Are you one of those Canadians who thinks that the government should give you money to start your small business just because you’re Canadian, just because you pay your taxes. Maybe you feel like you deserve funding? Well join the thousands of others who feel the same way but never, ever do anything about it. Getting government funding for your startup or existing business isn’t easy, it’s possible and likely but it’s not just a form to fill out and done, you’re funded! If you are looking to get funding for your small business and you’re willing to do something about it, this guide to getting government funding is the perfect read for you.

Now if you’re an entrepreneur or somebody that has an entrepreneurial mind, you may be asking yourself; “why do I need a guide to tell me about getting government funding, can’t I just go to the government and apply?”.

Sure you can. Here is the government website.

Once you’ve had a chance to look through the government website and the wealth of information, hopefully you know how to make sense of it all and apply to get funding.

If however you need a bit of help getting your business started, getting your business plan done and getting help searching for government funding programs, the guide to getting government funding should be a good read.

What is government funding?

Before you start your search for government funding and before you apply for the funds, it’s important to know what government funding is and why it’s offered by the government.

The government takes money (from taxes) and uses it to provide it to small business owners across the country in order to support entrepreneurship, to improve the economy by creating jobs and building a better country to live in for all Canadians. It’s simple really, the government takes a small percentage from everybody, gives a certain amount of money to certain people starting or expanding s business in order to help them achieve success. When they achieve success, they hire locally (creating jobs), they sell locally and stimulate the economy and as they make more money, the amount they pay in taxes increases and the government gets that back in order to repeat the cycle again.

Sure you can be pissed off at that, but that’s the way the government works and the reason why Canada is a great place to live in and to build a business.

Who is government funding for?

A typical question that we here at CanadaStartups.org get asked very often is “is there funding for me”, “who is government funding for”, “can my business get funding”?

Government funding is given to those who are Canadian residents, who show potential, meet the criteria set by the various funding programs and agencies .

While not all are eligible, the potential to obtain funding is very clear. If you meet the criteria and qualifications set by the agencies who provide the funding, it is just a matter of time.

Typical criteria to obtain government funding

• Be a Canadian resident
• Have a business plan
• Your credit score (not all agencies look at this)
• Meet the program deadlines
• Apply to the correct programs

What can government funding be used for?

When applying for government funding, one of the first steps is to ensure you have a well developed business plan. If you have a business plan, the plan should actually tell you what you need funding for. That’s exactly what the business plan is for – to prepare you for business.

Government funding is available for many purposes that business owners can have, such as:

• Starting costs/expansion costs
• Hiring and training costs
• Purchase of tools, equipment, supplies and inventory
• Research and development costs
• Improving cash flow
• Costs of import/export
• Marketing and advertising
• Purchase of business and land
• Leasehold improvements..etc

Here is a great article on 7 things you can get government funding for.

The government is very strict in terms of what you can use the funding for. This is because certain funding agencies create funding programs based on specific funding needs and only provide funding for that. If funds are incorrectly used; you may be required to pay it all back immediately – or the funds may be taken away and a fee may be charged (depending on programs).

What this means for you is that if you’re applying for funding to help you purchase tools and equipment for your business – don’t confuse the funds as your own, instead use them only for tools and equipment. Since you will have to provide documentation on your spending, this will be clear.

Getting Government Funding Tip:

When applying for funding for whatever your needs are, make sure that within your business play your funding needs are broken down. If you need let’s say $100,000 in total funding, don’t ask for $100,000 but break it down the the above mentioned categories of funding needs, so that you have an option of applying to multiple programs and not just one. The more you break it down the better. The same goes for when searching for funding – don’t search for “$100,000 to startup” instead search for “$10,000 to help you pay for marketing”, “$25,000 to help you purchase equipment”..etc

The Types of Government Funding

Government funding comes in many different forms.

Most people when they hear the word “government funding” immediately think “grant”, and stick to grants as the only, the best and the most desired option.

Since there are multiple types of government funding programs, you as a small business owner may be left a bit confused, so it’s important to be educated on each of the program types before you jump in and start to apply and yell “I NEED A GRANT”.

The most common government funding types include:

• Government Grants
  • Repayable Government Grants
  • Non Repayable Government Grants
  • Partial Contributions
  • Conditionally Repayable
  • Wage Subsidies (sort of like grants)
• Low Interest or No Interest Loans
• Guaranteed Government Loans
• Tax Breaks and Tax Credits
• Non monetary funding programs

Now this is where most people stop and just give up. What is good to apply to? Which option is for you? Is one better then others?

To briefly explain:

Government Grants are always the best.

Why?

Well it’s simple. Most of the time, government grants are “free money” that is given to a business for a specific funding need; and that’s it. No need to worry about paying it back.

But there are government grants as you can see that are repayable. There are grants that are partial contributions which means that it’s still free money but you have to come up with a percentage on your own in order for the government to match it. And there are conditionally repayable grants. The conditionally repayable ones are a bit tricky, why are they grants if you have to pay them back? Well, they have conditions such as “don’t pay back until you’re profitable” or similar. Which is again free money until you achieve success. Better then a loan that you have to pay back right away with interest, isnt’t it?

When talking about loans; the government has different loan programs, actually more loan programs then grant programs – there are low interest loans, no interest loans and government guaranteed loans. All great options when starting up and need help and when the banks don’t go your way. But before you apply to any loan, be sure it’s what you need.

Tax breaks and tax credits are also excellent, but many startups fail to use them simply because it first requires that you spend money in order to “save” or “get money back”; but they are an excellent way to get funding.

The other government programs offered via many agencies aren’t always “money programs”, but they offer consulting, assistance, guidance and workshops – which is great for first time business person to take advantage.

Best Type of Government Funding To Apply To

When starting your business or expanding your small business in Canada, funding is needed.  But with so many different government funding options, what is the best type of program to apply to?

Is it a government grant, loan program tax break  or what exactly?

The simple answer is to build your business plan, see what you need funding for and work it backwards.

Even though there are hundreds of funding programs available across the country, not all programs will be right for you.

Certain government funding programs are made for only some locations, some are for specific industries and some only funding specific funding requirements.

So when you look at the nearly 1,000 funding programs available from the government of Canada for entrepreneurs to take advantage of and when you apply the filters, you may be left with a few programs which you may be eligible for.

What exact is the best option?

A grant is typically the best option if you’re eligible. However since there are far less grant programs, if you’re in need of money you should not be picky and apply to the ones that you’re eligible for be it a grant, a loan, tax break..etc

The best funding option is the one you can get to ensure your business success.

Apply For Government Funding For Your Small Business

This is a Go-Getter’s Guide To Getting Government Funding, which means you’re the go-getter and if you don’t take action, you haven’t done much.

So before you can start applying for funding, be sure to have a business plan ready. If you need help getting a plan done, our Business Plan Builder Tool is an excellent step by step way to create the perfect startup business plan.

Once your business plan is done, our experts can help you review the plan, provide you actionable feedback to make it better and start the funding search using our Funding Database.

Take action now if you want to start your small business in Canada and get government funding.