Government Funding For Retail Businesses
If you’ve decided to get into the retail space with your own business idea or an existing retail shop takeover there are a number of programs specifically focusing on governmetn funding for retail businesses.
When you are starting you or if you’re looking to expand your retail business, finding the right funding can be crucial for your business.
The funds available can be used towards a number of things such as just starting our or expanding, to help you with operational costs, inventory, marketing and staffing needs.
Our guide to finding and using government funding for retail business will help you narrow down your options and help you get funding for your business.
Government Funding For Retail Businesses
Finding the right funding for your small business, be it retail or not, can help ensure your success for years to come.
In this article we will be discussing the following:
- How can government funding help your retail business
- Different types of funding options available
- How to chose the best funding option for your retail business
- Expenses to consider when starting or purchasing a retail business
- Which retail businesses can get government funding
How can government funding help your retail business?
If you are successful at obtaining governmetn funding for your retail business, there are a number of ways that you as the business onwer an benefit
Depending on if you are starting the business on your own or if you’ve decided to purchase an existing business or to expand, funds available can help you do both in a different way.
Generally speaking, when you are able to find government funding for your retail business, there are a number of uses that you could apply the funds towards, including:
- Purchase of property: If your intentions are to purchase a business and it’s property, or if you have an existing business and want to expand your location, funding that can be used towards the purchase of the business and property can go a long way in ensuring your success and lower costs of “rent”.
- Improving cash flow: Cash flow is important especially when you’re starting up. Cash flow can ensure that you have the funds coming in so that you can invest into other parts of the business to make it a greater success. Obtaining government funding to help you with cash flow can help you during the slow months, seasonal changes within the business as well to keep cash in the business for emergencies or anything unexpected.
- Purchasing inventory: When seeking government funding for retail businesses, the majority of business owners often start with asking for costs to cover the purchase of inventory. What is a retail shop with no inventory, and obtaining the funding to pay to keep the shelves stocked, is critical to your success.
- Paying for equipment: Equipment is important to the success of a retail business. You may not consider how many purchase you need to make that are considered equipment, but there are many! Anything from cash register, software to use, shelving, freezers, computers, television screen, security camera..etc; this is all equipment. Obtaining funds to help you with some of these costs can help you decrease your own personal spend.
- Paying for your staff and wages: In any business, the cost of wages of yourself and your staff can often eat at the businesses bottom line. While this is a necessary cost to keep your business running, you may be able to obtain governmetn funding for your retail business that can help with the wages.
- Investing in promotion: Once you’re all set up, marketing the business is a big thing. Starting with your website, online and offline promotion, every dollar counts when trying to direct more traffic or visitors to your website and retail store. Getting help from various government funding programs can assist you in your marketing spend.
Different types of funding options available
While “government funding” is a type of funding available for a retail business to opt for, even governmetn funding can be broken down into the different types and options available.
The different types of government funding options are broken down into the following:
- Grants
- Government loans
- Tax breaks and Tax Credits
Each government funding type has it’s own advantages and disadvantages but all are ultimately created to help small businesses get funding.
Let’s take a deeper look at each of the funding program types and how to apply for them!
Government Grant Programs
Who wouldn’t love a grant for their business!
Government grants are programs offered by the Canadian government which are generally refereed to as “the money that you don’t have to pay back”.
The pro’s of government grant programs is that they are in most cases non repayable and is an excellent way for a startup to get the financial help to launch on the right food.
However for small business owners looking to get funding, there are more con’s when it comes to government grants.
#1. Government grants are very difficult to obtain (in comparison to other government finding programs)
#2. Government grants are provided for specific needs
#3. In many cases, to get a government grants (non repayable one), you have to match the funds!
#4. A secret, small business killer!
Let’s take a look at these a bit more.
#1. Government grants are very difficult to obtain (in comparison to other government finding programs)
When comparing government grant programs to any government loan or tax break, they are by far more difficult to obtain.
In most cases if a small business is trying to get funding, even though a government grant is the “most appealing”, it’s often the worst way to go.
That’s not to say not to try – you should try, but keep in mind that if no grants popup, move on quick on to other options.
#2. Government grants are provided for specific needs
Government grants aren’t for everything. In fact, majority of the government grants provided end up being for specifics needs such as to hire staff, training programs, going green, energy, medical research..etc
Sadly, most people starting a business don’t need funds for that but need funds to startup, to pay for equipment/tools, rent, website development, marketing – and these are most of the time not covered by a government loan.
