We often get asked whether there are government grants available to start a small business. A recent story on the CBC National News profiled a B.C. entrepreneur who purchased a book sold by a private company that would supposedly contain all government grants available for his business. This $500 book contained inaccurate information and even descriptions of long discontinued programs. In short, the book was worthless.
The plain truth is that there are no “hidden” government grants. There is no need to pay anyone for a listing of grants available to business. A few hours of surfing government websites will give you all the information you need to know and best of all it’s free.
Generally, governments don’t provide grants for the typical small business. Grants are used by the government as a tool to encourage development in a particular industry or technology. This development has to be government supported because private companies consider the risk to be too high to undertake the investment themselves.
For example, Sustainable Development Technology Canada (SDTC) has the SD Tech fund that they use to fund pre-commercial green technologies. This is meant to fund a very specific niche of technology. The NRC Industrial Research Assistance Program has some funding available for companies that are engaged in science based research and development. While not a grant, Canada Revenue Agency has the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program which provides tax credits for research and development.
There may be no grants available to start the average small business but that does not mean that there is no help available. Canada Government Services For Entrepreneurs is the best place to start. It’s a government website with links to many resources for small business. You can personalize the site for your home province and this will give you the location of the closest Business Infosource Centre. These Centres have a wealth of resources and people who will help you get you started.
The bottom line is that you need to have cash to invest in your startup. It may be possible to get a bank loan (see our post on CSBFA) but any banker is going to want you to have “skin in the game”. This means that you have a considerable amount of your own personal money at risk. Bankers have found over time that people who have a lot of their own money at risk work much harder to make a business a success than those who make no investment. People hate to walk away from something they’ve invested so much in. Private investors will view the situation much the same way.
Investigate and validate your idea, start planning your business, but make sure you save up money along the way to help get it started.