In our first blog about accessing Canadian Government Funding for your business, we talked about the specifics of grants and loans, how they work, and which one might be right for you. But there’s a whole lot more you need to do before that money might land in your hands, and convincing the funders that you’re a good risk is one of the most important steps on which you can concentrate.
Truly, anyone can fill out the paperwork that asks for funding from the Canadian government, so it’s extra important that you stand out from the crowd, so to speak. Thousands and thousands of would-be businesses apply for funding each year, which means that not everyone will receive it. In actuality, only a small percentage of those who apply are fortunate enough to garner a loan or grant, which is why you need to stack the blocks in your favor even before you take pencil to paper.
Make an appearance
Your funding proposal, of course, is going to be the document that sells your idea. Keep in mind that those charged with the task of who gets funding and who doesn’t read dozens of these proposals each week, so you need to determine a way for yours to stand out. Your proposal must be memorable…and so should you.
One way to make your proposal jump out of the pack is to make a face-to-face appointment with the local office of the department or agency to which you are applying. In other words, help those who make the decisions get to know you, even if your meeting is brief. By creating personal contact, when your proposal eventually lands on someone’s desk, that someone will be expecting it, will know something about you, and can put a face with a name. A business plan is just a bunch of words but a good first impression is worth its weight in gold.
Eligibility criteria vs assessment criteria
If you’re ready to write a proposal, chances are you’ve done some homework and know that you are eligible for the loan or grant for which you are applying. The departments or agencies in question widely publicize their eligibility criteria so it isn’t difficult to figure out whether or not your application will even be considered.
However, you may not have any information on how your application is assessed, which is information that could make all the difference as to whether or not you get your funding. So, what is it that elected officials are looking for when they read your presentation?
- Adverse competitive impact – Did you know that the governing officials who are reviewing these applications look at each to determine your business’s potential for having an adverse impact on an already existing business? It’s true. They don’t want to approve a loan or grant if opening your business can put another local company out of business.
- Net economic benefits – Will your company be bringing new jobs to the local labour market and infusing more cash into the community? Is it doing this at the expense of someone else’s business? These two questions will be asked and if it’s determined that your business will provide net economic benefits to the community, you will have a better chance of getting that grant or loan.
- Economic viability – As they read your proposal, reviewers want to know that you are a good risk. In other words, will your business be profitable? This is why it’s important to include well-crafted sales projections, preferably based on industry standards. These should be accurate and not inflated. In addition, those considering the application will look at you as the potential owner and want to know if your expertise in the field of the business your proposing is enough to make you a strong owner. For example, if you want to open a gym, you should demonstrate knowledge and experience in subjects like exercise science or personal training. A credit check may be done as well, to make sure you are in sound financial condition.
- Sustainable jobs – Your proposal needs to show not only how your business will create jobs but also how you will generate enough income to sustain those jobs once your government loan or grant is gone. They want to know that these jobs are permanent. Your financial statements and sales projections should help with this and need to show that your company will have a significant positive impact on the local economy.
These guidelines should set you on your way to writing a viable proposal for government funding, one that will hopefully result in an affirmative response from the Canadian government department or agency to which you are applying.
Of course, these loans and grants also have tax implications and can otherwise affect the way you handle money. If you need assistance in figuring out the specifics of accepting government funds, we can help.
At Soleimani Accounting, we specialize in providing professional accounting services for small businesses and corporations, including those just getting started. For a free 30-minute consultation, call us at 604-781-2412.