May 22nd, 2015
Many businesses thrive on grant money. Government funding can be a boon to a small business and a great stimulus for job growth. However, in order to ensure that these grants are fairly distributed, there are certain procedures in place. It is important to note that while there are a number of programs available, grants are rarer and harder to obtain than loans. Here are five things you should know about government funding that will save you time and help make your choices easier.
Know Loans vs Grants
Thoroughly analyze your current business as a guide in deciding what you want to pursue. Both the federal and provincial governments offer far more loan programs than grants, and small business grants are often geared towards young entrepreneurs. Will a loan be the better choice for both your current and future plans? Do your research and choose the right path instead of spending time on a plan that has little chance of success.
Know What’s Available
It is important to know every option available before you make a decision and that certainly applies to government funding. There are services out there that will advise on what is available and do the heavy lifting for you (full disclosure: we do that). If you prefer to do your own research, sites like the Canada Business Network and Canada Business Services for Entrepreneurs will provide many of the particulars you need to get a better idea of where to start.
Know the Locations
As you can imagine, many businesses seek to take advantage of “free money,” so the government has established levels of priority. Where you are located plays a key role in what is available and the likelihood you will gain approval. If you are in a thriving metropolitan area, your chances of receiving assistance are pretty scarce. However, your chances are much better in a less-than-robust region that the government wants to boost economically.
Know the Demographics
Certain groups are more in need of funding and the government gears their loan and grant agendas towards them. If at least 50% of your business ownership is female, there are a number of programs available to such groups as the Women’s Enterprise Initiative Program and the Paro Centre for Women’s Enterprise. Similarly, the federal government has several programs in place to aid aboriginal people looking to start businesses. Your gender or heritage can be a very important asset.
Know the Alternatives
If you look around and do your homework, chances are you will find that there are loans and grants for which your business might qualify. However, there is another way you can receive funding from the government: tax credits. These have their own sets of rules, but are also less stringent in terms of requirements. The SR&ED Tax Credit Program contains information about tax incentives that could result in a significant amount of money coming back to you. Both federal and provincial assistance is out there, but there are a number of things you should know about government funding before starting the application process. Fortunately, there are companies who can help you decide what you qualify for and how best to approach the application. Remember that loans are more easily obtained than grants, so make sure to consider both your current and future business plans.