Finding and securing financing is an important part of starting any small business. You need money to be able to start, operate, and eventually grow your operations. But when it comes to small business grants, there are a lot of misconceptions and even inaccurate information out there. There really isn’t any free money, but there are specific programs or incentives that may be able to assist very select types of businesses. Get your notebooks out, we’re giving you some handy grant tips!
Can I Get a Grant to Start My Business?
It’s important to know that there are no general small business grants; each grant program is run independently and will have very specific qualification criteria. There is also no single entity whose sole responsibility is the administration and delivery of grants. You will need to do your research to see if there is anything out there for you. The government is one source for grants, but non-profits, municipalities, institutions, and private businesses may also offer grants and subsidy programs.
Show Me the Money (Where’s the Money Hiding!?)
To explore what opportunities are available when it comes to government grants and other funding options, the Canada Business Network has a free search tool that you can use. Take the time to review the summary of each grant program. If you feel there may be a fit for your business activities, continue reading further into the specifics of the grant program eligibility, parameters and application instructions. There will be very specific terms and conditions you will need to meet, and sometimes the application process can be quite extensive. Time frames and deadlines vary.
Grant Eligibility Criteria Can Include the Following Considerations:
- Location (e.g. Alberta, Red Deer County, etc.)
- Level of government (e.g. Federal, Provincial, Municipal, etc.)
- Industry type (e.g. agriculture, technology, tourism, etc.)
- Business structure (e.g. non-profit, corporation, etc.)
- Stage of business (e.g. pre-startup, startup, existing, etc.)
- Investment (e.g. 50% contribution from the business itself, etc.)
- Type of activity (e.g. hiring staff, research and development, etc.)
- Demographic group (e.g. youth, women, people with a disability, rural, etc.)
- Government priorities (e.g. natural disaster assistance, new regulations/legislation, etc.)
- Availability (e.g. funds available for disbursement, the total number of applications, etc.)
- Additionally specified purposes (e.g. wage subsidy, reduce pollution, export, etc.)
Personal Investment Is Key
Grants usually utilize a formula like Spend Some Money = Get Some Money Back. This equation basically means a business owner must have funds available to invest in order to receive something in return. It is important to note that with grants there are no guarantees. You want to be sure your business can sustain itself even without the assistance of supplemental and non-repayable funding. If you do end up 1) finding a grant that is applicable, 2) completing the application process, and 3) receiving funding, there will be stringent conditions on how grant funds are used. In addition, there will also be reporting requirements.
Be Wary of Scams
Be aware that there are scams from private businesses (that may look like government) that promote the abundance of grants/free money for a fee. If it sounds too good to be true, it probably is! If you purchase these from these companies, you may be disappointed as there is a good chance you won’t likely find a grant applicable to you. For more information on these scams, take a look at this article by the Competition Bureau on companies that promise government grants and loans. You may also want to check with the Better Business Bureau to see the rating of the business selling these grant publications.
Other Financing Options
Searching and applying for grants can take a significant amount of time and energy. More often than not, there aren’t many grants applicable to your business. But don’t worry, there are other ways that you can finance your business venture! Check out our resources on conventional financing and alternative financing options. Be creative and don’t be afraid to think outside the box when it comes to financing your business. Need help navigating your financing options? We help thousands of business owners every year with financing inquiries, we can help you too.