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Small Business Grants in Ontario

Whether you’re planning to grow your business, hire or train new employees, or even conduct essential research, Ontario has grants to accommodate your goals. And regardless of what stage your business is in, if you’re able to secure funding through a grant, which is usually funds that don’t need to be paid back, you must invest some time in exploring those options.

Small business grants and financing options in Ontario 

While there are several business grants available, there tend to be very specific rules around which businesses can access these grants. It’s important to take the time to read through the eligibility criteria for each one. It’s not uncommon to spend hours and even days putting together a proposal only to find out that your business was never eligible to begin with.  

Grants are categorized into several sections. We’ll list and each of these categories along with the specific opportunities below. 

Research and development — Small business funding in Ontario 

New business owners are often surprised just how much research goes into running a business. Particularly if you’re building new technologies, research and development play a major role in how effective your product will be to consumers. Here is a list of Ontario funding opportunities specified for research and development: 

Business expansion — Ontario grants and loans 

If you’re looking to expand your business, these are the grants you should be looking at.

Expansion can mean different things. Maybe you’re expanding into another part of the country. Maybe you’re expanding to a different country altogether. Again, it’s important to read through each funding opportunity to understand what is allowed and not allowed should you secure the funds. 

Ontario grants to hire and train employees  

Hiring and training employees is one of the keys to sustaining your business.

You need a refined system for recruiting and keeping talent, which will include onboarding, training and some type of development. High turnover can be costly, which is why grants like these were developed: 

Capital investment grants in Ontario 

To be clear, funds from capital investments are meant to be used to purchase fixed assets. That can include real estate (a building your business is operating out of), land or the machinery needed to run your business. Ontario puts a big emphasis on capital investments for small businesses, so this is a good opportunity to seek some funding. 

Managing your resources 

There are other ways of managing your business resources that don’t exactly require funding. These include the following: 

  • Tax credits — Reducing costs for your business should always be a priority. If there’s a way to increase efficiency at a lower rate without compromising quality, then you should adopt that efficiency into your systems. Tax credits are one way of doing this. They’re often given in return for operating in a way the Ontario government recognizes as advantageous to a community or the general economy. You can qualify for tax credits for hiring students, producing Canadian films, or even for your research and development (R&D).  
  • Wage subsidies — It’s possible to get wage subsidies for everything from hiring internationally educated IT professionals, hiring Ontario tech grads, Indigenous youth or interns. The aim is to incentivize your business diversify its hiring practices. This is a helpful way to keep your labour costs down.   
  • Funding for superclusters — A supercluster is a group of businesses in similar or different industries of a particular region that combined can have a more broad impact on the overall ecosystem. The funding of this grant is made to the not-for-profit group that has the vision to bring these businesses together. If you’re able to show how combining these businesses can create more opportunities both regionally and globally, then you have a chance of being awarded this grant. This is a new grant for Ontario that only started in 2017. It’s time-boxed with a two-step application process, the second of which is selected from the initial application.  

Other ways to finance your business 

Grants are one way to access funds, but not the only way. Loans are less dependent on your business fitting certain criteria and more dependent on the viability of your business.

The terms are more general with the one glaring difference being that loans must be repaid on a predetermined schedule. 

Is your business ready for a loan/financing 

Before getting into the different business loans in Ontario, you need to assess whether your business is ready for financing.

Not every business should take on financing, and there are ways to measure if you’re ready. 

  • Have you proven your product/service works? — This sounds so obvious, but it’s not. To know if your product works, it means you’ve tested it in the environment it will exist. This doesn’t mean your business has to be fully operational. Having a prototype that you’ve tested thoroughly still counts. But it doesn’t make sense to even approach a lender without having proven the viability of your product or service. 
  • You have a plan to monetization — Loans aren’t free. The lender is assuming you have a plan that includes monetizing your business. If you don’t have a clear path to becoming profitable, then your business is not ready to take on any type of financing. 
  • You have a team ready to execute — This step is so overlooked. Assembling a qualified team before applying for any type of loan only enhances your chances of securing those funds. Take the necessary time to hire qualified, innovative thinkers that strengthen your weaknesses. 

These aren’t just guidelines to follow before seeking a loan, they are also good practice for your business. Once you’ve thought these points through, then it’s time to look for small business loans. Here are a couple worth considering: 

Small business loans from BDC 

With a small business loan from BDC, you can secure up to $100,000. Funding requirements aren’t specific. According to BDC, you can use these funds to buy equipment, attend tradeshows, apply for a patent or trademark, plus other general business expenses. It only takes 48 hours to get approved and as long as you’re a Canadian company generating revenue for at least 24 months with good credit history, you’re eligible to apply. 

Canada small business financing program 

As business loans go, this program is a bit more rigid. The eligibility is straight forward. As long as your a Canadian business generating less than $10 million in annual revenue, then you can apply. But there are restrictions on what the funds can be used for. 

Funds accessed through this loan can be used for the following: 

  • Equipment 
  • Business vehicles 
  • Renovations 
  • Commercial property 

Funds received through this loan can NOT be used for the following: 

  • Working capital 
  • Inventory 
  • Labour 
  • Advertising

As you can see, there are lots of opportunities for your business to access funds either through a grant or loan. Consider what your current business needs are first before searching for funding. If you have to create a reason to apply for a business loan, it’s probably not the right time. 

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