Dr. Wael Badawy, IntelliView Technologies Inc., Calgary, AB, firstname.lastname@example.org, CYBF Mentor
In Canada we are fortunate to have various government support programs for entrepreneurship, innovation and business creation. These programs are offered at the federal and provincial, level.
Funding program ranges:
Funding in higher range is more likely to require limitations on your business! These limitations could include restrictions on selling your business, financial decisions, markets you target and more.
Which government program is right for you? It depends on how much money do you need, how urgent you need the money and what you want to do with your business.
Loans are considered to be the least attractive approach for entrepreneur because they are a liability on the balance sheet and reduce the credit rating of the owner(s). When your business is successful, loan interest could be the lowest cost of finance. If your business is not growing in value, loans will be costly.
The Scientific Research and Experimental Development (SR&ED) Tax Incentive Program is a program that all entrepreneurs should know about. It allows you to recover a percentage of the money you spent. It takes between four weeks to eight months to access the fund depending on when you file your taxes, the size of your filing and the your company’s track record with the Canada Revenue Agency.
Provincial and federal grant programs are excellent vehicles for financing and do not create a liability on balance sheet. They demonstrate a level of confidence in your business as they usually have a level of due diligent process, and this facilitates future rounds of finance. When deciding to apply, it is important to consider the time you need to spend on the application and accessing the fund. Also look at the level of reporting required, time to disbursement of funds, any limitations that may be arise and slow the next level of business development and intellectual property restrictions.
Protection of intellectual property is an important aspect in business and some programs may require exposure that puts a company’s competitive advantage at risk. Programs offered by certain universities and institutions may require the publication of research and results and thus present a risk for entrepreneurs. I recommend accessing these funds only after your company is stable and has a large number of customers with a solid market share.
Government purchase programs can help you increase your sales and the value of your company with limited liability. However, it is very competitive and comprehensive applications are required (some companies spend $50K-$100K for professional consultants to write the proposal for them).
If you have questions about the suitability of a program for your business, please free feel to contact me at email@example.com.