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So you’ve just started your business and you’re looking for some extra funding to get you on track for success. We’ll admit right off the bat that this is pretty tricky for startups.
Here at Granted, we’re often asked by new businesses how they can get ‘non-dilutive funding’, which is any kind of fundraising that doesn’t require you to give up ownership of your company. The Canadian government tends to offer funding to small and mid-sized businesses because they see some sort of value in what the organizations are offering. As a taxpayer, you can probably understand why it’s hard for an early-stage startup to prove that it’s making a positive impact on the Canadian economy and creating more jobs. The good news is that there are still some funding opportunities for startups here in Canada.
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How long the organization has been established (usually at least one year)
How many people are employed within the organization
How much the organization has made in annual revenue (usually at least $100,000)
FAQ
Yes, but there is a much bigger selection of grants for businesses that have been in operation for at least a year or two. It’s also important to note that grants are for funding specific activities, NOT ongoing operational costs. Furthermore, grants are reimbursements, so it’s very important to have good cash flow. In other words, you’ll need to ensure that you can pay for any expenses yourself before you see any money coming back.
No. Government grants aren’t used for ongoing projects, so costs for equipment, land, or any other permanent operations won’t qualify for funding.
Usually no, but you can use a hiring grant to employ a marketing professional or you can apply for a training grant and learn the marketing skills yourself. Some market expansion grants could potentially cover marketing costs, but these programs require your business to have been established for at least a year and to have generated enough revenue to qualify.
Generally speaking, no. There are some very rare cases of grants that fund activities that have already happened, but most grant programs require you to be approved before you start any projects you want funded.
Technically yes, but they are very rare and usually aren’t designed specifically with sole proprietors in mind. Applying for grants is a time-consuming and arduous process even for a full team, so running your own business all by yourself AND spending hours of your time applying for government funding is going to be difficult to say the least. Also, the government will typically want to verify that sole proprietors have been running their business for at least two years before any funding is given.
*This is only a general overview; specific grants have varying requirements.
Hiring grants are probably the most useful funding opportunities for startups because they offer wage subsidies to help businesses offset the risk of hiring someone new. They’re also usually the first type of grant that startups qualify for.
The Canadian government provides hiring grants because their priority is to help the country’s ‘youth’ (15 – 30 years old) secure employment. They also want to create new jobs and decrease the unemployment rate.
Training grants are a bit harder to secure for startups, primarily because most programs require your business to be properly registered for at least one year. Funding for training opportunities also varies greatly depending on which province your business is situated in, so there may be grants available for startups in some provinces but not others. The government offers training grants because they want Canadian organizations to upskill and retain their employees.
Qualifications vary depending on province, but generally:
There are several market expansion grants that many startups technically qualify for, but the types of activities that these grants fund probably aren’t what early-stage businesses are looking for. While expanding into a different country may not be high on a startup’s list of priorities, it is still highly recommended that you bookmark these grants for later because they are incredibly beneficial later down the line for organizations ready to take steps into new markets. The government’s motivation behind offering market expansion grants is to increase the visibility of Canadian products internationally, which, in turn, improves the Canadian economy.
Consulting for Research and Development (R&D) funding is not something we currently specialize in here at Granted, but we still have some useful resources for startups:
The Scientific Research and Experimental Development (SR&ED) Program is a federal tax incentive program designed to encourage Canadian businesses of all sizes, including startups, to conduct R&D projects in Canada.
Benefits for businesses include:
For startups interested in SR&ED, we recommend working with one of the following companies:
The National Research Council (NRC) is the government of Canada’s largest research organization that supports industrial innovation and the advancement of knowledge and technology development. Their Industrial Research Assistance Program (IRAP) provides advice, connections, and funding to help Canadian businesses increase their innovation capacity and take ideas to market. Click here to learn more.
There are technically dozens of grants available for businesses just starting out, but many of these funding programs are not specifically designed for startups, which means you’re competing against organizations that have more experience, time and resources dedicated to applying for grants. That being said, grants aren’t the only way to fund your business. A common way for startups to acquire early-stage funding is through angel investors who provide financial backing for businesses in exchange for ownership equity in the company. Although there aren’t a whole lot of grants available for startups, the fact that you’re already taking the initiative to look into government funding sets you apart from the rest. With these tips in mind, you’re well equipped to take advantage of grant opportunities in the future. Once your company has one or two years of experience (take a look at our checklist to make sure you’re all set up), be sure to reach out to our team of Grant Angels. As expert consultants who have over 10 years of experience securing grants for small and mid-sized businesses, we take care of the entire application process for you, making sure you get the funding that is most beneficial for your company.
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