New business grants in Canada are provided for the purpose of helping a start-up enterprise. Often, the funding is provided in addition to the entrepreneur’s own funds and may be referred to as a “non-repayable contribution”.
The level of help offered to budding entrepreneurs can vary according to location and circumstances, and the assistance can be in a variety of forms. The first type is grants contributions, and financial assistance, often including new business grants. Some of the programs are available in all provinces and territories, and others that are allocated locally, provincially, or by territory.
There are also loans and cash advances. This is money provided at a very favourable rate for the purpose of starting or expanding a business, or taking advantage of a buying opportunity or export market expansion, for instance. The loan or cash advance may even be forgiven if you fulfill certain conditions, in which case it becomes a grant. For instance, there could be a case where a new business gets funding and, in exchange for providing employment, the loan becomes a new business grant.
Then there are loan guarantees. With these, the government provides an assurance to a lender that funding will be repaid, so that typically loosens up the purse strings for a business that ordinarily would have difficulty qualifying for a loan. For example, a new business may not sufficient credit history of collateral, but it needs additional funding to supplement a new business grant. That’s where a loan guarantee will come to the rescue.
There may also be tax credits for businesses, particularly those that hire employees or open in an under-served area. If you’re thinking that you can’t afford to hire employees, then you may be able to take advantage of wage subsidies. Particularly if you’re just starting out, funds can be tight, so a wage subsidy can be a form of a new business grant that can help you grow.
Some provinces and territories have programs that target persons from particular groups, who are starting a new business, especially in the case where people in a particular demographic may be under-represented as entrepreneurs, might have experienced discrimination in the past, or else possibly face potential hurdles to overcome. Some examples are programs that target women, First Nations Canadians, young entrepreneurs, persons with disabilities, and more. Many of these funding programs will include the added benefit (as an in-kind grant) of providing business help and advice to the new entrepreneurs, including help with documents such as business plans, applications for further grants, financial projections, and much more. The funding and the assistance provide the best chance for succeeding and thriving.
The idea for the government providing new business grants is that small, thriving businesses form the backbone of the economy. The Canadian and provincial governments recognize that communities thrive from having a vibrant business sector, and that the resulting commerce keeps the economic flow going. Providing an initial hand up can pay big dividends, so forward-thinking elected officials see the value in promoting these types of programs.