Federal financing for small businesses in Canada
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Federal financing for
small business Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...
es in Canada is facilitated via a number of programs and agencies. Financing is available in the form of
grants Grant or Grants may refer to: Places *Grant County (disambiguation) Australia * Grant, Queensland, a locality in the Barcaldine Region, Queensland, Australia United Kingdom *Castle Grant United States * Grant, Alabama *Grant, Inyo County, C ...
(sometimes called "non-repayable contributions"), loans, loan guarantees, income support and subsidized hiring and/or training programs. The government also provides funding for no-cost or subsidized services to small businesses, including workshops, business plan consulting, education, and federally sponsored trade missions. Financing, and federally funded or subsidized services are available both to established businesses looking to grow or expand into new markets and to entrepreneurs seeking to launch a new business.


Definitions

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Grants Grant or Grants may refer to: Places *Grant County (disambiguation) Australia * Grant, Queensland, a locality in the Barcaldine Region, Queensland, Australia United Kingdom *Castle Grant United States * Grant, Alabama *Grant, Inyo County, C ...
– Grants or "non-repayable contributions" are the funding that does not need to be paid back. *Loans – Loans may be low- or no-interest contributions. Financing methods and repayment requirements vary from conventional loan arrangements to situations in which the business fronts the costs, submits the costs to the agency, receives reimbursement for all or a portion of the costs, and then at a pre-determined date, the business begins to pay back the loan. Unlike most bank loans to small businesses, government loans may be unsecured. *Loan guarantees – Under the Canadian Small Business Financing Act,"Canada Small Business Financing Act (S.C. 1998, c. 36)"
Justice Laws Website. Retrieved March 27, 2013. the federal government may guarantee a financial institution's loan to a small business, to a maximum of 85 percent. If the borrower defaults on a loan, the bank is protected, and therefore more apt to offer small businesses financing. *Income support – Various programs provide income support to entrepreneurs for fixed periods, often up to a year, so that they are not required to work or seek work while starting their businesses. * Subsidies for hiring and training – In order to increase
employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
and to create qualified workers, the federal government funds a number of programs that allow employers to hire and/or train youth, unemployed individuals, and other target groups. *Facilities subsidies – In some cases, facility rental and/or utilities may be subsidized for the small business *
Equity financing In finance, equity is ownership of assets that may have debts or other Liability (financial accounting), liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets. For exampl ...
– The government may invest in a small business, with the advantage of less stringent demands than those of venture capitalists or other private investors. * Tax refunds or tax credits – Tax refunds and credits vary by industry and region.


Funding Sources

Funding and supportive services are administered by a variety of central, provincial, regional and local offices, including federal government departments, federal government agencies, non-profit corporations, financial institutions and chartered banks. Programs may be targeted by industry, region, or other criteria, such as programs for young entrepreneurs or
Aboriginal Aborigine, aborigine or aboriginal may refer to: *Aborigines (mythology), in Roman mythology * Indigenous peoples, general term for ethnic groups who are the earliest known inhabitants of an area *One of several groups of indigenous peoples, see ...
entrepreneurs. Application requirements for federal grants and loans programs vary, but often include at minimum a completed business plan. *The Business Guide to Government Programs *
Community Futures The Community Futures Network of Canada is an extensive network of 269 community futures development corporations. The national Community Futures Program is administered by four regional development agencies, the Atlantic Canada Opportunities Agenc ...
Development Corporations * Western Economic Diversification Canada * Atlantic Canada Opportunities Agency *
Human Resources and Social Development Canada Employment and Social Development Canada (ESDC; french: Emploi et Développement social Canada; french: EDSC, label=none)''Employment and Social Development Canada'' is the applied title under the Federal Identity Program; the legal title is Dep ...
*The Business Development Bank of Canada *The Canada Small Business Financing Program


References

{{DEFAULTSORT:Federal Financing For Small Businesses In Canada Finance in Canada Small business