What’s it like to apply for government funding in Canada

The Canadian government has over 1,500 funding programs that help small business owners and entrepreneurs. These funding programs offer billions of dollars per year collectively to help create jobs, boost the economy and support entrepreneurship.

With the funding, small businesses, no matter if they are just starting out, or expanding, can use the funds to cover the various costs a business may have; in order to grow!

The process of applying for government funding in Canada however is a bit unclear. Even though there are over 1,500 funding options across the country, most people often hear about the top 5 to 10 options – the ones that are often the biggest, the most promoted – and sadly, the ones toughest to get into.

These 5 to 10 options are often the programs that cause a misunderstanding or confusion for the rest of the 1,500 options available – making the process to apply for government funding an unknown one to the general public.

So, today, we will explain what it is like to apply for government funding in Canada.

Government funding types

While there are over 1,500 funding options available via the government; these programs often fit into a few different government funding types.

The types of funding include:

• Government grants
• Government loans
• Tax breaks/credits

With the government grants; these programs are often free money options that are given to a business owner to help with their business. Usually the grants are harder to get into options, due to the ability to not have to repay the funds back. These options often focus on the specific needs a business has that can help not just the business, but the community as a whole.

The government loans; much like traditional bank loans, these are funding programs that give a business owner the needed money to do with as they wish, to benefit their business; while being on the hook for a repayment. The loan repayment via government can often be conditionally, or even have low interest rates to no interest rates. Really beneficial as you startup or try to expand your business.

The tax breaks and credits; much like the tax refunds you get when filing personal taxes, are often also “free money” options like the government grants. These programs cover your costs and can give you a credit at the end of the year. The downside; you have to have spent the money beforehand in order to qualify.

What the funds can be used for

The government funding programs all have a purpose. They are all created by the various local, provincial or federal government agencies to help within a specific industry or need. 

In most cases, each funding program focuses on a single purpose. Your role as the business owner is to be able to know what you need the funds for, in order to break down your specific needs and to find these relevant programs to apply to.

There are many different user that a business owner may focus the funds towards, including;

• Business startup costs, or acquisition costs
• Research and development costs
• Hiring, wage support and training costs
• Tools and equipment purchase
• Supplies and inventory purchase
• Marketing and branding costs
• Web development costs
• Leasehold improvements and renovation costs
• And more…

Not everyone is eligible for each type of funding, so it is best to review your specific needs and only apply to those options that you are fit for – and that you actually need the money for.

What you need to apply

To apply for funding, certain things are needed.

First of all, you must be a Canadian citizen, or have permanent resident status – or at the very least have a partner who is.

Once the basics are covered, to apply successfully you must have a completed business plan; a clear and easy to understand breakdown of your funding needs (what you need funding for); usually a 3 year projected financial statement explaining your financial situation – and you must know which program to apply to.

The last thing you want to do is apply without a business plan; or to the wrong program – as it will get you denied.

Remember, the business plan is and should always be your first step. To get a business plan started, you can use the business plan builder tool.

The process

What is the process of applying to government funding like?

Well, since there are so many different programs, each program is a bit unique. In addition to that, each applicant to government funding may have a different experience.

The basics however are usually the same. Before you begin the application process, you want to ensure you covered the basic steps.

• Do you have your business plan ready?
• Does your business plan explain your funding requirements? (what you need funds for)
• Do you know how much you need? (best to explain per requirement)
• Do you have your financial statements or financial projections ready (3 years)
• Do you know which funding program to apply to?
• Does the program you want to apply to cover the specific needs you have?
  • If yes, is it available in your location; or your industry?
• Did you read the funding applications in full?

It is recommended to follow the steps/checklist in full detail. Missing one or multiple from the list could result in a denial of your application.

Assuming you have already found a funding program you want to apply to, you are ready to move ahead with the application process. If not; you can always use the Funding Database to locate any of the government funding options – to help you narrow down your choices.

Once you start the process of your application; they may take from a few minutes to a few days. However, once the applications are submitted, the average time it takes for the agency to respond back to you is between 2 to 6 weeks.

During this time, the agency is reviewing your work (as explained above); and also are looking at other applicants at the same time. 

If you hear back – it is either to be asked more questions, or that you have been accepted.

If you however get a letter back, email back – denying you funding – or if you don’t hear back within that time frame, chances are, you have been denied the funds.