There are many grants and other funding programs offered by various government organizations that can help your business fund projects to expand, develop, research, and much more. Yet there are also many misconceptions about what funding can be used for, how the application process works, and where these programs can be found.
This article will help you make sense of government funding and provide some resources and helpful tips on starting your businesses' funding research journey.
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Government funding refers to any grant, subsidy, loan, tax credit, or other financial assistance program offered by any Federal, Provincial, or Municipal government or government agency.
The type of funding provided may vary depending on what the goal of a particular program is, the available budget, and many other factors.
Some funding programs, such as grants, require you to apply in advance of starting a project. Other options, such as tax credits, work retroactively by providing refunds or covering already incurred expenses.
Note that the government does NOT provide operational funding. Businesses in need of such funding can look into raising capital through other streams, such as seeking new investors or applying for institutional loans. A strong and optimized financial and tax plan can also help lean out expenses and win back much needed financing. Finally, there are temporary programs available to help businesses struggling with the pandemic, some of which are listed at the end of this article.
Common government funding programs include:
Note that while all these programs can be considered government funding, the application process for each category can be significantly different. For example, tax credits like the SR&ED Tax Credit involve a more complex application process than most grant programs.
Each funding program is created to support a specific purpose, such as encouraging business owners in a particular province to expand, or investing in upskilling the workforce in some industry. Understanding this purpose is important, as it will help you make a more accurate determination of whether your business fits the program, and also help you create a stronger application.
Grant funding is available for many business activities, including:
Each grant will have its own set of criteria and operate differently. For example, some grants are renewable, while others are one-time only.
Yes, grant or subsidy funding received from a government or government agency must be reported as income or as a reduction of an expense.
While criteria may vary across programs, most government funding programs require that a business be incorporated to be eligible. For some programs, additional requirements, such as a minimum time passed from incorporation, may also apply. However, incorporating your business solely for this advantage may not be the right move - make sure you consider all the advantages and disadvantages of incorporation before making a decision.
Searching for "small business grants" or "business funding" will often yield disappointingly few promising results from government websites. Instead of using these generic terms, try using more specific keywords. For example, if you are looking to fund hiring, try searching for "government hiring subsidies". Other keywords to look out for include: credits, rebates, subsidies, support, awards, contributions, shared costs, assistance, etc.
A great starting point for your research are government agencies that compile lists of loans and other financing:
Each province also has its own page linking to active support programs for businesses. The Government of Canada has a great page that compiles the links and key information for each province. You can also use the links below to access the business support page for your province:
For most programs, there will be monitoring and reporting processes outlined that you must adhere to. This may include periodic submission of financial information related to the project being funded, such as submitting funding expenditure reports. Make sure you are aware of these requirements and are able to provide the required information to prevent any mistakes that could possibly result in the loss of funding.
In addition, some programs may have post-completion requirements. For example, research grants may require you to publish the research results upon project completion. Other grants may have optional project success sharing requirements.
Make the most out of your new grant funding with expert financial planning and consulting - get in touch today to learn how YAC can help you optimize your business taxes and finances.
The Government of Canada has created multiple temporary relief programs to help businesses manage the pandemic. Note that the main purpose of these programs is to provide relief and support to struggling businesses, rather than encourage development or growth. As such, these programs are much easier to apply to, and the application timeline is typically much shorter; the above information may not apply to these programs.
CEWS - Canada Emergency Wage Subsidy
Eligible employers may be eligible for a subsidy covering a part of their employee wage expenses.
CERS - Canada Emergency Rent Subsidy
Eligible business and non-profit tenants may be eligible for a subsidy covering a part of their commercial rent or property expenses.
CEBA - Canada Emergency Business Account
Small business and non-profit interest-free loans of up to $60,0000 available to eligible businesses.
RRRF - Regional Relief & Recovery Fund
Relief funding provided by the Government of Canada to local regional development agencies to support affected businesses.
HASCAP loan guarantee
Loan guarantee program providing small and medium-sized businesses access to fixed-rate loans through their financial institutions.