The outlook of the Canadian start-up and small business market is incredibly bright. As of December 2017, 97.9 per cent of all businesses in Canada were small businesses and start-ups, with more than half of these being concentrated in Ontario and Quebec. It goes without saying that these are vital for the success of the economy and future innovation.
Many entrepreneurs who apply for government grants are missing out on funding potential because they are uninformed of the scope of funds offered by the Canadian government. In particular Ontario has its own set of grants aimed at technology-enabled businesses, some non-repayable. In this sense, the government is doing a great job and ensuring they offer support to those who want to contribute to the economy and overall development of Canada – however the information is often times difficult to understand and find. This is where a grant consultant’s services come into play.
Understanding what funding programs exist, how to access them and which one is most appropriate for the specific business the entrepreneur is looking to launch are all key components of long-term financial success. A consultant’s job is to clear the fog around all of this and maximize the funding potential.
Rule number one: not all grants mean free funding
A common mistake many up and coming entrepreneurs make is to associate a grant with free money. This is rarely the case and all grants do come with strings attached and understanding what those involve is paramount.
A good example here is the situation where a small business needs to make a financial investment of 10-20 per cent before receiving the grant. This means that although the grant itself does not need to be repaid, in order to access those funds, an initial investment is needed. Another example specific to Northern Ontario relates to job creation and says that any proposed new business looking to apply for a grant must operate on a full-time basis and enable job opportunities in the region.
There are two main types of government funding support: one is retroactive where tax incentives are provided, and the other is known as proactive, in which funding is provided upfront.
Government grants are particular
It is not news for anyone that the purpose of Government grants is to provide financial support to businesses planning to operate in a particular industry and region which aligns to wider national priorities. For example, if larger priorities are to support the creation of more biotechnology hubs in Ontario, then a grant applicant looking to do just this will have more advantages than someone who is, let’s say looking to open a bakery or a retail store. And in reality, this is the case most of the time.
However it does not mean that there aren’t any other options available and the entrepreneur is left to figure everything out on their own, but the intricacies of the process and options justifies the need for a professional who knows them inside out. There are around 4,500 grants and incentives programs for businesses and other organizations available in Canada and that means the process can become rather overwhelming and intimidating.
The application for a grant itself needs to be treated with utmost importance – regardless of the industry and the nature of the business, the market is competitive and so are the other applications. Only the strongest, most expertly crafted ones will be able to cut through the smoke and upstage the rest in the race for approval.
There must be a grant for that
Grants are also not restricted to strictly opening a business per say. There are many successful cases of already launched start-ups and small businesses receiving government grants for things such as expansion or employee training and development. In addition to this, the government is vividly interested in offering grants for research and development and innovation spurring. This has enabled a rise in various start-up companies in particular technology and healthcare.
It’s no wonder Canadian entrepreneurs stated in a recent survey that AI and big data are the most promising areas today and in a decade from now. With life sciences, digital health and energy innovation are following closely. The same survey also revealed that six out of ten such start-ups have tapped into government benefits such as grants and 60 per cent are adamant this support has a positive impact on innovation economy.
Equally important to mention is that businesses can be eligible for more than one grant at a time, but there needs to be awareness of funding limits.