A small business grant is a monetary funding opportunity given to a small business to help it overcome some of the initial hurdles it faces due to a lack of income early on. This initial funding support can help a business that has yet to profit or have a break-even month find its footing and cover the early costs of business. It is usually done based on having very few, if any, strings attached for the business owner and is usually provided by the government. They can be a godsend for a small business owner just starting, helping them build their businesses more quickly. Knowing how to get a small business grant, how these grants can be spent, and their purpose can bolster your chances of reaching your business goals.
Small business grants have purposes for both the company receiving them and the government organization providing them.
For the company receiving it, the purpose of these grants is to be able to act like a stimulus package. This can help them cover some earlier expenses in being a small company before they see the profits involved in being a larger, more established business. This quicker business development can help a small organization grow quickly. Much like business insurance, they provide a safety net for the company to fall back on.
From the government’s viewpoint, these funding programs encourage economic development. Hopefully, the business receiving the government funding will use it to grow into an organization capable of employing others and providing a product or service that people will want. This will boost employment numbers and increase the money the government makes on taxes in the long term. The federal, provincial, and municipal governments each have different grants available.
The three main types of business grants available in Ontario are hiring grants, training grants and business expansion grants. Each of these must be spent in specific ways. When you get a grant in Ontario, there are limitations on how you spend it. The government doesn’t just give your business money and lets you spend it however you want. The government wants you to spend the money on things that will benefit society as a whole, and while you can still use it primarily to help your business, there still needs to be some benefit to the government. To get a small business grant in Ontario, you must often have receipts or some other evidence that you will use the grant in the way it was mandated. The three most common types of grants are hiring, training, and market expansion grants, each of which can benefit your business and society when used right.
Hiring grants are relatively straightforward. They must be used to hire new staff not previously employed by you. Many times, as part of the conditions to get a small business grant of this type, there are stipulations that the funds must be used to hire people who are on the outside looking in when it comes to employment, such as younger workers who do not have as much experience as those in more senior positions. However, a large portion of these grants have no such stipulations. This employment support will often pay a portion of the salary for these new hires for a brief while. Often, this period of time will be three months, making it equal to a probationary period, but other situations are also common. The goal here for the government is to create more jobs, and it is a great way for your company to bring on new talent at a much lower cost to yourself than normal.
Let’s say that you have enough employees. Either through hiring them yourself, using your connections, or acquiring hiring grants, you were able to acquire a team of hard-working individuals to help you run your business. However, maybe there’s a skill set that you need that’s hard to acquire in your current location. You may want to take your already talented employees to the next level and gain an edge over your competitors. Maybe your field has expensive annual training that you’re legally required to give all your employees, and you want to get a small business grant to cover the costs. In cases such as these, your employees need training. If this is the case, training grants are the answer. They will often pay, in part or in full, for any training courses or other upskilling you want to give your employees, increasing their skills and talents.
Market expansion grants cover a very wide range of possible situations, meaning that there will almost certainly be some grants that your business can put to good use. Many business expansion grants include items like money for research & development, marketing activities, new equipment, and a wide variety of other business interests that are needed when a company wants to expand into a new area. You may also want to use the money from some small business grants you will be eligible for to help fund some upcoming projects. If you want to get one, a market expansion grant may be the best option available to you.
There are many business grants available in Ontario, including the Canadian Digital Adoption Program, the Canada Ontario Job Grant and The Canada Summer Jobs Program. Many of these can be found on a page dedicated to providing business funding on the province of Ontario’s website. Many of these are only open to certain types of entrepreneurs, such as the need to be a young or indigenous entrepreneur, but there are also many options open to anyone who wants to start a business.
There are others that can be found with your city’s chamber of commerce. These will vary by area, so there are very few guidelines as to what is and isn’t available, but almost anyone who wishes to get a small business grant should be able to find a few that both they and their business are eligible for.
There are four steps to getting a small business grant in Ontario. These steps are to register and run your business, find the grants to want to apply for, ensure you can apply for them, and submit the application for the grant.
If you would like to get a small business grant in Ontario, you need to register your business. Also, business grants require you to start your business. This includes having hours of operation and having products or services you sell for a profit. To summarize this step, you need your company to be legally recognized while also being open for business.
The most common starting point for this is to go online and search for business grants in Ontario. The most common place to find these is on government websites, although there are lists featured on privately owned sites as well. Another place to check is with your local chamber of commerce, as they will likely also have many grants available to apply for.
It’s also possible that some of your business contacts might know about some grants available to you. Although there is no guarantee that anyone will know of any that you couldn’t find otherwise, it is worthwhile to ask.
Although there are many places you can find small business grants, it is important to ensure that the one you are applying for is legitimate. When trying to get a business grant, it is important to know how to identify a scam and avoid being taken advantage of.
Applying for a funding program can take a lot of time. When starting a new business, time is one of your most important resources. It could, in fact, be the most valuable since you can never get it back. For this reason, you mustn’t waste several hours applying for a government grant if you don’t meet the eligibility criteria. Most business grants that have requirements are upfront about them, such as being the correct business size or only being available to certain industries, being in a certain location, and more. These requirements are usually made very visible to potential applicants; they are easy to miss if you keep clicking ‘next’ like you’re skipping video game cutscenes. A minute of reading can save hours of work.
Each small business grant has differing instructions on how to apply for it. It is best to look at each grant individually and the specific instructions provided within the grant itself as you fill it out. If you have any questions, the organization providing the grant is usually available to answer them.
Usually, when you get a small business grant, there are limits on how to spend the money. For example, some grants that are industry-specific might say that you must spend the money given to you on very specific types of equipment unique to that industry. Others might specify that the funds need to go to hiring recent grads under 30 to incentivize companies to hire younger workers. It’s common for grants to specify that they must be spent on items like training costs or certain aspects of business growth. Each grant should make it clear either before or very early during the application process if there are stipulations like this, so be sure to pay close attention to small details such as these at any point throughout the process.
The main difference between a business loan and a small business grant is the requirement to pay them back. When you’re given a loan from a financial institution such as a bank, it is expected you pay it back with interest. In addition to this, paying it back late impacts your credit history. Although there are certainly times when the quick cash coming in the form of a loan is needed to get adequate funds, paying it back with interest is a massive thing that you must keep in mind when considering borrowing. Since a grant doesn’t come with these strings attached, it can give them a head start.
Funding is when you get another person, usually a previously successful entrepreneur or established individual, to invest in your company. This involves this person giving you a set amount of money and often some advice on your business plan in exchange for a portion of ownership of the company. For example, they might give you $30,000, but they’re paying to now own 30% of the company, therefore getting 30% of the profits. Those familiar with the show Dragon’s Den will have seen deals like this play out.
This can be a great way to get fast money and some great advice. However, it also means you must share the profit. When you get a small business grant in Ontario, you don’t give up ownership, allowing you to keep full possession of the company.
Yes, there will almost certainly be locally available grants for you. Most of these can be found by contacting and partaking in your local chamber of commerce. They will be able to provide you with information on business grant programs and where you can apply for them.
While getting a small business grant can be a great way to give your business a head start, it’s important to ensure that you’re applying for ones that you have a plan to use. While getting a small business grant can be a great way to give your business a head start, it’s important to ensure that you’re applying for ones that you have a plan to use. If, for example, you are hoping to remain a solo act, there’s no reason to apply for hiring grants. If you do plan on hiring some people to work for you and want to make use of hiring grants, make sure there are productive positions set up for your new employees. Ensuring that your grants are put to good use is a needed step in getting the head start they can provide.
This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.