Another way to look at what government grants can be used for is to consider this question – “Will these funds help the economy in any way?” – and no, helping you buy a Tesla car as a business expense is not haling the economy.
#3. In many cases, to get a government grants (non repayable one), you have to match the funds!
A government grant sounds amazing, but not when you have to match the funds in order to get it.
While there may be a few programs that are simply free money, most of the agencies providing the funds will want you to match it.
That’s only fair, don’t you think?
If you are counting only on government grants, this can become a major problem.
#4. A secret, small business killer!
It’s not really, but it can be – if you’re not careful.
Any small business owner trying to get funding for their business and one that is relying only on government grants as the primary source of the funds (without thinking of other options) is destined to fail.
Utilizing multiple avenues of government funding as mentioned above is your best bet towards funding your small business properly.
Government Loan Programs
Much like government grants, the government loan programs are another set of wonderful programs how a small business can get funding!
In fact, government loans are the most offered programs by the government and often are much easier to obtain than a government grant.
While a government loan and a bank loan are totally different, many people still scare of easily from the fact that it’s a “loan”.
The government of Canada has many different loan types from; low interest, no interest, conditionally repayable, government guaranteed loans..etc
Give one of our small business funding agents a call here and learn more about these programs 1-800-288-9691
Tax Break and Tax Credit Programs
A tax break or tax credit program is one of the most avoided offerings by the government. However, billions of dollars are provided each year to those who take advantage!
Why is it avoided you ask?
Well, a business that is trying to figure out how to get funding, needs funding NOW – and not later.
And when it comes to government tax breaks/credits, the funds come after you’ve already spent the funds – think about a tax refund. It’s the same thing.
If you can afford the initial spend on your business – no matter what, take advantage of the available tax breaks and tax credits.
How to chose the best funding option for your retail business?
As you can see, the different funding programs which can help your retail business are definitely there.
The next step, is deciding which programs to go for!
In most cases, the governmetn decides for you and they do this based on what is available
While there are a ton of different programs and options, not all programs are for everyone.
Each of these programs have various factors and criteria which a retail business must meet in order to be eligible. These often start with the bases:
- Do you have a business plan that explains the funding needs?
- Are you in the right industry?
- Does the program fund your specific needs?
- The amount you need, is it too much or tool little for the program?
- Do you meet all of the criteria set forth by the program?
While these depend from program to program, they are general factors that you have to consider when deciding which funding options are best for your business.
Expenses to consider when starting or purchasing a retail business
While you may “I have it all figured out”, you may not be aware of all of the costs associated with starting up or purchasing a retail small business. So let’s break down some of the costs involved and see if you need government funding for your retail business involvement.
If you’re starting a new retail business:
- Consider the costs or purchasing or leasing a retail location
- Costs of purchasing all of the equipment needed (this includes the shelving, freezes, cases, cash registers, computers, security cameras, lighting..etc)
- The costs of hiring and paying staff
- Associated costs of registering the business and the legal fees
- Cost of marketing and promoting the business
- Purchasing costs of the inventory and supplies needed (the merchandise)
- Paying the utilities and various on-going costs (insurance, phone, internet, power, water..etc)
If you are taking over an existing business, it may seem a bit simpler since these things are already present, but consider the following costs:
- The cost associated with acquisition of the business
- Rent or property costs
- Costs of purchasing inventory (new or existing)
- The costs of keeping staff or hiring new
- Continued marketing and advertising costs
- Costs of upgrade/renovation if needed
- The hidden costs of the previous business.
If you’ve got it all figured out and are confident in that you can cover the costs, you’re good to go. However if you consider the above mentioned funding needs which the govenrment funding programs can help you cover, perhaps finding suitable funding programs to help is a better route to take.
Which retail businesses can get government funding?
The ultimate question that comes up with mention of governmetn funding for retail businesses is, “can I get funding for my retail business”.
While there are many factors at play in determining who is eligible and who isn’t, the retail business category often focuses on the following business types:
- Grocery and convenience stores
- Electronics retailers
- Toy stores
- Pet stores
- Jewelry shops
- Book stores
- Sports store
- Clothing and accessory stores
- and pretty much any furniture, appliance, health store..etc
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