Are you eligible for Small Business Grants?

When starting a small business in Canada, most entrepreneurs start of one of two ways.

With existing money/capital/funding, or little to no money which leads into the need to get  small business grants or funding.

Some would say, “how can you start a small business and have no money to start off with?”, and they aren’t wrong. However as Canadians, our government has helped so many small businesses owners across the country do exactly that. How? With government funding and small business grants/loans.

So, are you eligible for Small Business Grants?

There are many misconceptions around government grants, loans and government funding in general.

Some people think that they are automatically eligible and “deserve” government funding simply for being Canadian. However, because funding is offered by different levels of government and not just the Canadian federal government, those agencies responsible for dispersing the funding to help small business owners grow, need to ensure that only those who can actually help the economy get the funding.

Funding offered by these levels of the Canadian government aren’t scams. They in fact exist, however it’s the same groups of individuals who apply (but don’t meet the criteria), that cause the misconceptions and promote them.

Government funding and small business grants are not any different then bank loans. When you walk into a bank, are you given a loan right away? Or do you, like every other person have to meet some requirements before you can obtain funding?

Small business grants are the exact same. In order to be eligible and successfully apply, you must meet certain conditions. To actually obtain small business grants, many factors are considered.

To be eligible and apply for small business grants in Canada, the factors that are considered include:

• Your location
• Your industry
• Your funding needs
• Your credit history
• The program/agency you apply to
• The time of the year (deadlines)
• Your business plan

Depending on the funding agency or program, different factors and different criteria are looked at in order to be considered a successful candidate and obtain a small business grant or a loan.

Why “my location”?

The location of your business has a big impact towards your chances of obtaining government grants, loans and funding for your small business. Because the government funding doesn’t just come from the federal government, but comes from multiple sources (local, provincial and federal), your location is considered to see who can provide you the funding.

Think of it like this: if you live and operate your business in Ontario, would you apply to a funding program that just offers funding for residents of Alberta? Probably not. This is why your location is an important factor in determining which small business grants and loans are available, and if there actually are any.

Why “my industry”?

Similar to the reason why your location is an important factor, your business industry has a big impact as well. Why? There are funding programs and government funding agencies that fund specific industries. There are agencies that focus strictly on technology, others on manufacturing, others on agriculture…etc So it’s important to look at funding options for your small business within your industry. Keep in mind that your business may fit into multiple industries as well.

Why “my funding needs”?

Knowing what you need funding for, and how much funding you need will help you determine what type of small business grants and loans may be available. Similar to your industry and your location, the funding needs and amount of funding needed has an impact, and is an important factor. There may be programs in your city, for your industry, for your type of business but if you are in need of funding of $100,000, however the only available program has  maximum of $10,000, you are out of luck.

Funding programs are sometimes divided into many different “funding needs”. There could be funding to help you start your small business, to conduct R&D, to pay for employees, to hire and train staff, to pay for advertising, to purchase tools and equipment, for land and property renovations, to improve cash flow..etc

It’s often good advice to break up your funding needs into smaller chunks and cover all aspects of what you need now and what you may need, versus looking at a big lump sum in small business grants.

Why “my credit score?”

Just as when you go to the bank and apply for a credit card, line of credit or a mortgage, your credit score is looked at – it’s not any different when applying for small business grants from the government.

Your credit score tells the potential investors what you as a individual or as a business are like in terms of making payments. It’s a way to judge risk of lending you money.

You may have an excellent idea and a great business plan, but if your credit is very poor and it’s clear that you have bad judgement when it comes to handling money, it may impact your odds at getting funded.

Why the program/agency I apply to?

The different funding programs and funding agencies have different criteria to consider before they can award the grant or loan to a small business. At times, each funding program may have a different list of factors in addition to the above mentioned few. To ensure your highest chances of obtaining funding, it’s recommended to know the agency and the funding program and to abide by the rules/criteria they set out.

Why the time of the year?

Deadlines are important to government funding agencies. These deadlines are set because the specific agency or program has to meet certain requirements on “the back-end”, which may not be important to as individuals, but are economically important. It can happen that you meet all of the requirements and meet all of the factors mentioned above, but apply too early, or tool late or past the deadline to have your application rejected.

When you figure out which funding program to apply to, it’s recommended to give yourself some time to prepare all that you need and to ensure you meet the deadlines.

Why my business plan?

Your business plan is actually one of the most important factors to consider when applying for a small business grant or a loan. Because your business plan will be that important piece of information that government agencies look at to determine to provide you funding or not, it has to be perfect. No business has gone funded and succeeded without having a proper business plan.

Are you eligible for a small business grant?

The short answer is; if you meet the above mentioned criteria you are definitely on your way. However do keep in mind as mentioned that each funding program has a different set of criteria to meet.