying for grants is where many business owners become stuck and eventually give up. The information needed to obtain funding is constantly changing.
Funding agencies regularly update rules, regulations, requirements, criteria, program deadlines, and application methods. Staying informed about the latest information for specific funding programs is essential to successfully obtaining funding.
It is recommended to stay in contact with funding agencies that offer the grants you are interested in and to regularly check for updates to requirements or program details. This is the best way to get the most current information.
However, this process can be very time consuming, and many small business owners prefer not to manage it themselves.
There are privately held organizations that provide this information through databases, newsletters, and alert services.
Connecting with these organizations can help you stay up to date with available funding programs and any changes to deadlines or requirements.