Capital is vital to starting your small business and helping it thrive. Which route is best to raise money for your small business — loans, grants or something else? In this blog, we share the different options available to you in Alberta and Canada.
Loans or debt financing involve borrowing money that you pay back with interest. There are a few programs that offer small businesses interest-free loans — we’ll cover some below.
Grants have specific criteria and require involved applications. Their advantage: you don’t have to offer anything in return or pay back grant money.
If you’re looking for small business loans or grants, you can do your own comprehensive searches both on the Government of Canada’s Business Benefits Finder and on Alberta’s website. We have listed some options that we thought were most relevant, including COVID-19 small business loans and grants.
You can also pursue equity financing, which involves raising money from funds, family members or friends in exchange for partial ownership of the business or a share of the profits and losses.
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VIDEO: Dil at True North Accounting shows you how to find loans and grants for small businesses in Canada.
How do I find small business grants in Alberta?
Small business grants are appealing because you don’t have to pay the money back or give up ownership in your company in return for funds. The money is yours once you get it.
You do, however, need to meet very specific criteria to qualify, and grants are highly competitive. Often you’ll have to spend some of your own money to get money in return.
If you’re looking for information on grants, Innovation Canada is a good place to start. Tell the form what you’re looking for and a few specifics about your business, and the website will do a search for applicable funding programs. Here are some relevant grants for Alberta small businesses:
Get a matching contribution of up to $15,000 per year to help manage income declines or to make investments to mitigate on-farm risks.
The AgriInnovation Program makes two types of investments: those targeted at research and development activities that bring innovation to the sector; and those that help industry bring the results of research and development to market through adoption/commercialization.
Alberta Innovates offers grants and funding aimed at “supporting the entire innovation spectrum — from the generation of new ideas through applied testing to commercialization or end-use.” There are a number of programs, including biotechnology, ecosystem services, and bringing digital technology to farms and food manufacturing. Learn more about Agriculture, Forestry & Food programs.
The Canadian Agricultural Partnership in Alberta accepts ongoing applications for their numerous grant programs: Accelerating the Advancement of Agricultural Innovation, Adapting Innovative Solutions in Agriculture, Agriculture and Food Sustainability Assurance Initiatives, Agriculture Training Support, Alberta Beekeepers Stock Replacement, Environmental Stewardship and Climate Change, Farm Water Supply, Irrigation Efficiency, Public Agriculture Literacy, and Youth Agriculture Education.
Eligible employers can get government funding to help employees access training opportunities.
Environmental product programs
Canadian SMEs or start-up companies can receive up to 40% of the cost of a new employee’s salary to a maximum of $75,000 in order to carry out a project that supports the development of a natural product or technology.
If you're a Canadian incorporated SME or start-up, you can get a contribution of up to $25,000 for the cost of an external consultant or other service provider that will help develop a business or commercialization plan for natural products or technologies.
Indigenous entrepreneurs can get a non-repayable contribution of up to $99,999 for business planning, acquisitions, expansion, domestic or export marketing, new product or process development, introducing new technologies and more.
Innovation and technology grants
Alberta Innovates assists high-growth, high-potential SMEs to help commercialize new technology and knowledge-based products. If you’re developing clean technology that’s going to diversify our energy resources, learn more about Clean Resources.
The Boost Your Business Technology grant offers support to Canadian-owned small and medium sized enterprises who want to adopt new digital technologies.The grant covers up to 90% of the eligible cost of retaining the services of a digital advisor, up to a maximum value of $15,000, to develop a digital adoption plan.
Get a subsidy of up to $30,000 to cover the wages and associated training costs when you hire a post-secondary graduate 15 to 30 years old. You must provide the intern with digital and soft-skills experiences that will prepare them for the workplace.
Through the Prairies Economic Development Canada, The Strategic Innovation Fund's (SIF) objective is to spur innovation for a better Canada by providing funding for large projects and national innovation ecosystems.
Alberta and Canada small business loans
General small business loans are available from banks. There are also funding opportunities with more specific criteria that can offer interest-free repayment options. We’ve listed opportunities relevant to Alberta small businesses:
The first place to start for a small business loan would be your business’s bank. Your business credit is tied directly to your personal credit, so it’s important to keep a good credit score. The best bank for small business loans in Alberta is ATB. (ATB has tons of great resources for small business owners, as well as their renowned — and free — ATBX program.)
The Black Entrepreneurship Loan Fund is a partnership between the government, Black-led business organizations and several financial institutions. It will provide loans up to $250,000 to Black business owners and entrepreneurs across the country.
The BDC is a crown corporation and can extend higher lending amounts. However, they sometimes make you jump through hoops before finally giving you the money.
Community futures offers loans for small businesses in rural Alberta and is a great resource if you qualify. They extend loans from $500 to $150,000.
If you are working on a project for your business to transition to a green economy, foster an inclusive recovery, become more competitive and create jobs for Canadians, you could get an interest-free, repayable contribution for up to 50% of the project’s costs.
How to maintain good credit
To qualify for loans, you’ll need to maintain good credit. The most important thing here is to make all your payments. This includes:
- Mortgage payments
- Credit card payments
- Car payments
- Phone and internet payments
- Insurance payments
- Tax payments
Sign up for a credit monitoring program to get a credit report each month, and you’ll be notified of any credit applications made in your name.
COVID-19 recovery small business loans and grants
If your business has been affected by COVID-19, you could get a retroactive rent subsidy that covers up to 65% of eligible expenses to a maximum of $75,000 per business location, and $300,000 in total for all locations, with additional amounts for temporary closures. They are accepting applications until Sept. 8, 2022.
Canada Emergency Wage Subsidy (CEWS)
If you’re a Canadian employer who has had your revenue drop due to the COVID-19 pandemic, you may be eligible for a subsidy to cover part of your employees’ wages. This subsidy will enable you to re-hire workers, help prevent further job losses, and ease your business back into normal operations.
Indigenous Community Business Fund
Get a non-repayable contribution to cover eligible operating costs if your Indigenous business has experienced a significant reduction in revenues due to COVID-19.
Tourism Relief Fund (TRF) in the Prairie provinces
If you’re working on a project to enhance tourism experiences in your region or helping the community attract more visitors, you could get a $100,000 non-repayable contribution for up to 50% of your project’s costs or a $500,000 repayable contribution for up to 75% of the costs.
Have more questions? You can contact Canada’s Small Business Services for support and information.
Find more Small Business Basics content that might be helpful to you and your business on our blog.