What To Do With Government Grants

Government grants are funding program types that are offered by the Canadian government in order to help small business owners obtain funds to use towards their business.

These funds, once provided by the various levels of the government, can be used towards a number of needs a business owner may have. Generally speaking however, the government offers the government loans in order to create jobs, boost the economy, to support the community the business is in and to support entrepreneurship across the country.

Often misunderstood, government grants are generally considered free money options that small business owners can take on, with no concern for repayment. That being said, government grants can come in a number of different forms; including:

• One time and renewable grants
• Non repayable grants
• Partial contributions

Using the government grants can be beneficial to any small business that is eligible and able to obtain them. These funds can be used for a number of different purposes, which we will explain further in the article; but before we do, let’s discuss the different government grant options, to give you a better idea of what you may want, or need.

Different government grants

Most people hear the term “grant” and assume that these are funds that are simply given by the government – and while this is true, there are many different types of grants that should be made aware.

One time government grants are grant programs, often offered by the local, provincial and federal governments that help fund a businesses expenses which often require a time time contribution, thus the meaning “one-time”.

These grants are often focused on helping with a specific funding requirement a business may have; liek renovating a business location, to accommodate what the business needs. These renovation expenses are one time. 

Whereas the renewable government grants are grant options that a business may apply to multiple times, over and over if funds are needed. While it is not guaranteed that the funds of the grant program will be approved each time, a business may use these funds for expenses that they may have, which are reoccurring; such as: paying wages, providing staff training, energy and efficiency purposes..etc

Further that, the most popular programs are the non repayable government grants. These grant options are the most desired as they are non-repayable. 

What this means for a business is that the funds can be used and you as a small business owner don’t have to have a plan to repay the funds back. The government agency that provides you these non repayable grants hopes in return that you will achieve success with your business, create jobs, pay taxes..etc

Lastly we have the partial contribution grants. These grant program types are available, however are often ones that business owners shy away from – due to the fact that they often require a contribution from the business owner directly, in order to be eligible.

The partial contribution simply means that if you want to obtain this grant via the government agency, you as the business owner should be able to risk some funds as well and invest. This investment can range from as little as 10%, but can be as high as 85%.

Most startups and business owners need funding and often are asking for the funding as they lack the funds of their own and this makes the partial contributions difficult to obtain, or consider.

What can government grants be used for?

A great question and often one that has many confusing answers – so, let’s clear this up together.

Government grants can be used for a number of different purposes a small business may have. However, this is not very set in stone and not so straightforward where every business will have the same outcome. It is crucial to understand a few points:
Not all government grants are for everyone, or for every type of business

1. Government grants are in place to ensure that more than just your business benefits
2. To really understand what a grant is for and how the funds can be used, review the application and program requirements

To clarify; there are hundreds of government grants across the country. While these grant programs are often considered free money, not everyone is eligible; and not all funding needs can be covered.

Generally speaking, government grants focus on funding a business’s needs if their expenses align with the mission statement that the specific agency has in mind. It is crucial that you as the business owner review the application requirements and criteria before applying.

Government grant agencies are in place for a specific purpose and have a specific goal. These goals are often focused on whatever the mission statement they have is.

Some grant programs focus on the environment; while some focus on creating jobs and some focus on technology..etc; It is a good idea to follow these purposes in order to determine how to best use the funds, and how to actually get the funds.

Most grant programs will help cover the following costs that a business may have:

• Wage support ( money to pay yourself or your staff )
• Costs of training (to provide your staff with proper training skills for the job)
• Tools and equipment costs (especially if tied to a mission that a agency has in mind)
• Energy, going green and improving efficiency (especially if environment focused)
• Research and development costs
• Leasehold improvements and renovation costs

In addition to these funding uses; a government grant program may also help in certain situations with marketing costs, inventory, supplies, business acquisition and more.

To see all government grant options and to determine how you can benefit with the money you obtain, use the Funding Database to review your options.

Tips for government grants

Before you start the government grants application process; a few tips to guide you through the steps.

1. Always prepare your business plan beforehand. 
2. Ensure that your business plan is detailed and provides a breakdown of what you need funding for; and how much
3. Have your 3 year projections ready and be prepared to explain how the added government grant, or funding will be of help.
4. When you locate a grant program, ensure that you read the application and program requirements top to bottom. Look for a few key things:
   1. Does this grant program cover businesses in your location?
   2. Is the grant program right for businesses in your industry?
   3. The funding needs you have, can they be covered by this program?
   4. The amount of money you need; is it achievable

If you have covered the above; you are good to go and take the next step and apply for the grant programs.

Do keep in mind that alternative government funding options are also available, including government loans, guaranteed loans, tax breaks and credits; which also may be of help if used in combination with the government grants. See all government funding options in the Funding Database.