The grants that exist for a new business
Start-up grants do exist, but there are not many: they tend to be regional, or tied to a particular kind of project rather than to starting a business in general. Here are four examples, each checked on its official page:
- Strategic Investments Program: Nunavut Business Investment Fund: up to $250,000 for business investment in the territory.
- London Vacant Commercial Space Fit-Out Grant: up to $50,000 to bring an empty storefront back into use.
- PME MTL: Funds for Retail businesses: up to $25,000 for a Montreal retail business.
- Support for Entrepreneurs and Economic Development (SEED): Entrepreneur Support in the Northwest Territories: up to $25,000.
Each of these programs serves a place with a clear goal: filling an empty storefront, building a retail street, or growing a territory's economy. So the best way to find a start-up grant is to ask what your own city and province are trying to encourage right now.
Loans: where most start-up money is
The larger and more widely available start-up money is credit. Many Canadian businesses start with borrowed money, and some of these programs publish terms a normal commercial loan does not, such as the interest cap on the Canada Small Business Financing Program.
- Canada Small Business Financing Program: backs loans up to $1.15 million, arranged through your own bank rather than a government office. Designed for equipment, leasehold improvements and property.
- BDC Financing: Start-up: up to $150,000, including franchise fees and marketing, once the business has at least 12 months of operating history and revenue, so it is a year-two option.
- Futurpreneur Canada Side Hustle: up to $25,000 for a business you are starting while still employed, which is how many businesses begin.
- The Community Futures Network of Canada lends across rural and small-town Canada through local offices, with limits that vary by province: Community Futures British Columbia lends up to $1,000,000, and Community Futures Alberta lends up to $150,000 through its Financial Supports program.
Programs for specific founders
A meaningful share of start-up funding is set aside for particular groups of owners: Indigenous entrepreneurs, women, young founders, entrepreneurs with disabilities, newcomers. If you belong to one of these groups, check this money before anything else.
What the money will and will not cover
A common problem is a mismatch between what a new owner wants to spend on and what the program funds. A few rules that hold across most programs:
- Work already started is usually ineligible. Approval comes first, purchase comes second. Signing a contract before you are approved disqualifies you from most grants.
- Cost-sharing is normal. Many grants pay back a share of the cost, often around half, after the work is done and inspected, so you need to pay the full cost first.
- Day-to-day running costs are rarely funded. Rent, wages and stock are what lending is for; grants tend to attach to a defined project with a beginning and an end.
Where to start
Start local. City and regional programs are where most start-up grants are, and they are the ones most likely to fund a storefront, a fit-out or signage. Then look at lending for the rest of the budget, and talk to your own bank about the Canada Small Business Financing Program, because your bank is where that application is made.
Check the closing date before you plan anything. Municipal budgets run out mid-year, and a program that is open in March may be fully committed by September.
Want the whole country on one page? See the startup funding map, province by province.