When it comes to starting or growing your small business, having the proper funding can make all the difference. Thankfully, there are many ways for businesses to access the funds they need through several different types of financial assistance. Most fall within one of three main categories: grants & subsidies, tax credits, and loans. Let’s explore all three.
Grants & Subsidies
Often non-repayable (aka: “Free Money!”), grants are the most desirable form of funding. Nothing is totally free, however, as application process that can take a considerable amount of time and effort to request the funding. They can also be competitive with only a limited number of applicants accepted into the program, so the money is not guaranteed. They often cover a percentage of the costs of your project, with the odd grant covering 100% of your plan.
Grants can be designated for certain industries like agriculture, manufacturing or tourism but can also be available to help you with a specific business issue like hiring, IT integration, or reducing your carbon footprint. Grants are usually meant to cover up-front costs for the business before any expenses are incurred and need to be approved before you actually spend money.
Tax Credits
Businesses can benefit from certain credits to reduce income tax they owe to the government. A tax credit filed with the company’s tax return at the end of their fiscal year, after the expense has been incurred and the work completed. If your business is pre-commercialization or has limited revenue in it’s first year of operation, credits aren’t as helpful as grants and subsidies as they can’t offset taxes you don’t owe.
Some tax credits, however, can be refundable (you get money back if it’s more than the amount paid in the year). Others are non-refundable (you don’t get excess back) or an investment tax credit (which encourages investments in a certain region). Samples of tax credits include hiring new employees, buying equipment, or writing off the interest for loans.
Loans
If you’re looking for a large sum of money to start or grow your business, often loans are the only option. As a new business, however, securing a traditional loan from a bank can be difficult. Some government programs provide business owners with more agreeable terms (such as a lower interest rate or delayed payment) but can also help you get approved for a loan for which you wouldn’t normally qualify.
Who provides business grants?
There are several sources of grants available to small businesses in Canada, including:
It’s important to note that the eligibility criteria, application process, and availability of grants can vary depending on the type of grant and the organization offering it. Small business owners should do their research and carefully review the requirements before applying for any grants.
What type of grants & subsidies are available?
Although there are many different types of grants and subsidies available for small businesses in Canada, there are several industries or activities that have special funding options.
Agriculture Grants
Some examples of grants for farmers and those in the agriculture industry can include improving health and safety, building capacity and even exporting your products abroad.
Tourism Grants
If you represent an event or are a business attracting people to your region, there are many grants to help you in expanding and marketing yourself.
Hiring Grants
To help recent graduates enter the workforce, several grants are available to businesses to hire and train youth regardless of your industry.
Women Entrepreneurs
There are several grants only available to female-led businesses to encourage women to become entrepreneurs.
2SLGBTQ+ Grants
Certain grants are specifically available for socially marginalized or minority owned businesses.
Technology Grants
Adopting new technology can often be complicated and costly. Many grants are available to hire advisors or implement new tech to help your business grow.
Where can I find more details about these grants?
There are several great websites that list available grants for your business.
Innovation, Science and Economic Development Canada
The Government of Canada provides a “Business Benefits Finder” that helps small business owners sort through all the grants available to them. Select certain criteria about your business and what you’re looking for and the website will show you what grants and subsidies you are eligible for.
Mentor Works
Similar to the Business Benefit Finder, Mentor Works provides a long list of federal and provincial grants available. Mentor Works can also help you with the grant application process for an additional fee.
Pocketed
Similar to Mentor Works, Pocketed lists grants and can help businesses owners apply. Pocketed is great at letting you know when new grants become available so you never miss out on money that’s available to you.
FundsNet
FundsNet is an international service that lists grants available around the world. Unlike ISED, Pocketed or Mentor Works, FundsNet focuses on private grants that are available to small businesses which can often be difficult to find online.
Are there grants that I should look at first?
Diving into the world of grants can seems overwhelming at first. But here’s a few grants that can get you access to the funding you need regardless of your industry.
Canada Digital Adoption Program
COVID-19 forced companies to get out of their comfort zone and look at different ways of doing business. For some, it meant developing an eCommerce website to sell online and for others it was finding technology to make their business more efficient. The Canadian Government launched two different grants to help:
“Grow Your Business Online” Grant
This grant provides small businesses a micro-grant of $2,400 to get online or develop eCommerce to sell your products to more people.
“Boost Your Business Technology” Grant
Designed for larger businesses, this grant can fund the hiring of a technology advisor up to $15,000. This advisor can help put together a plan to improve your online presence, market your company using digital media, or launch new cloud based software like a CRM. Once you receive your grant you’ll also be eligible for a hiring wage subsidy and a zero-percentage loan to help you fund your plan.
Digital Skills for Youth Program
This program helps businesses connect with underemployed post-secondary graduates where they can gain work experience and transition into their career. You can receive up to $30,000 to cover 100% of the wages, training and other employment related costs when you hire a youth aged 15 to 30 years old.
Note: The DS4Y program is current on pause but is expected to relaunch in the spring of 2023.
Google Ad Grant for Non Profits
If you’re a non-profit, Google has up to $10,000 a month available to help your business advertising using it’s hugely popular search engine. To maintain that grant, your organization needs to ensure you’re properly using the platform and maintain several minimum performance levels – which can be a lot of work. We also recommend having a professional help manage your ad grant in order to maximize their potential benefit.
Microsoft Ad Grant for Non Profits
Microsoft also offers non-profits up to $3,000 a month in free advertising using it’s Bing search engine. Although Bing is smaller than Google, it provides a different audience and is much less restrictive on minimum performance levels and easier to manage.
Let’s talk funding for your business
Finding the right type of funding for your business takes time, effort, and some trial and error. If you’re struggling with the application process of these or other grants, drop us a line at jon@calumetmedia.ca and let’s talk about we can help.
