Does your business have the capital to expand internationally? If not, how easily can you get it?
While traditional banks are an obvious place to start for loans and financing, financing projects in foreign countries is often seen as too risky by these institutions.
Export- and small business-focused financial and advisory organizations generally have a bigger risk appetite when it comes to investing in foreign activities—Export Development Canada (EDC), the Business Development Bank of Canada and the Canadian Trade Commissioner Service (TCS) in particular can offer financial support.
EDC offers direct loans to small businesses, along with a variety of other financing options:
The Can Export Program, run by TCS, offers grants to SMEs registered in Canada for a range of exporting activities, especially those companies interested in high-growth emerging markets:
“Can Export has been a very popular program. It’s a great way to reduce the risks of going into a new market. We take great pride in making that a really streamlined and quick application process. So companies can get a response really quickly, about whether or not their application is successful. And even if it’s not successfully initially, we can tell them why and what we might need to do to make the application successful.” – Duane McMullen, Director General of Trade Operations at Global Affairs Canada
The Business Development Bank of Canada offers financing from $250,000 to $35 million for a wide breadth of business needs:
Government Grants and Tax Incentives
Funding Databases and Advisory Services
As a part of the Canada Business Network, Canada Business Ontario provides SMEs with market research, exporting assistance, and information on financing and government grant opportunities.
A federal government database that directs companies towards funding and business growth assistance services.
This service provides consulting services to SMEs on business planning, retention, expansion, financial assistance, exporting and other facets of operations.
Funding goes towards marketing expenses: trade shows, marketing tools, market research, international project bids.
The program provides up to 50 per cent of project expenses.
Technology Commercialization Organizations
Ontario Centres of Excellence is a research-to-commercialization organization that works with Ontario colleges and universities.
The organization offers a variety of programs.
Part of the Ontario Network of Entrepreneurs (ONE), which helps entrepreneurs accelerate and/or commercialize their technology.
An organization that builds partnerships between academia and business to create innovative products.
Technology Grants and Tax Credits
This program, commonly called “Shred”, provides tax credits or refunds for research and development activities. Firms can claim 15-35 per cent of eligible expenditures.
Qualifying businesses can claim an 8 per cent refundable tax credit for qualified expenditures on scientific research and experimental development performed in Ontario.
Eligible corporations can claim a 20 per cent refundable tax credit for qualified expenditures on scientific research and experimental development work performed in Ontario under contract with eligible research institutes.
IRAP assists firms to develop, adopt and adapt technologies and incorporate them into competitive products and services to be commercialized in the global marketplace; through advisory services, funding, networking and linkages, and Youth Employment Programs.
80 per cent funding for research and development (workforce), 50 per cent (for consulting).
The grant supports short term R&D projects to solve a problem specific to the company. The company and the researcher must not have worked together before. Project funding, up to a maximum of $25,000, is paid to the researchers for the six month duration of the project. The partnering company must be involved in the project and provide in-kind support. Any IP developed during the project belongs to the company.
This federal program purchases and tests products and services before taking them to the marketplace (up to $500,000/up to $1,000,000 for military technologies). The government sells your products, but you maintain control of your IP. Geared towards environment, safety and security, health, and enabling technologies.
Run through the Industrial Technologies Office, projects funded through this program are expected to be the basis for the next generation of manufacturing, technical capabilities and services in Canada, and to generate material economic benefits for Canada in the longer term.
Non-repayable contributions are available supporting 50 per cent of total eligible project costs, up to a maximum of $54 million per project.
Run through the Industrial Technologies Office, this program provides aerospace and defence industries with repayable contributions for strategic R & D projects: covers up to 40 per cent of project’s total eligible costs, no minimum or maximum level of funding, nor a maximum limit on how much a company can apply to receive through SADI.
STDP is responsible for developing space technologies required to support future Canadian space missions, and strengthening the Canadian space sector through industrial capacity building efforts.
For the contracting component of the program, STDP is responsible for providing financial and technical support to Canadian organizations (Industry, Academia, and Not-For-Profit) to perform R&D related to Mission Enabling and Generic Space Technologies.
This program provides funding to bridge private sector investment in start-up businesses (under 50 employees). Firms require angel or venture capital funding for two thirds of the project; support is available for the remaining one third of project costs as a loan (up to $1 million).
