Small business grant programs can make a world of difference for a new small business owner. Not only do they provide a vital injection of funds, but they can also help to establish connections in your industry and build buzz around your product.
If you plan on investing the time and energy into applying to a small business grant program, it’s important to understand the options available and pick the grant that’s right for your business.
In this article, you will learn about 4 government grants and tax credits that your business may be eligible for:
Canadian Digital Adoption Program
The Canada Digital Adoption Plan (CDAP) is a Federal Government initiative which is intended to help small and medium-sized businesses boost their e-commerce presence, and run their businesses more effectively through digital technology.
The CDAP aims to accomplish this goal by providing $4 billion dollars in total funding to small and medium-sized businesses who want to adopt new digital technologies.
Who is eligible?
The Government of Canada has outlined four mandatory criteria for eligible applicants to apply for The Boost Your Business Technology grant:
- Incorporated at the national or provincial level; or be a Canadian resident sole proprietor.
- Privately-owned for-profit entity
- Maximum full-time employees of less than 500
- Not more than 100 million or less than 500,000 in revenue in the last 3 tax years.
This program consists of two grant streams as following:
This stream is for SMEs with $500,000.00 or more in gross revenues during any one of the previous three tax years. With this grant, you will have the resources to hire and work with an accredited digital advisor to help you craft a tailored digital plan.
This stream is for SMEs with less than $500,000.00 in revenue. It provides such applicants with a “micro-grant” of $2,400.00 to help cover costs relating to the adoption of digital technologies. This stream does not provide any additional funding to cover the cost of developing a Digital Action Plan”.
The Scientific Research and Experimental Development (SR&ED)
Companies of any size that invest in research and development (R&D) in Canada can take advantage of the Scientific Research and Experimental Development (SR&ED) tax incentive program, Canada’s largest R&D program.
Types of SR&ED tax incentives
- Basic research
- Applied research
- Experimental development
These tax incentives come in two forms:
- Income tax deduction
- Investment tax credit, which may be applied against income taxes payable in the current year, in a prior year, or may be carried forward to a future year. In some cases, the credit may be refundable.
Who is eligible?
- Canadian-controlled private corporations (CCPC)
- Other private corporations
- Individuals and trusts, and
- Members of partnerships
Eligible R&D Projects
- Address a technological or scientific uncertainty
- Address, or attempt to address, a technological advancement, and
- Use a systematic investigation or search
NOTE: Foreign companies can apply for the Canadian SR&ED tax incentives indirectly by forming a Canadian subsidiary company to perform eligible R&D work in Canada for itself or on a contractual basis on behalf of the parent company.
The Innovative Solution Canada Program
This program is the Government of Canada’s initiative to partner with eligible Canadian small businesses and facilitate the early development, testing and validation of prototypes, as well as preparing a pathway to commercialization.
The program’s Challenge Stream and Testing Stream help startups and small/medium-sized businesses (SMEs) overcome technology testing and development hurdles so that they can produce globally-demanded products and services, while also improving government operations.
Here’s what you need to know:
- If your idea is selected, you could receive funding to develop a proof of feasibility.
- If your proof of feasibility is approved, you could receive funding to develop a prototype.
- If the developed innovation solves the Government of Canada’s challenge, we could be your first buyer.
- Funding amounts are identified in each individual challenge.
Amount of funding
Innovative Solutions Canada is structured around a graduated, three-phase process:
- Proof of Concept: Proving scientific and technical feasibility, and commercial potential, of an idea that addresses a public-sector challenge. Eligible applicants may receive up to $150,000 in Canadian government grants to offset up to six months of project expenses.
- Prototype Development: Developing a prototype based on the proof of concept in Phase 1. Eligible applicants may receive up to $2 million in Canadian government grants to offset up to two years of project expenses.
- Pathway to Commercialization: Should a Phase 2 prototype suit the needs of a government department, they may procure it from a business and become the innovation’s first purchase. There is no maximum to the amount of funds awarded through these contracts.
Who is eligible?
To participate in the Innovative Solutions Canada program, companies must:
- Be for-profit and privately held;
- Be incorporated in Canada (federally or provincially);
- Have a head office in Canada;
- Have 499 or fewer full time equivalent (FTE) employees;
- Pay at least 50% of annual wages, salaries, and fees to employees and contractors who spend a majority of their time working in Canada;
- Have 50% or more of their full-time employees located as their ordinary place of work in Canada; and
- Have 50% or more of its senior executives (Vice President and above) with their principal residence in Canada.
Search and Rescue New Initiatives Funds
The Public Safety Canada has launched its Search and Rescue New Initiatives Funds to enhance the effectiveness, efficiency, economy, and innovation of search and rescue activities as it relates to the response and prevention objectives of the national search and rescue program.
The Search and Rescue New Initiatives Fund (SAR NIF) contributes financially towards projects that improve and enhance the objectives of the national search and rescue program.
Amount of funding
The annual SAR NIF budget is $7.6M. With multi-year projects ongoing the availability of funds for new projects will vary from year to year.
To achieve this, SAR NIF funding is provided for projects that:
- Enhance the effectiveness of SAR response in federal, provincial and territorial jurisdictions;
- Promote the sharing of response and prevention best practices throughout the SAR community; and,
- Promote and improve SAR prevention.
- Provincial and territorial governments, for profit and not-for-profit Canadian organizations and volunteer associations, and academia are eligible to apply to SAR NIF.
- Those applying for SAR NIF funding must meet the following requirements in order for their application to be considered for funding:
- Be an eligible recipient;
- Have a minimum of 5% of in-kind and/or cash contributions as confirmed by the source;
- Complete SAR NIF Application for Funding, including the Project Budget, and Project Work Plan.
Accelerate your business’s growth with small business grants
If your business has the potential to innovate your industry and build or utilize new technologies to serve the public good, chances are you’re a great candidate for a small business grant.
If you need additional support in determining the right grant and financial support programs for your business and apply for them, get in touch with us here.