6 Reasons You Didn’t Get Government Funding

Hearing “not approved” when applying for government funding can be a breaking point for any business owner. Especially if that capital would have been used to help you start our small business, to expand your existing business, or to fund the very needed expenses you have.

In many cases, as a small business, the number one reason you are applying for government funding support is that you need it. It may or may not be the only chance you have, but hearing that no can leave you in a rut.

No matter if you heard the “not approved” for government funding, it’s important to lift your head high and move forward.

The key to moving forward is to understand why you didn’t get approved in the first place.

Remember, it’s not enough just to accept the fact you were denied government funding – instead, be persistent and find out why.

The”why”, may be the main point you have to change in your application to succeed next time around.

6 Reasons You Didn’t Get Government Funding

The reasons why you may be denied government funding can vary from business to business, from program to program but the most common are often simple mistakes that can be avoided if better understood.

It is important to remember that every single government funding agency (and there are hundreds of them), has its own requirements and criteria that you as a small business owner must meet, in order to be eligible – otherwise, you risk being denied the government funding.

The top 6 reasons you may be denied government funding include:

1. Applying for government funding without a business plan (a full, completed business plan)
2. Not explaining your funding requirements
3. Asking for way too much money (over what is available to fund)
4. Applying to the wrong funding program
5. Sending in your applications past the deadline
6. Your application was not done correctly

Remember, that the above 6 reasons are the common ones across the board, however, they are not the only ones.

Be sure to speak to a funding expert to ensure your applications for government funding are not denied.

Reason #1: Denied Government Funding – due to lack of a business plan

A business plan is a blueprint for your small business.

Without a business plan, nobody can understand your business model, your goals, needs, and what you wish to accomplish.

A properly developed business plan will be the first step to making sure that any government funding is obtained.

Simply put, if you don’t have a business plan, don’t apply for funding.

Government agencies use business plans to determine the viability of your business model, to better understand your funding needs, and to determine the potential you have.

There are many different types of business plans; long, short, visually appealing..etc – some work, some don’t – so speak to an expert before you decide on what you think a professional plan really is.

Using the Business Plan Builder Tool here can help you create a plan that is up to par with what the various government funding expect, to ensure you don’t hear that denial tone.

Without a business plan, a funding agency can only base your eligibility on the application you submit – however, in most cases, the first step of the application process is to share your plan – this can automatically be the reason for your government funding application being denied.

Reason #2: Denied for not explaining your funding needs?

Another huge reason why your government funding application may have been denied – not being clear enough as to what you need funding for.

Remember that funding agencies are created to help the economy or the community you are in. They are always powered by a purpose – the purpose often being whatever they decide to fund.

This can mean a program can be made to fund the development of a small community, so anything “business-related” to boost the community, may possibly be applicable to apply for funding.

Your business plan and funding applications should be clear when you apply – show how you will benefit the community.

When seeking funding, the goal is to break down your funding needs as much as possible. Multiple reasons, but the main one being to be able to benefit from multiple funding programs that fund just those specific needs.

As a small business, funding everything may be the goal – but unlikely to happen, so breaking those needs up will be beneficial to you.

A reason for denial may be due to not separating your expenses and just commenting “need funding for startup”, or “need money to grow” – this makes the funding needs unclear, and often can result in a denial.

Not many funding agencies will reach out to ask you to correct it; as there are dozens if not hundreds of applications coming in, time is limited.

If you would like to determine how to break down your funding needs better, to avoid getting denied government funding, working with a Canada Startups expert may be the best choice.

Reason #3: Denied for asking too much money!

Never a good reason to be denied as it means you are not getting the funds you need. But, asking for too much money from a government agency should not be happening.

Often, this denial reason happens when you don’t break down your funding needs and ask for a lump sum, or something unrealistic.

It is always a good idea to know the program you are applying to. What is the maximum they fund?

If they have success stories of previous funding successes, what was the average?

Do a bit of research and determine this to evaluate your chances.

If the program states that the total they have available should not exceed $250k (as an example); you should stay below that figure.

If the average they fund is $100k, but the maximum is $250k, it is a good idea to stay closer to the 100k range – as this seems to have worked better.

Remember, breaking down your funding needs into smaller amounts and applying to multiple programs always works better and can limit the number of denials.

Reason #4: Denied for applying to the wrong program?

It happens far too often – a funding program looks so good that you can’t resist – but, is it the right program?

One of the main denial reasons is applying to the wrong program – it may not be available for your location, for your type of industry, or many not cover the needs you have – or else.

But if you apply, knowing that it’s not for you – you will get denied the funding quickly.

In some cases, you may not even know you are denied – the agencies will not take their time to respond.

To avoid being denied government funding, be sure to read the terms of each program, and understand what is being asked as the application criteria.

Reason #5: Applying past the deadline

One denial reason that seems to get a lot of small business owners is applying to a funding program past the deadline.

Since most agencies don’t promote their funding programs, knowing when there is a deadline, can sometimes be a bit unclear.

If you do see one, and you are a day or two away from it, or past it – no need to apply as it will likely be denied.

To apply on time – usually give yourself a week or two at minimum, to ensure it gets delivered on time (even if applying via web).

Don’t be first to apply, but don’t be last to apply – most applications will be looked at randomly.

To ensure you don’t miss any funding program deadlines, and risk your government funding applications from being denied, consider using the Funding Database and stay up to date.

Bonus #6: Applications are not done correctly

Applying for funding is stressful – the applications are confusing, often long, and hard to understand with all the government terminology.

This leads us to the bonus reason why so many business owners get denied government funding due to incorrectly completed funding applications.

Did you write it in where it asked to be typed?

Use a blue pen when you needed to use black?

Did it ask for something you weren’t sure about and left blank?

Perhaps you forgot got attach something?

Or maybe you didn’t date and sign?

All these, and more, can be reasons for getting your application denied.

Working with an expert on your application can have a great outcome – be sure to reach out to a Canada Startups expert to get help with your applications.