Loans of $15,000 are available to start business for individuals age 18 to 39. Those who qualify can also apply for an additional $30,000.
Growing Forward 2 (GF2) aims to grow profits, expand markets and manage risk in the agri-food industry to both start-up and established businesses.
The Agri-Innovation Program makes two types of investments: those targeted at research and development activities that bring innovation to the sector; and those that help industry bring the results of research and development to market through adoption/commercialization. This is a five-year program ending on March 31, 2018.
There are two streams of funding available:
Energy Efficiency Incentives and Cleantech Funding
A grant fund to promote development and commercialization of technologies to improve electrical conservation. Funds for all project categories are up to 75 per cent (max $500k), apart from the Strategic Opportunities Stream, which is 50 per cent (for a max of $1 million).
This program helps manufacturers improve the energy efficiency of their operations.
Grant funding to support late stage development and pre-commercial demonstration of clean technology solutions to issues of climate change: clear air, water, soil.
This program supports manufacturers across Ontario with matching grants (50:50) up to $200,000 for capital investment projects that reduce emissions, implement energy efficient technologies and best practices through process and/or product improvement.
Automotive Manufacturing Funding
Small and medium-sized automotive suppliers, or large companies partnering with small or medium-sized automotive suppliers, can apply for to up to $100,000 in project funding, which must be matched 1:1 by industry funds and contribute to the adoption of industry-leading processes and IT solutions that result in gains in efficiency measures. Projects can be up to two years in duration.
Rural Business Funding
This program provides loans for businesses in rural communities: up to $250,000 for equipment, inventory and working capital.
A refundable tax credit for businesses that employ post-secondary students enrolled in a qualifying program. The maximum credit is $3,000 per placement.
Funding for employers to offer post-secondary graduates opportunities to obtain career-related work experience.
Work-Sharing is an adjustment program designed to help employers and workers avoid temporary layoffs when there is a reduction in the normal level of business activity. Work-Sharing Agreements must be agreed upon by both employee and employer representatives, and approved by Service Canada.
This program helps small business (less than 50 employees) to create jobs for students during the summer months. The application period is in January.
Ontario Ministry of Advanced Education and Skill Development – Summer Jobs Service Program
A $2-per-hour-per-student hiring incentive is available for eligible Ontario employers to create summer job placements for students between age 15 to 30 who are returning to school.
This program connects young people facing barriers with employers.
This service connects prospective employees and employers.
Employee Training Funding
This program funds employee training, up to $10,000 per employee. Employers are required to contribute one-third of total costs.
This program offers employee training support for manufacturing SMEs, contributing up to 50 percent of eligible project costs to a maximum of $50,000 per business. Previous recipients are eligible for up to 25 per cent of project costs.
The apprenticeship training tax credit is a refundable tax credit, available for employers who hire and train skilled trade apprentices. The tax credit is based on the salary of the apprentice, and eligible businesses can claim 25 to 30 per cent of expenditures, or up to $5,000 per years for three years.
The Apprenticeship Completion Bonus is a taxable grant of $1000 to employers or sponsors whose apprentices complete an apprenticeship program in any trade.
Job Creation Tax Credits
This federal program provides eligible employers with a non-refundable tax credit equal to 10 per cent of apprentice salaries. The maximum credit an employer can claim is $2000 per year for each apprentice.
This program provides up to 15 per cent in grants for job creation and investment: $500,000 per 10 jobs created.
Product Commercialization Funding
This program provides loans of $150,000 to $500,000 to support growth activities: late stage commercialization; new product or service development; new applications or market development, implementation of new processes or technologies.
This program provides loans from any chartered bank for companies with less than $10 million in revenues for capital acquisition: up to $350,000 available, $1 million available for real estate.
This program assists existing southern Ontario businesses to adopt new technologies that have the potential to improve productivity and expand their operations: 25 per cent repayable contribution, 0 per cent interest, flexible repayment terms.
3 streams: New Economy Stream, Food and Beverage Growth Fund and Strategic Partnerships Stream.
The minimum project size is $5 million for Food and Beverage Growth, $10 million for New Economy Stream and Strategic Partnership Stream.