If you want to start a business in Canada but need some funding, you’re in luck. The federal and provincial governments offer small business grants in Canada. There are many options, so chances are, you’ll find something that fits your needs. Just make sure to check the eligibility rules and apply them the right way and at the right time.
Both federal and provincial programs offer grants for business start-ups. Some of these are without any strings, meaning you don’t have to pay them back. Others come as loans or investment opportunities.
Here’s a simple guide to help you get more grant money for business in Canada.
Understanding Business Funding Options
When it comes to small business grants in Canada, funding usually falls into three main categories: grants, loans, and investments. Each has its own pros and cons, so it’s important to know what works best for your business.
Grants – Free Money, but With Strings Attached
Grants for small businesses in Ontario and across Canada sound like a dream. But there are some catches:
- Strict eligibility rules
- Often only for specific purposes (like innovation or hiring)
- Usually only cover part of the cost (e.g., 50% of a project)
- Long and competitive application process
- Government bodies take time to approve and release funds
- Extra paperwork, like progress reports
Most business owners use entrepreneur grants in Canada as bonus funding rather than their main source of money.
Loans – Easier to Get, But You Need to Pay Them Back
Loans are more accessible than grants, but they come with repayment terms. The good news? They’re generally easier to get. The bad news? Start-up business grants are hard to qualify for, and loans can be tricky for new businesses with little credit history.
To get approved, lenders often ask for a personal guarantee, proof of income, or some kind of security like property. Over time, businesses build credit and prove their ability to survive in their industry.
Government Loans vs. Commercial Loans
The Business Development Bank of Canada (BDC) offers help for small businesses in the form of low-interest loans. These can be easier to get than commercial loans and have better rates.
If you don’t qualify, consider credit unions or peer-to-peer lending. Still no luck? A loan broker may help you find other options.
Investment – No Repayments, But Less Control
Investment funding means you don’t have to worry about repaying money, but it often means giving up some control of your business. In some cases, that’s a good thing—investors may bring useful industry connections.
The government also has programs for capital investment, so be sure to check those out along with private options.
Choosing the Right Funding for Your Business
Finding the Canadian government grants for small business or loans depends on your business goals. Some businesses mix different funding types to get the best of both worlds. Explore all your options, apply smartly, and secure the funding you need!
How to Apply for Small Business Grants in Canada
If you’re applying for small business grants in Canada for small businesses, follow these five steps:
1. Check Eligibility
Before applying, read the fine print. If you don’t meet even one requirement, your application could be rejected. Pay attention to terms like “innovation” and clarify what they mean.
2. Understand the Application Process
Know these three things:
- When applications open and close
- The exact steps for applying
- What supporting documents you need
If applications are open year-round, apply right after the program gets new funding for the best chance of approval.
3. Fill Out the Application Properly
- Double-check all details before submitting.
- Make sure spelling, grammar, and formatting are correct.
- If documents are required, submit them in the right format and within the right timeframe.
4. Customize Each Application
If you’re applying for multiple entrepreneur grants in Canada, don’t send the same application to every program. Tailor each one to the specific grant provider.
5. Confirm Receipt of Your Application
- If applying online, keep track of submissions.
- If you don’t receive confirmation, follow up. Sometimes applications get lost.
How to Apply for Small Business Loans in Canada
Getting a loan can be tough for small businesses in Canada, but programs like the Canada Small Business Financing Program (CSBFP) make it easier. This program helps small businesses secure loans by sharing the risk with lenders.
Over the last decade, more than 53,000 small businesses have received CSBFP loans, totaling $10 billion.
Who Can Apply?
To qualify, your business must:
- Be a small business or start-up operating in Canada
- Have gross annual revenue of $10 million or less
Who Can’t Apply?
- Farming businesses (there’s a separate program under the Canadian Agricultural Loans Act Program)
How Much Can You Borrow?
