Government grants and other sources of ‘free’ money are some of the best kept secrets in our startup ecosystem. But they shouldn’t be secrets at all! Here are our top six funding programs designed to help founders get off the ground:

Number 6: Strategic Community Entrepreneurship Projects Program

Funded by the Ontario Ministry of Economic Development, this program provides grants to Ontario residents between the ages of 18 and 29 who are not eligible to apply to other Ontario self-employment programs. The grant provides mentoring and business coaching opportunities for young entrepreneurs, with the potential to receive a $3,000 grant to start a business. Although the funding ceiling is low, this program could be a valuable resource for young entrepreneurs with limited financing options. For more information and where to apply, see http://www.ontario.ca/business-and-economy/start-business-young-adults.

Number 5: SmartStart Seed Fund

Co-funded by the federal government and the government of Ontario, SmartStart is designed to provide seed funding and support for entrepreneurs. Applicants are eligible for a non-repayable grant of up to $70,000 per start-up (payable towards direct eligible costs), and up to $7,500 in skills training and professional advisory services. Candidates must be endorsed by an academic-linked accelerator or a Regional Innovation Centre (such as MaRS). Companies are not eligible if they have already received funding from OCE or any FedDev programs. See http://www.oce-ontario.org/programs/entrepreneurship-programs/smartstart-seed-fund.

Number 4: IRAP

The National Research Council of Canada’s Industrial Research Assistance Program (IRAP) provides financial support to qualified small and medium-sized enterprises in Canada seeking to undertake technological innovation. Applicants must already be incorporated, have fewer than 500 employees and have an objective to grow and generate profit through the development and commercialization of innovative, technology-driven products, services or processes in Canada. Grants are awarded on a discretionary basis, in some cases in amounts of up to $50,000. We understand from speaking with past applicants that IRAP covers salary expenses that have already been accrued and, as a result, companies will often need to have had up-front funding to pay employees prior to applying. Candidates must submit a business plan and undergo an assessment. Prior to entering a financial commitment with an applicant, IRAP evaluates both the applicant company and project through a consultation with one of its Industrial Technology Advisors located across Canada. IRAP also provides mentorship and other resources. See http://www.nrc-cnrc.gc.ca/eng/irap/services/financial_assistance.html.

Number 3: Futurepreneur Canada

Futurepreneur Canada has partnered with the Business Development Bank of Canada (BDC) to provide collateral-free loans to young Canadians (between 18-39) at better interest rates than most banks. In addition to the loan, successful applicants will also receive industry-leading mentoring for two years that can offer expertise, resources and skill-building opportunities. Loans are available to a broad range of applicants, with specific eligibility requirements for each category, including: (1) applicants in the non-profit sector; (2) applicants that are currently students; (3) applicants new to Canada without credit history; (4) applicants that are in or recently served in the Canadian Forces; and (5) applicants who are able to demonstrate innovation in their industry. Entrepreneurs aged 18-34 are eligible to receive a collateral-free loan up to $15,000 from Futurepreneur and up to $30,000 from BDC. The terms of the loans vary between those offered by Futurepreneur and BDC, with both only requiring interest payments in the first year. Entrepreneurs aged 35-49 also apply through Futurepreneur for a loan up to $45,000, but the financing terms and conditions of any loan that is approved are from BDC. For more information on the loan opportunities for each of the applicant categories listed above and how to apply, see: http://www.futurpreneur.ca/en/get-started/financing-and-mentoring/.

Number 2: FedDev – Investing in Business Innovation Program

The Federal Economic Development Agency for Southern Ontario (FedDev) provides innovative small business start-ups with funding to develop the commercialization of new products, processes and practices. The program was designed to support early-stage businesses undertaking activities related to late-stage development and early-stage commercialization of innovative and unique products and processes related to: business development, product development related to market diversification and growth, customer development and developing marketing and distribution strategies. Successful applicants can receive up to $1 million in a repayable interest-free loan if they have 50 employees or less, are located in Southern Ontario and have secured an investment worth 66.6% of eligible costs from another specified source (either accredited angel investors or venture capital providers who are members of Canada’s Venture Capital and Private Equity Association (CVCA)). The outside investment must be evidenced by a signed term sheet that accompanies the application. Repayment of the government contribution will be expected to commence as soon as reasonably possible, but will begin no later than one year following completion of the project, which itself is expected to be completed within two years. For more information and where to apply, see http://www.feddevontario.gc.ca/eic/site/723.nsf/eng/h_00324.html.

Number 1: SR&ED – Scientific Research and Experimental Development Tax Incentive Program

Administered by the Canada Revenue Agency, SR&ED is designed to support Canadian companies carrying out research and development in Canada. It is the largest single source of federal government support for industrial research and development. The program gives claimants cash refunds and/or tax credits for expenditures on eligible work done in Canada. It allows successful applicants to deduct scientific research and experimental development expenditures from income for tax purposes, and it provides an Investment Tax Credit (“ITC”) which can be used to reduce tax payable. A Canadian-controlled private corporation can earn a refundable ITC of 35% on qualified expenditures up to a maximum of $3 million. Other corporations, individuals and trusts can also earn a non-refundable ITC of 15% on qualified expenditures. This program is particularly attractive because it doesn’t discriminate against particular industries, or applicants, and is widely available across the country. For more information and to see if you qualify, see: www.cra-arc.gc.ca/txcrdt/sred-rsde/menu-eng.html.

Liam Tracey-Raymont