Everyone knows that cash is king and for small businesses, this is the equivalent of oxygen. There are a few popular ways to inject cash into a business (other than the obvious – sales), such as: bank loan, shareholder loan, line of credit, personal savings, investors, or family. But, have you ever considered the possibility of applying for a government grant? Can you qualify for it?
What are government grants?
According to Canada.ca, “grants are unconditional transfer payments that the Government provides to individuals or organizations for activities that meet eligibility criteria set by the funding program.”
Some grants’ examples are:
1) Apprenticeship Incentive Grant for Women – taxable grant of $3000 awarded to registered apprentices which can be applied for twice (for a maximum of $6000)
2) Apprenticeship Completion Grant – taxable grant of $2000. To qualify, the apprentice would need to have successfully finished the program and get their certificate
Application can be done online and many grants have a specific time-windows (hence the majority are closed now), which is why it’s good to visit the site often and remain informed.
What are contributions?
Another option would be contributions. “Contributions are similar to grants, except that, in order to receive funding and be reimbursed for specific costs, recipients need to meet certain performance conditions. The government can also audit the recipients' use of funding.”
Don’t forget about provincial grants
Ontario provides a variety of funding which you can review and access by sector, ministry or list (A-Z), for example:
1) Ontario Automotive Modernization Program (O-AMP) – this is a partnership with small and medium sized automotive parts suppliers in Ontario. The grant is up to $100,000 to help cover up to 50% of eligible project costs
2) Tourism Development Fund – project-based funding, for example: encouraging investment in tourism or support capacity building in that industry
Keep in mind that some grants require a business to apply a few months prior to investing in a new project or purchasing new equipment, while some have different criteria as reimbursement of up to 50% of costs. Each grant is different in nature and it’s important to know exactly how the application process works. There are some consulting companies out there that can do all the research and apply on your business' behalf, but keep in mind that they would usually take a cut of what you will get which can go as high as 35%.