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Episode 13 – Finding Capital through Government Funding
Ian: : Welcome to the Business Coach Podcast, an advice-oriented series for Canadian entrepreneurs. I’m Ian Portsmouth, Editor of PROFIT Magazine and I’ll be your host as we tackle the hot issues and opportunities facing Canada’s small businesses. We’ve developed this podcast in cooperation with BMO Bank of Montreal. Over the course of the series I’ll be drawing on experts in a number of fields including some BMO experts in order to provide the credible information and prescription you need to run your small business better.
As every small business owner knows, capital is the life blood of a company. And just about every small business owner could use more capital to help them fund such critical things as innovation, inventory, capital improvements and general expansion. But given all the struggles that private companies say they have with raising adequate financing, you might be surprised to learn that there are millions and millions of dollars available to Canadian businesses free of charge and just for the asking.
I am referring of course to government grants and tax credits. Joining me to help us explore these under-appreciated sources of capital is James Perly, a Toronto-based government funding consultant. James welcome to the Business Coach.
James: Thanks Ian, glad to be here.
Ian: : So James, tell us, how much of this government grant and tax credit money is out there?
James: Oh, Ian, the federal government gives out over 3 billion dollars a year.
Ian: : That’s an astounding figure. Has that come down much in recent years, because I’m thinking, we’re all aware of government cut backs and a lot of people may think that there is no tax credit and grant money out there?
James: Really that’s money, you know, designed to stimulate the economy, so really, if anything, governments have actually been widening, kind of, the net that companies can qualify for as well as upping the amount. The government recognizes that really, you know, and it’s primarily in the creation of intellectual property, it’s going to be the future of Canada. So what you get is the vast majority of these funds are really targeted one way or another to stimulate research and development.
Ian: : So, who might qualify for these tax credits and grants?
James: Basically, you know, if you have engineers or computer scientists on staff, these is a high likelihood that you will qualify for something. A lot of these programs do give more if you’re, what they consider, a smaller business. You have, say, less than 300 dollars in taxable income with less than 500 employees. But it does not mean the big guys don’t qualify, they’ll just get less support.
Ian: : And what if I’m in Agriculture or Distribution or Retail, am I shut out or are there programs available to me depending on my industry and perhaps, of course, where I might be located in the country?
James: Sales type businesses are actually the ones that get the least amount of support so, really, you know, Distribution or Sales companies. agriculture is one of those special areas, kind of like, you know, books or movies where frequently, you’ll either have a federal, or quite often you will have provincial programs that are specific to that industry. Really, you have two large federal programs that cut across all industries, which are the SRNED and the IRAP programs.
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