Corpcentre's Blog

April 4, 2010

What Government Funding Can I Get for my Business?

If you are like most Canadians in business, you’ve probably wondered if you can ever get something back from the government, after you’ve paid all those taxes over the years. It seems only fair.

The best situation is discovering that you are eligible for a government grant or contribution. Grants do not need to be repaid and contributions are only repaid in certain cases. The problem is that these are few and far between. Generally, grants are available for specific programs and have very specific criteria. For the most part, grants usually are provided for specific industry sectors or for certain demographic groups.

On the other hand, there may be other government options that are applicable to your business. For example, you may be eligible for a government loan guarantee. This would enable you to get a loan that you might otherwise not receive approval for. With the government behind you, the bank will be far more willing to talk with you.

If you hire employees that have certain characteristics, you may be entitled to wage subsidies to help offset their salaries. Check with your tax advisor who is currently on the subsidy list and whether your business can benefit from these employees.

If your business makes certain investments, you may be entitled to a tax credit or refund. Check the current information with the relevant tax authorities.

If your business does not qualify for a commercial loan, you may be entitled to a loan from various government departments. Also, these government offices sometimes offer loans to businesses at lower rates than commercial lending institutions. A little research may save you some money.

In general, before assuming that your neighbourhood bank is the only lending option that you have, check what’s available from the government. You may be pleasantly surprised.

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September 29, 2009

Small Business – Less Tax

However you dissect the finances of a business, specifically a small business, cash is the primary component of the bottom line. The more cash in the coffers, the more flexibility the business has.

The current global recession has dealt extremely harshly with Canadian small businesses. Reduced sales and credit restrictions have pummeled the cash flow of many worthy enterprises.

The Canadian government, seeking to ease the plight of this important and large sector of the country’s business community, has established several stimulus programs through its Economic Action Plan to provide much needed economic relief. Realizing that continued growth of small business is dependant upon available cash, the federal government has passed legislation that increased the amount of small business income eligible for a reduced federal tax rate of 11 percent. Effective January 1, 2009, the eligibility cap was raised from $400,000 to $500,000. Canadian-controlled private corporations that claim the small business deduction are eligible for this credit. By increasing the eligible income by 25 percent, the federal government is helping small businesses retain more of their hard-earned cash. This, in turn, will help stabilize the business community, create new, much-needed jobs, and promote economic growth throughout the nation. It is estimated that this reduced tax rate will cost the country more than $120 million over the next two years. However, with nearly half a million Canadians out of work, it is a wise investment and money well spent.
Canadian businesses can obtain detailed information from the applicable federal government agencies.

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July 7, 2009

Entrepreneurs optimistic despite recession and tight credit, BDC survey says

A recent poll conducted by the Business Development Bank of Canada found that small business owners are positive about their own future, more so than for the economy or their individual industries. Many find tight credit to be an issue for their companies though.

86% of entrepreneurs surveyed saw growth potential for their companies, but less predicted growth for their industries (75%) and only 60% saw the economy growing in the future. “Entrepreneurs see opportunities where others may see only difficulties,” said Edmée Métivier, Executive Vice President of Financing and Consulting at BDC.

Tight credit the culprit

Those surveyed also found that their credit tightening was their biggest obstacle to growing their businesses (70%). The next biggest factor to blame was the recession at 65% of those polled, and fewer pointed to increased fuel costs and material (45% and 40% respectively).

Out of almost half of entrepreneurs polled who have attempted to get credit financing, 34% reported having received it and 40% said they were unsuccessful. The other 25% were still awaiting decisions. But 39% of all have dealt with tight credit as a factor.

In terms of the types of credit sought, the results showed the most wanted to operate a line of credit (70%), while 28% want term loans, 22% business credit cards and 18% commercial mortgages.

Positive for Growth

As far as general growth, 59% of entrepreneurs see the economy’s stability and strength as the number one factor that would lead to it, 41% point to the value of the Canadian dollar and 41% look to a strong labour market.

The Survey

The BDC has a new panel called BDC ViewPoints, whose participants are comprised of entrepreneurs and professionals that are asked to join surveys so they can express their views on policies, products as well as services that affect commercial banking.

In this particular survey, 231 entrepreneurs participated between May 6 and May 20. Results were weighted by the size of each firm and region in order to have the results accurately represent Canadian small and medium-sized businesses.

Detailed survey results are available on BDC’s website.

About BDC

BDC is Canada’s business development bank. From 100 offices across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs.

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