- Up to $1.15 million total
- Up to $1 million for term loans (for land, buildings, equipment, and leasehold improvements)
- Up to $150,000 for intangible assets and working capital costs
- Up to $150,000 for lines of credit
How to Apply for a Loan
- Talk to a financial officer at a bank, credit union, or caisse populaire in Canada.
- Submit your business proposal for review.
- If approved, the lender will issue the funds and register the loan with Innovation, Science and Economic Development Canada (ISED).
What Can You Use the Loan For?
Term Loans Cover:
- Buying or improving commercial property
- Purchasing or upgrading new or used equipment
- Leasehold improvements (renovations on a rented space)
- Intangible assets like software or working capital
Examples:
- Buying commercial vehicles
- Investing in restaurant or hotel equipment
- Upgrading computers or telecom systems
- Purchasing production equipment
- Covering costs to buy a franchise
Lines of Credit Cover:
- Day-to-day expenses (working capital)
Interest Rates
- Term loans:
- Floating rate: Lender’s prime rate + 3%
- Fixed rate: Lender’s mortgage rate + 3%
- Lines of credit: Lender’s prime rate + 5%
Fees & Terms
- Registration fee: 2% of the total loan (can be financed)
- Security: Lenders may require personal guarantees or business assets as collateral
Need Help Starting Your Business?
If you’re ready to launch your company and need help with business registration, company formation, or funding guidance, Bestax can help. Contact us today to get your business up and running the right way!
FAQs: Applying for Small Business Grants in Canada
1. How do I apply for small business grants in Canada?
To apply for small business grants in Canada:
- Identify Suitable Grants: Use resources like the Business Benefits Finder to find grants that match your business needs.Government of Canada
- Review Eligibility Criteria: Ensure you meet all requirements before applying.
- Prepare Necessary Documentation: Gather financial statements, business plans, and other required documents.
- Submit Application: Follow the specific instructions provided by the grant program
2. How can I obtain government grants for my small business in Canada?
To secure governmental small business grants in Canada:
- Research Available Programs: Explore federal and provincial grants relevant to your industry.
- Understand Application Processes: Each grant has unique requirements; read them carefully.
- Consult Professionals: Seek advice from business advisors or organizations like the Small Business Accelerator.
3. What is the BC Small Business Technology Grant?
The BC Small Business Technology Grant, known as the Innovate BC Tech Co-op Grants Program, provides up to $20,000 annually to help businesses hire co-op students. This initiative supports innovation and growth within small tech and non-tech organizations in British Columbia.
4. Does the Canadian government assist in starting a business?
Yes, the Canadian government offers various programs to support business startups, including grants, loans, and advisory services. Resources like the Canada Digital Adoption Program have been available to assist businesses in adopting digital technologies, though some programs may no longer accept new applications.
5. What is the $20,000 grant for small businesses in Ontario?
Specific details about grants for small businesses in Ontario can be explored on their website. Grant programs can vary, so it’s advisable to consult official Ontario government websites or local business support organizations for current opportunities.
6. Do I have to repay the Ontario Small Business Grant?
Typically, grants are non-repayable. However, it’s essential to review the terms and conditions of each grant program to confirm whether repayment is required.
7. How can I secure startup funding in Canada?
To obtain startup funding:
- Explore Various Funding Sources: Consider grants, loans, and investment opportunities.
- Prepare a Solid Business Plan: A well-structured plan enhances credibility.
- Utilize Funding Search Tools: Platforms like Fundica can help match your business with appropriate funding sources.
8. What is the grant application process?
The application process for small business grants in Canada generally involves:
- Identifying Appropriate Grants: Find programs that align with your business objectives.
- Reviewing Eligibility Requirements: Ensure your business meets all criteria.
- Preparing Necessary Documents: Compile financial records, business plans, and other required materials.
- Submitting the Application: Follow the specific instructions provided by the grant program.
9. Who qualifies for a business grant?
Eligibility for small business grants in Canadavaries by program. Generally, businesses that are incorporated in Canada with fewer than 500 employees may qualify. Each grant has specific criteria, so it’s crucial to review the eligibility requirements of each program.
Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts.
