Most common questions about government funding that small business owners have

Government funding is a cryptic thing. It’s not easy to access, to understand and most small business owners in Canada, even though they want the funds, they shy away due to the many misconceptions of the funding – and the process.

We at Canada Startups get hundreds of questions per day, from business owners and startups just like you, and some of the common questions are shared with you below to help you better understand and get along with the process.

Is government funding really for me?

There are many different government funding programs. These programs are there in place for the majority of Canadians to benefit from. As long as you are starting a business, or growing your business, and have various business expenses that you want to cover with the support of the Canadian government, you may be eligible for certain programs. You do however have to be a citizen or have permanent residency in Canada to qualify, or at the very least have a business partner who is. 

How much money can I actually get from a government program?

Since there are so many different programs, the funding amounts will vary based on your business and your needs. Some business owners may be satisfied with just a few thousand dollars, while some may need upwards of a million. The funding amounts that you can actually get depend on each program as each program has a maximum and an average that they hand out the small business applicants. To determine how much you can get from a specific program, be sure to look at how much the program has given to previous business owners and applicants in the past.

What is the maximum that I can get?

Most government funding programs have pre-determined maximum limits that an applicant can get. This does not mean that you will be able to get the maximum but it simply means that this is the maximum that anybody from the program will be able to get at one time. It is never a good idea to ask for the maximum, instead break down your funding needs into the very specifics of what you actually need and apply to multiple programs to get the maximum amount of funding that you need.

What do I have to do to be eligible for funding?

To be eligible for government funding a business owner must follow the criteria that each funding program has. These funding programs all have their own unique requirements. To be eligible for funding, the most common factors state that you require a business plan, that you are ready to show your 3 year financials or financial forecasts and that you are applying to the correct program within your location and covering your industry and specific to your funding needs.

Do I have to be in business to get government funding?

To apply for any government funding program you need to be starting a business or expanding an existing business. There are programs to help you start up whether you are already operating or just planning the business. Before you can apply to any program you do have to have a business license, or be a registered business.

Can I get funding for any of my expenses?

There are various government funding programs that cover a number of expenses that a small business may have. These expenses vary from business to business and may be different for all businesses. The most common include the initial operating and start up costs,  renovation costs, marketing costs, wage support and hiring, equipment purchase, supplies and inventory and such. Majority of small business expenses can be turned to government funding for the support, however certain expenses may be denied. It is always a good idea to contact the government funding agency in question and determine what they provide funding for specifically.

I already got funny once. Can I get more funding?

If you have applied to a funding program in the past and have been successful there is nothing stopping you from applying again to the same program or other programs. If you have applied to multiple programs and have been denied, it is recommended to avoid applying again for at least 3 months unless the application was refused and re-application was asked for.

How long does it take to get accepted for a funding program?

After you have already applied to a government funding program, it can take an average of 2 to 6 weeks to hear back from the agency regarding your acceptance. This also depends on a number of factors, including which program you have applied to, the specific deadline that the program has, the funding amount that you have applied for and simply, time of year. 

How long does it take to see the money?

Once you have been approved the funds by a government funding agency and you have received your confirmation letter or call, to receive the funds in your bank account it can take anywhere from 24 hours to a few weeks. The time frame really depends on the funding program directly and their accounting practices. In some cases you may be experiencing delays, especially if the funding amount that you have applied for and have been accepted is a larger one.

What if I can’t pay back the money?

If you have been granted money from a government funding program that you have been using for your business but are unable to pay it back, much like any loan or funding borrowed, the agency in question may create a repayment plan. It is very rare that a funding agency will dismiss the money borrowed, so there will definitely be a repayment plan repayment plan set up to assist you in paying back the needed funds.

What are the interest rates of government funding?

The government funding loans that are being offered are plentiful. There are different types of government loans, some which have no interest attached, some are conditionally based, and some with low interest. The interest rates, if they are applied, will depend on your specific business situation and your specific funding needs. While there is no set interest rate, the government loan rates are often far less than those of traditional bank loans.

I only want to Grant, is that possible?

As a small business applying for government funding you have every right to be specific as to what you want. That means applying only to government grants and avoiding any government loans or tax breaks or credits that is completely fine enough to you. Do keep in mind that obtaining a grant is much more difficult than obtaining a loan. The process to apply for and to be eligible for a grant has stricter rules so if you’re in need of money quickly, a government loan is far better for you.

I got the denied funding now what?

If he applied to a government finding program and was denied, don’t worry it’s not over yet. Government programs and their application processes are very strict. Denial doesn’t always mean it’s over. Instead, learn from the application and see why you were denied so that way you can improve and reapply to the program again. Often, the most common reasons why a government funding program is denied is due to simply application mistakes. It is always a good idea to get expert help when applying to a government.

Do I need to have a business plan?

A business plan is one of the requirements for the majority of Canadian government funding. Having a proper business plan will outline your business model, your potential, the financial, as well tell the government agency what you need money for. Applying without a business plan you will most likely be denied. 

Can I apply to all government funding programs at once?

While you can apply to multiple government funding programs, it is only a good idea to apply to those that you meet the eligibility or requirements for. Applying to multiple government funding programs at the same time may be difficult since all government funding program applications are different and specific to that individual program. If you are applying to multiple loans keep in mind that each program may do a credit check which may impact your credit score. Again only apply to those programs that you feel like you may be a match for.

Can somebody else apply for me?

Getting help from an expert to apply for a funding program is always a good idea. If you are in need of money you want to make sure that everything that you do results in a successful application. So if you’re not sure how to do an application on your own, an expert can be hired to help you. Keep in mind it is OK to pay for an expert to help you, however it is not okay and not acceptable if an expert is willing to help you for a percentage of the money that you’re trying to obtain. This often results in denial of application if done by a 3rd party, or if you are approved it could result in the money having to be paid back.

These are some of the most common questions business owners have about government funding. If your questions were not answered, ask away – our experts are available to help and guide you through the process.