As an aspiring small business owner, the one priority you may have is finding the financial support and options that are available to you. In addition to bank loans, money from family and savings, one other option to take advantage of are small business grants.
While getting approved for a business grant is generally more difficult than getting a regular business loan, small business grants can be a great opportunity to fund your business and expand your business.
What Is A Business Grant?
A business grant from the government is an amount of money given to your business that does not have to be repaid. This is one factor that makes grants a highly attractive source of funding.
However, some grants may have hidden costs like requiring you to match the funds you are being given or to contribute a certain amount, for instance.
Small business grants are offered by governments to financially support specific causes and businesses, and thus put more weight on the value and potential your business has to spur development in an industry. The amounts will vary and depend on the program, your business, and the industry.
Because individual grants are typically small amounts compared to a business’ full expenses, as part of a government funding strategy, businesses can work with consultants to stack their funding. This means that by combining different applications for your project, you may be able to cover most of your costs. You can stack provincial and federal programs where applicable, but you can only receive up to 75% of expenses for your project.
Government small business grants come with stringent restrictions that must be followed. These provisions can include terms such as using grant money specifically for things, such as:
- research and development
- providing high level training for a certain number of employees
- expanding business resources for a maximum amount
- buying specific assets
- covering marketing expenses
For some programs, your progress must be documented and tracked via monthly or milestone reports as part of the requirements.
What Government Grants Are Available In Ontario?
Because small business grants are often specific to a region, demographic or type of business, finding the right grant program can either be very easy or very difficult. It depends on how grant-rich your sector is and how well the industry falls in line with government objectives and strategies. Sectors focused on research and development in the environment, in technological innovation or in scientific research, are more likely to be targeted for funding. For instance, technology start ups may have an easier time finding a grant, but that would also make it highly competitive.
To maximize your chances of getting a small business grant, do your research first. Government funding can come from every level of government: federal, provincial, and municipal or regional. You can find many lists online for government grants for small businesses in Ontario. If you reside outside of Ontario, you can search Canadagovernmentgrants.org for grants specific to your province. Funding is also available through non-government agencies, as well. So be sure to explore all your options.
When looking at grant programs, ask a few questions as you go along:
- How many and what types of businesses were previously awarded a certain grant?
- What was the success rate of those applicants?
- Does the grant come with any time restrictions?
- What does the market and competition look like?
Knowing answers to questions like the above can give you the advantage in applying for a grant.
Applying For A Small Business Grant
After finding a program that applies to you, it is then a matter of submitting your application and proposal for that grant. It may sound simple, but the overall process is far from it.
Each grant program will have its own requirements, funding structure and application process. For instance, a business owner looking to further train his employees through the Canada Job Grant will be very different from an entrepreneur who wants to expand or bring business to an Ontario community through the Eastern Ontario Development program.
For example, applying for the Canada Job Grant can be appealing as the program can cover up to two-thirds of the costs for training employees for up to a maximum of $10,000 each, covering tuition, exam fees, textbooks and other learning material. The Canada Job Grant application is done directly through your province. Thus, for the Canada-Ontario Job Grant, this includes at least 5 application forms and a different application submission method for registering over 25 participants.
Compare this to applying for the Eastern Ontario Development program. For businesses active in a specific field such as life sciences, tourism, and advanced manufacturing, among others, this program can be a top choice. The program offers two streams of funding: Business and Regional. The stream for which you qualify will determine the amount you are eligible to receive and the amount you are required to contribute (up to a possible 50% of $1.5 million maximum in funding for the Regional stream and 35% of $1.5 million maximum for the Business stream). To apply, you would submit an eligibility checklist first. The program staff will then confirm if your project is eligible. If you are, you would then need to complete the required application forms.
Applying for a grant takes time and careful thought. As mentioned, each program is different. Thus, while it is possible to apply to more than one grant, you will want to avoid sending the same application pitch to different funders where possible. Also, follow submission guidelines to prevent being rejected on the grounds of non-compliance.
Aside from the mandatory application forms, you should think about your proposal. In most cases, eligibility for a program does not automatically mean you will receive the grant. Keep in mind that these programs have financial limits and so each program will be closely evaluated and awarded to the most promising candidate.
Lastly, when submitting your application, keep in mind that most programs have several calls for proposals per year. In general, you can apply to a program once for every open call period it announces, but you will have to wait for the next cycle to re-apply if you were unsuccessful. In some cases, application periods will last until the program’s funds are gone or if the government’s agenda for that program is met and the program is no longer needed. So if you are applying to more than one, you will need to keep track of when those occur and what grant trends are happening.
If you are a corporation in Ontario thinking about grant funding as a business growth strategy, call us to set up a consultation. OMQ Law can help you discover and explore possible options.