My Experience Applying For Government Funding For My Business

The below is a transcript taken from one of our recent conversations with one of our members who was successful at obtaining government funding. He decided to share his story with us, from start to finish in order to help others in need of funding and advice. Please read on…

As per Kevin Nugen from Pickering, Ontario:

What made you decide to apply for funding?

Every entrepreneur starting a small business goes though the “I need funding” stage. The fact that most small businesses fail due to a lack of funding or improper management of funds, I knew I needed to do something different in order to ensure I apply for government funding and hopefully get funded. I think that’s one of the main reasons why I initially started looking at funding options. And obviously because I knew I needed money.

When did you know you needed funding?

I knew that I would need government support from day one. Starting out, I had a little under $75,000 in personal savings which I was going to use for my equipment, but that means I would be at zero for hiring, training, rent, paying my wage..etc So I think that’s where I started looking at my business plan and figured out how much more I would need. The next step was finding out where to get it.

What was your first step when searching for funding?

I knew some people that got funding from various places in the government. I knew that not all funding came from one program, so my first thing was to search online. After about a week of trying myself, and filling out pages and pages on my own notes…I still didn’t get far. I did contact multiple third party places that offered “all funding programs” in one place. So I called.

Who did you contact?

I contacted over ten different sources, or places of information. I contacted the Funding Portal, Business Grants Center, Centre for Small Business Financing, Mentor Works, BDC and you guys (CanadaStartups). 

What made you go with CanadaStartups?

It was a process of elimination, cost and quality. I contacted BDC first and they told me I needed a business plan. I didn’t have one at that time, so they were out asap. I spoke with you guys next and realized you had the tools I needed, especially the Business Plan Builder and the Funding Database. And really it seemed you guys answered all of my questions. While the Funding Portal didn’t seem they knew what they were talking about, Centre for Small Business Financing seemed right, but too expensive, and the Business Grants Center was just a bunch of rude people.

After joining, how did you find the funding programs?

I used the search tool you guys had and I was able to narrow down the search to a few programs. I used the business plan tool as well and was able to complete that. I worked with a few consultants as well outside and they helped me fill out the applications. It was a pretty simple process actually.

What were the requirements of your funding applications?

I did four different applications, and each one was different. I would say that the common occurring requirement seemed to be to have to provide a business plan, fill out a “cover letter” type of document about my business model and myself. I also had to provide a lot of documentation about my personal finances. Not sure if this was due to my bad credit and they needed extra reassurance or not.

When you sent in the application, what was the next step?

One of the consultants I worked with told me to reach out to the funding agency where I sent the applications to every week. So I sent a few emails, made a few phone calls and half the time nobody answered, but when somebody did, I felt extra sure I would get funding. I guess knowing that somebody there on the other side says “we got your application” means a lot.

How long did you have to wait for a response?

I only received two responses out of the programs I applied to. Speaking with a few people, that seems to be a great percentage. But form the moment I sent my applications in, it took a week and a half for one, and almost four weeks for the other. However the first response was a phone call asking me for more information, while the second program advisor called me to come in to their office.

What happened next?

For the first program, 90% of it was handled through e-mail. So after dealing back and forth, I get a letter in the mail a few weeks later telling me that I was approved. As for the other program, I had to go in and talk to a few people. Pretty much do my application verbally and present my business plan. After answering a hundred questions about my business, I was asked to stay and sign paperwork. That was that.

When did you get the funding?

For the first program that approved me, I got the money deposited right into my business account in 32 days from application time. While the other program, gave me 50% of the funds 6 months after my application was sent in, and 3 months after my application was approved. The other 50% would be given to me in chunks through out  the year.

How much funding did you get?

I was successful at receiving a $17,500 government grant. It was a non repayable grant, and a $148,000 government guaranteed loan. The grant would be given in portions throughout the year.

What was the money for?

I needed the funding to hire staff and to train them. That’s what the grant was for, to be able to hire staff and train for a period of 3 months (almost like a subsidy). As for the loan, it was to be used for renovations of our newly leased location.

If it wasn’t for funding, what would your next step be?

If we didn’t get government funding, our next step was a private investor. However the investor wanted 25% equity of the company, which we really wanted to keep. But we did keep it as an option if the government funding didn’t pan out. Another reason why we decided to apply for funding so early on in our startup stage.

What would you say was the most critical to your funding success?

Having the right information where to apply to. I could have spent a lot of time researching, but finding you guys really helped me get there faster. And of course having a business plan. That is a must.

Any advice for others looking to get funded?

If you are starting a business be sure to know how much money you need. Funding is like winning the lottery. If you get it, great. If you don’t, keep on moving and have another “survival plan”. Be sure to give yourself a lot of time from applying to getting funded. If you realize you need money, it’s probably too later (unless you realized early on). Have a business plan. Know where to apply. Know how much you need and keep going at it.