Small Business Grants and Funding in Canada
As a small business in Canada, a lot of opportunities are given to you to support entrepreneurship. One of these opportunities that the Canadian government offers is government funding in the form of small business grants and loans. But what are small business grants and loans? Who are they for? How do you get them?
These are the typical questions that a small business owner may have when talking about starting a small business, expanding one, or searching for funding. So let’s take a few minutes to answer these questions together.
What are small business grants?
Small business grants are programs offered through the various levels of the Canadian government to small business owners. These funding programs are provided to help stimulate the economy, create jobs, and support entrepreneurship across Canada.
GROW YOUR BUSINESS WITH GRANTS & LOANS
Learn about the funding available for your small business. It just takes a second!
Small business grants often come in various forms and are often considered to be “free money” that a business owner or entrepreneur can apply for. However, this is one of the general misconceptions about government grants that most people have.
Government grants for small business owners come in many forms, and while some can be non-repayable funding options, there are different types of grant programs.
What are the different types of small business grants?
Government grants can be a great way for a small business to start up or for an existing business to advance and grow. The different types of government grants that a small business may apply for include:
Non-Repayable Government Grants
A non-repayable government grant is one of the most preferred types of funding that a small business owner would want to obtain. Why? Because it is non-repayable. Meaning that once you obtain funding of this nature, the money received does not need to be paid back.
Partial Contribution Grants
Partial contributions are also government grants. However, in many cases, the government agency that provides this small business funding will require the business owner to contribute either a percentage or to match the funds. For example, the government may give a business owner $25,000 towards certain business expenses if they invest 20% of their own funds towards the same. These grants are also non-repayable, but they may require a percentage contribution from the owner.
Conditionally Repayable Grants
Conditionally repayable grants are still considered grants, but they do come with conditions. When you apply for a conditionally repayable grant, you are applying for funding that is similar to a loan (however, with no interest) and is only repayable based on a condition such as when you start becoming profitable or being repayable in your third year of business.
When it comes to these types of small business grant programs, each program or agency that provides this funding has its own conditions.
Subsidies
Small business subsidies are often grant-style programs that provide funding towards hiring or training employees. There are certain programs that allow you to hire employees where the government wage subsidy provides non-repayable funding or a contribution towards employee wages.
While these four are the top grant programs, there are often programs that may not have the title of “grants” but often act as a grant. For example, tax breaks or tax credits are often similar to grants and represent money that you do not have to pay back, except that it is based on your spending.
Who are small business grants for?
Small business grants offered by the government are designed to support small business success and entrepreneurship. Each funding program and each funding agency has its preferred applicant, which can usually be determined by reviewing the program criteria.
Certain things to keep in mind when trying to determine if funding programs or small business grants are available for your business include:
- Knowing if the programs are available in your location
- Knowing if the programs are available for your industry
- Knowing if the programs are available for your specific funding needs
- Knowing if you meet the eligibility and qualification requirements set by the program
Small business grant programs are mainly focused on helping companies start up, hire, and train staff, and are less likely to cover purchasing a business, advertising costs, or equipment costs.
How do you get small business grants?
To get a government grant or funding for your small business, it involves searching for programs, making sure that you meet the criteria, developing your business plan, and completing the funding applications.
While it sounds easy, it can be a difficult task, with the toughest part being the search for funding.
Since the Canadian government has hundreds, nearly thousands, of different funding programs scattered across various agencies in Canada, finding the one you may be eligible for can be challenging.
Many small business owners turn to the Funding Database to locate funding instead of spending weeks researching and digging for programs.