Government Funding for Small Businesses in Canada
According to Industry Canada, there were more than 1 million businesses in Canada with fewer than 50 employees, as of June 2009; small businesses are a huge part of the Canadian economy. While recent economic fluctuations have caused the federal government to tighten its "spending belt" in many areas, its 2010 "Economic Action Plan" supports spending to benefit Canadian businesses of all sizes. More than 400 grant and loan programs are listed on the federal government's "Canada Business" website in 2010, and many of these are available to small businesses.
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Funding Sources
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Federal agencies and provincial governments offer funding to small businesses in Canada. At the federal level, the Business Development Bank of Canada, Agriculture and Agri-Foods Canada, Industry Canada, Indian and Northern Affairs Canada, the Canada Revenue Agency, Natural Resources Canada, the Canadian Heritage Department and the Canadian Youth Business Foundation are leading sources of funds for small business. Provincial government funding sources are diverse and particular to the province. In Ontario, the Ministry of Revenue and the Ministry of Economic Development and Trade offer many funding opportunities to Ontario businesses, including small businesses.
Types of Funding
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Funding offered to small businesses can take the form of grants or loans. Grants are funds that you don't have to repay, while loans are funds that you borrow and must repay. Loans are interest bearing; however, interest rates on government small business loans are usually less than commercial rates. Government business funding programs are designed to support small business owners in a variety of ways; different programs are designed to provide capital to purchase large equipment and/or expensive technologies, finance exploratory research and facilitate international expansion.
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Eligibility
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Some small business funding programs target younger entrepreneurs, and others are open to Canadians of all ages. You may have to be a student to qualify for a summer business grant. Occasionally sources of funding target ethnic minorities or historically disadvantaged groups such as indigenous Canadians. Woman may also be singled out for business funding opportunities. You may be required to invest a certain amount of your own money in your business to be eligible for government funds. Government-issued identification, academic transcripts and bank statements may be requested to prove your eligibility.
Application Process
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Application processes vary depending on the amount and type of funding available and the agency providing it. Funding applications for start-ups usually ask for a business plan, and you may have to submit bank information. If you are a new business applying for a government grant you may be interviewed. Grants and loan applications for established small businesses can ask for trade references, detailed project proposals and the companies' financial statements. In most cases application processes can be started online and there will be a program website with contact information so applicants can request additional information.
Tips
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Read the qualifications and eligibility sections of the application closely to ensure that you don't waste time preparing an application that won't be considered. Research the mandate and mission of the agency providing the funding and relate its cause to your business or project goals in your proposal. Use similar language to that used by the organization offering the funding; repeat the exact words and phrases of the qualifications and eligibility requirements listed on the funding poster when you are writing your application.
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References
- Photo Credit business plan 2 image by Kelly Young from Fotolia.com
