There is a wide variety of grants available to small businesses in Canada. However, not every business qualifies. Read on to learn how you can research grant opportunities and take advantage of what the provincial and federal governments are offering.
Which businesses are eligible?
It’s important to research to see whether your business is eligible for a particular grant. However, there are guidelines that apply to most grants:
Innovative firms: Politicians in Ottawa often talk about productivity and innovation. Therefore, it’s not surprising that getting a grant depends on your sector. Environmental technology and biotechnology grants are widely available.
Research: If your company is conducting scientific research that may result in economic opportunities, there are grants available. You will need to show a track record.
Size: Many grants are available for small and medium-sized businesses. The good news is that firms with up to 500 employee can fit into this category. On the other hand, if the business only employs you and your spouse, the government may not consider it grant-worthy.
Employment: There are grants to subsidize hiring and training of employees, especially young people. The training should normally relate to a student or graduate’s field of study. Training someone to stock the shelves at a store isn’t likely to qualify. Politicians love to be able to announce grants that create jobs in their community.
Which businesses are NOT eligible?
Startups: Most small business grant programs require that you have an operational and financial track record of at least one or two years. This is because they want to ensure that you are not simply applying for the grant to get the cash; they want to know that your business is viable and that you will use the grant to grow your company.
Retailers and franchises: These are certainly businesses that are important to the Canadian economy, but the government will not usually give you grants. That’s because Ottawa is looking for innovative companies that drive economic growth or develop new products.
Structuring your organization
If you are just setting up your business, you need to decide what legal structure is most beneficial. This will have an impact on what grants you can receive.
Generally speaking, you need to be incorporated in order to be eligible to receive provincial and federal grants. So, it’s best to incorporate if you plan to employ a staff and apply for grants for hiring and training people. On the other hand, a sole proprietorship is fine if you simply want to run your business without the assistance of grants.
In certain sectors, it may make more sense to establish a non-profit organization rather than a corporation. For example, if you are establishing a private school or an artistic endeavour, you may wish to consider this route. Non-profits can be eligible for a wider range of grants than small businesses.
With a non-profit, you need to set up an independent board of directors. Of course, you can’t take out dividends like you can with a corporation – but the board can pay you a fair salary to cover your hard work. When you decide to retire from the organization or quit, you can’t “sell” the non-profit like you can a business. So, there are pluses and minuses to setting up as a non-profit.
Don’t rely on grants to be the key source of funding for your business. As we have indicated, most granting agencies require that you have a track record. And they will expect that you have other sources of money to operate – your own savings, business loans or funds from venture capitalists.
Do your homework. If possible, conduct you own research to determine whether there are granting programs available to your business. As we have mentioned, not every company will be eligible. The government of Canada has a website that lists grants, tax credits and other business support services.
Be cautious about websites that promise to help you find grants. Some firms will give you advice – for a fee. There are many legitimate companies that will research and write grant applications. However, there are some that take your money and simply send you a list of available grants. Before you apply for any grants, be sure to check the eligibility requirements to ensure that you qualify. There’s no point in spending time and money on a grant application if there is no chance that you will get the cash.
Research what’s available in your jurisdiction. Some programs that are available in the United States are not offered here in Canada. Or you may be eligible for a grant in Ontario, but not in Alberta.
Writing a grant application
Once you have identified a potential grant, the next step is to write the grant application. Again, check carefully that you meet all of the eligibility requirements.
Research the granting agency’s goals in providing the grants. Some government departments are tasked with finding employment for young people. Others want to develop skills for recent graduates. Be sure to emphasize in your grant application how you will be helping the government to achieve its aims.
If you feel you need professional help in applying, check out grant-writing firms. Ask for references of similar businesses that have been successful in getting government grants. Get a firm quote on how much it will cost to write the application. Then consider the size of the grant you might receive and weigh that against the cost of applying, considering both the fee or the professional grant writer and your own time. Applying for a grant does not guarantee you will receive one.
In summary: small business grants
The provincial and federal governments in Canada offer a wide range of small business grants. However, this does not mean that every firm is eligible or will receive money. It’s vital to conduct your own research to determine whether you meet the granting agency requirements and are likely to receive money. Good luck!