7 popular grants for startups

Competition for business grants can be fierce, but if you have a business dedicated to improving the lives of others and are committed to research, global initiatives or expanding job opportunities for new graduates, you may qualify for a grant from the Canadian government, your local province or territory, or other businesses and organizations. Startup grants are hard to win and many require you to use the funds for a specific purpose – but some are available to all business startups who meet the criteria for the grant in question. With so many grants out there, you can find your business the free money it needs to be successful.

Before applying for a grant, keep in mind that most startup grants are specific to a certain province or territory, so it’s best to search the Innovation Canada website to see what you’re eligible for since you’ll need to take your business goals, size, sector and location into consideration before applying for a grant.

SD Tech Fund

Running a clean technology business? The SD Tech Fund caters toward businesses that are looking to support the green industry. Grants are offered to businesses working in the clean energy, air, water and climate change space. Offering a 33% contribution, the SD Tech Fund will continuously fund a project that has 4-6 milestones. Funding is continuous as each milestone is met.

Any projects that support the productivity and competitiveness of Canadian green industries will be considered for the grant. This grant is available Canada-wide.

SmartStart Seed Fund (Ontario only)

Offered by the Government of Canada, the SmartStart Seed grant provides funding up to $70,000 for startups. The only catch is you’ll need to be operating in the tech or innovation space in the province of Ontario. In addition, funding up to $7,500 is available for training and other professional support services.

To be eligible, you’ll need to meet the following requirements:

• Be a first-time applicant
• Be a Canadian citizen or a permanent resident
• Meet the age requirements
• Own an incorporated Ontario-based start-up
• Own your intellectual property
• Match the main funding at a rate of 1:1
• Obtain an endorsement

This grant is available to businesses located in Ontario only.

Industrial Research Assistance Program (IRAP)

One of the larger grants out there, the Industrial Research Assistance Program IRAP provides startups with funding between $50,000 to $500,000. Larger businesses tend to get more funding, however many small businesses are eligible for smaller grant amounts. IRAP supports the development and commercialization of technology-driven products, services or processes in Canada. Technology can be new or improved, giving a wider range of applicants the chance to receive grant funds.

This grant is available Canada-wide and in order to be eligible, you’ll need to have at least one full-time employee. The grant money will be issued before you incur the expenses, so if you’re thinking of applying, head online before you begin developing or advertising products or services.

Scientific Research and Experimental Development (SR&ED)

The SR&ED is not actually a startup grant, but rather a refundable tax credit. Claimed on your yearly taxes, this credit is geared toward startups and businesses conducting research and development toward products, services and processes.

This refundable tax credit is available to all businesses Canada-wide. While it depends on the type of business you’re running, you could be eligible for a 15% refund on any research and development taking place at your business.

Canada Job Grant (CJG)

The Canada Job Grant offers up to $10,000 toward training and developing your workforce. The funding can be used for a variety of purposes such as hiring and training programs that develop skillsets and enhance employee performance on the job.

Although this grant is available Canada-wide, it’s important to note that each province and territory usually has it own CJG program – with the exception of Quebec – which will likely dictate specific funding requirements and eligibility criteria. You will need to meet the eligibility requirements for the province or territory that your business is located in.

CanExport

If you’re working in the export business, you could be in luck with the CanExport grant. If your business is operating in a market that represents less than 10% or $20,000 of international sales over the past 24 months, you may be eligible to apply for the grant. The CanExport grant helps to fund research and competitive analysis, product certifications, translations of marketing and packaging supplies and professional development and marketing tools such as attending conferences and trade shows.

The grant includes funding up to $50,000 or up to 50% of your project expenses. It is available Canada-wide. Providing funding for up to 1,000 business per year, you will need to meet specific criteria which includes employing 1-500 employees, running a small or medium sized business, have an annual revenue of at least $100,000 and have a $20,000 project on the table. While this grant may not be super helpful for some startups who are struggling to bring in income, it’s a good one to keep in mind should your business be successful in a niche industry.

Strategic Innovation Fund (SIF)

Provided by the Government of Canada, the SIF focuses on advancing innovation across a number of sectors in Canada. This fund looks to help businesses and startups simplify and accelerate processes and technology, as well as provide assistance that is focused on results.

The Strategic Innovation Fund is available Canada-wide and has four different “streams” focusing on a specific objective:

• Stream 1. Encourages research and development that focuses on accelerating the current and new production of technology transfer, as well as the commercialization of new products, services and processes.
• Stream 2. Focuses on facilitating the growth and expansion of businesses across the country.
• Stream 3. Aims to attract and retain large-scale investments into the country.
• Stream 4. Encourages the advancement of industrial research, development and technology through collaboration between the private sector, researchers and non-profit organizations.

The Strategic Innovation Fund (SIF) is available Canada-wide.

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Bottom line

Free money is out there to help your startup business navigate through those first few difficult years. While applying for startup grants can take valuable time, receiving a grant can make a difference in the day-to-day operations of your business — especially if you’re granted a large one or get access to free advertising.

If you’re unsure where to start or are wondering if your business is eligible, there are plenty of resources out there like Mentor Works that can help you get acquainted with different grants and guide you in the application process.

Frequently asked questions about startup grants

• How do I apply for a grant?

  You will usually have to apply online for a grant. Before navigating to the website and clicking the apply button, make sure you have the necessary documents and information on hand.

• What will I need to apply for a grant?

  While it can differ between specific grants, you will usually need to provide:

  • A detailed description of your project and business
  • A business plan or project plan outlining any costs in full
  • An in-depth explanation of the benefits of your project or startup idea
  • Details of your own work experience and background on any key employees

• How are grant applications reviewed and judged?

  Reviews of grant applications are usually carried out by considering the following factors:

  • Need for the grant in question
  • Significance, approach and innovation of your business or project
  • Assessment of your expertise

• Will I need to pay taxes if I receive a grant?

  In most cases, startup grants are considered income for your business, so you will have to pay taxes on the money you receive. Check with an accountant before you file your business taxes to determine whether your specific grant is considered taxable income.

• Do I need to be the owner of the business to apply for startup grants?

  It depends. Some grants that cater towards minorities, women and people with disabilities will require that the business is owned and operated by one of the listed groups, but someone else could potentially complete the application. Check the rules of the grant application to be sure.

• Are there grants for larger businesses?

  Yes, but larger businesses generally won’t be considered startups and may have different eligibility requirements.

• Why are most grant applications rejected?

  Many applications for startup grants are rejected due to the following factors:

  • The research, work of the company or specific project is not relevant to the grant in question.
  • Not located in the specific province or territory to be eligible for the grant.
  • Funds are not matched by the business (if applicable).
  • Applicants fail to communicate the relevance of their ideas or projects.
  • The proposal is unclear or poorly written.