Starting a small business in Canada can be an exciting and rewarding experience.
However, the financial demands of starting a business can be daunting.
Fortunately, there are many grants available to small businesses that help make this process easier.
If you’re looking for information on how to apply for a small business grant in Canada, you’ve come to the right place!
Eligibility requirements for small business grant funding in Canada
- The business must be registered in Canada. Having a business number is a hard requirement across all programs.
- Typically the business needs to be incorporated.
- To be eligible for most small business grants, you must have been operating for a minimum of 1-2 years. This requirement generally applies to new businesses, as grant funding is usually not available for startups. The duration of the operational period can vary depending on the grant program.
- The company must employ a certain number of people. To be an SME, the company must have fewer than 500 employees. Certain grants may be available for small businesses with fewer than 50 employees, so it is important to double-check the criteria.
Why do small businesses need grants?
As a small business owner in Canada, you likely have a great many aspirations for growing and developing your business.
Unfortunately, limited funds can be a hindrance when pursuing business growth initiatives.
It is often said that investment is necessary to generate greater returns.
The Canadian government provides various grants specifically for small and medium enterprises (SMEs), helping them access the resources necessary to grow and develop.
Every dollar counts, and with government funding, SMEs have the opportunity to take their businesses to the next level.
Government grants are beneficial for three primary purposes: hiring, training, and expanding.
a). Hiring Grants
A hiring grant is created to assist businesses in bringing on new staff. It can be used to cover salary costs and onboarding processes.
This can provide the necessary financial support to fill empty positions in your business! Most often, these grants are given out as wage subsidies.
A large portion of hiring grants are intended to help Canadian youth get new job opportunities, leading to many student hiring and internship grant programs being available to Canadian SMEs.
b). Training Grants
Training grants are given to help people acquire practical knowledge and skills in a particular field of study.
The government is eager to equip the workforce with the knowledge and capabilities to contribute to the development and evolution of the country.
Grants for businesses can go towards subsidizing learning costs for employees and business owners.
Applying for a training grant is a great way to reduce fees and provide learning opportunities for yourself and your team.
Don’t miss out on the chance to get the professional training you’ve always wanted!
c). Market Expansion Grants
These are grants utilized to help businesses broaden their scope of operations.
These grants can help to reduce the financial risk associated with entering a new market, which can be especially daunting and costly for small businesses.
Through these expansion grants, companies can look to expand domestically and even internationally to markets such as the United States, Asia, Europe, and beyond.
Related: How To Incorporate A Business In Canada
What’s the difference between a grant and a loan?
A grant and a loan are similar in the sense that they are both forms of financial assistance.
However, they differ in terms of the repayment requirements.
Unlike a loan, a grant does not require repayment.
Grants are typically awarded to businesses or individuals who meet specific criteria set by the granting organization.
The funds can be used for a variety of purposes including starting or expanding a business, undertaking research projects, and more.
In contrast, loans must be repaid with interest over an agreed upon period of time.
They may come from private lenders such as banks and credit unions.
How much grant funding can I get in Canada?
The amount of funding available may differ depending on the type of grant, either as a fixed sum or a percentage of the project costs.
It is also possible that a grant may have an upper limit for the amount of funding awarded within a given fiscal year.
You can combine multiple grants in order to receive the most government assistance for your business growth.
Let’s take a look at the most common ones: hiring, training, and market expansion.
- Hiring: Grants for hiring are typically based on the wages of the employee, covering between 20-80% of their wages for a certain period of time. This range is determined by the type of role being filled, with entry-level positions at the lower end and more technical roles at the higher end..
- Training: Training grant programs provide varying levels of coverage for different types of training. Coverage can range from 60-100% of the costs. In some cases, the program may even cover the entire cost of training.!
- Market Expansion: The greatest differences exist in the amount of funding available for market expansion programs. Some can provide up to $50,000 for finding, while others may offer hundreds of thousands. Generally, these programs will cover 50-75% of project costs, up to a predetermined limit.
Related: 10 Best Business Bank Accounts In Canada
What SMBs need to get started with grants
Preparing to apply for government grants?
Having the necessary documents ready can make the process much simpler.
Depending on the type of grant, the required documents may vary.
To help you get organized and make sure you have what you need, here’s a look at what to have on hand.
What you need to apply for hiring grants
- Business license
- Registered business number
- Job description
- Candidate resume
What you need to apply for training grants
- Business license
- Training course identified
- Course outline
- NAICS code
What you need to apply for market expansion grants
- Business license
- Business plan or export plan
- Marketing strategy
Applying for grants requires certain basic elements.
Each grant may have extra requirements, such as market research documents, letters of support, business cases, and video submissions.
The amount of documents needed to make a good case for your business depends on the grant type and size.
The larger the grant, the more documents you must provide to prove why your business should get the grant.
So don’t forget to study the applicant guidelines carefully to make sure you have everything you need.
Related: 4 Types Of Small Business In Canada: Pros & Cons
How to apply for small business grants in Canada
Submitting an application most often requires using portals, emails, and web forms.
The Applicant Guide will provide details on what must be included in the submission as well as any additional requirements such as specific file format, file size, or naming conventions.
Be sure to follow all instructions before pressing the submit button.
a). Portal Submissions
Most provincial and federal-level programs have their own portal for submissions.
Registering before applying is essential, as there may be additional steps required.
For example, CanExport requires you to create an account and complete the basic eligibility form.
To avoid any delays, it is recommended to complete the basic eligibility form at least 5 business days before submitting your application.
Portal submissions usually require going through a set of questions. Before pressing the ‘submit’ button, it’s essential to go through the questions, taking note of them and preparing the answers in advance to avoid any last-minute scrambling.
b). Email Submissions
Submitting an application via email can be a convenient and straightforward method.
However, it is crucial to follow the Application Guidelines as they typically contain specific instructions regarding the naming conventions, maximum file sizes, and accepted file formats for your application.
Failing to adhere to these guidelines could result in your application being disqualified.
Fortunately, many programs with email submissions provide templates to make the application process simpler, as you can just open the template and fill in the necessary details.
c). Web Form Submissions
Submitting a grant application through a web form is becoming increasingly more common.
Typically, these involve hiring or training grants that are relatively straightforward and require only a few details and short questions.
The submission process is simple and you will receive an email confirmation to confirm the successful receipt of your application.
Regardless of the method of submission, it is important to have all the required documentation ready.
This may include a business plan, quotes, financial statements, resumes, and more.
To find out exactly what you need to submit, read the Applicant Guide closely.
If you are ever unsure about how to submit your grant application, there is help available, such as program advisors, grant officers, and the Grant Angels at Granted Consulting.
Where can I get a list of grants?
Small business owners can find it overwhelming to search for grants individually.
The Government of Canada has resources to ease the process by bringing together the federal grant programs to provide support to small businesses.
Government grant programs
- Federal grant funding finder
- Federal indigenous grant programs
- Alberta grant programs
- British Columbia grant programs
- Manitoba grant programs
- New Brunswick grant programs
- Newfoundland and Labrador grant programs
- Nova Scotia grant programs
- Ontario grant programs
- Prince Edward Island grant programs
- Quebec grant programs
- Saskatchewan grant programs
- Northwest Territories, Nunavut, and Yukon grant programs
This list is not exhaustive – there are many more grant programs available for small businesses than those offered by federal and provincial governments.