Building a Business

Grow Your Business with Canada's 2024 Startup Grants & Loans

Paul Sharpe, CPA, CA
May 29, 2024

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Discover funding opportunities that will help you launch and grow your Canadian business in 2024.

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Today, we’re diving into funding opportunities that will help you launch and grow your Canadian business in 2024. 

The most important thing to remember is that starting a business involves careful planning and managing initial costs. These costs can vary greatly depending on the type of business you’re running.

For example, if you’re opening a brick-and-mortar retail store, you’ll need significant up-front capital to get started. 

On the other hand, if you’re launching a web design service, your startup costs might be as simple as registering your business and building a website.

Ensuring you have the necessary funds to cover these expenses can be stressful - we get it. We’ve been there. 

Fortunately, there are several grants and loans available for startups in 2024 that can ease your stress and kickstart your business journey.

Stick around to the end of the video where we’ll look at a very simple framework to determine your funding needs!

StartUp Grant to for Marketing and Sales

First up, let's delve into a grant designed to help you build an online presence, connect with your customers and boost sales.  

The Canada Digital Adoption Program is currently offering the Grow Your Business Online grant of up to $2400. 

This grant can cover costs such as:

  • Building an e-commerce website.
  • Adding functionality, such as online booking, to your existing site.
  • And hiring a consultant to help with your digital marketing strategies to support your e-commerce site.

To be eligible, you must be a registered or incorporated for-profit business selling goods or services directly to end consumers. 

You must also have at least one employee other than yourself OR have at least $30,000 in annual revenue in 2023.

Building an online presence is crucial nowadays to build trust and credibility with your consumers. This grant offers an excellent opportunity to kickstart that process without the burden of covering associated expenses.

Learn more about the Canada Digital Adoption Program.

StartUp Grants for Hiring 

Next, let's look into grants that can help you hire employees.

Starting a business often means wearing multiple hats.

But to really grow, you need additional hands on deck.

As a business owner, you’ll learn to leverage your strengths and collaborate with others to enhance your capabilities.

However, before you can bring new team members aboard, you need to ensure you have the means to compensate them. 

It's akin to a classic chicken-and-egg scenario: you need to hire to grow, yet you need growth to afford hiring.

The good news is, you can access grants to support the recruitment of young talent.

Get Youth Working! Program

The Get Youth Working! Program is one that we have used successfully at Avalon to hire young talent. The program offers employers a $2,800 hiring incentive, for up to three hires aged 15 to 29. There is also an option to request up to $1,000 to help train newly hired youth workers.

To be eligible:

  • The business and employee must be located in British Columbia
  • Employers must be in business for a minimum of 1 year
  • Employers must be in good standing with WorkSafe BC
  • The new hire(s) must be employed for a minimum of 3 months and 30 hours per week
  • Application for the program must be approved before the new hire starts work

The program runs at various times throughout the year, so check out the Get Youth Working! website to find out more.

Career Ready Program

Another valuable resource is the Career Ready Program, designed to assist businesses in financing student work-term placements.

This program offers up to $7000 in wage subsidies per student.

To qualify, you must be a Canadian business or non-profit capable of providing a meaningful, tech-focused work experience to a student.

Students must be enrolled in an accredited Canadian post-secondary institution and engage in a tech-immersive role, although they do not need to be studying a tech-related field.

The program operates twice a year, during the Summer and Winter seasons. For further details, visit Technation's website.

How to Find Grants & Subsidies for Your Business? 

While we've mentioned a few grants to help kickstart your journey, make sure to regularly search for new grants and subsidies that match your business goals.

A great place to find government grants and subsidies is the business benefits finder website that’s run by “Innovation Canada”.

It’s a simple process where you answer a few questions about your business and it will provide you with a list of potential sources of funding.

Startup Loans for Entrepreneurs in Canada

Now that we’ve covered a few grants to help you grow your business, let’s have a look at a few startup loans available in Canada.

Start Up Loan for Young Entrepreneurs in Canada

Futurpreneur’s Core Startup Program was built to empower aspiring young entrepreneurs on their journey to success.

Their program provides equity-free business loans of up to $60,000 and up to two years of mentorship to help get your Canadian business off the ground.

You are eligible if:

  • You are a Canadian citizen or permanent resident of Canada and you physically reside in Canada.
  • You are between the ages of 18-39 at time of your Futurpreneur application.
  • You can demonstrate some training or experience related to your business idea.
  • Your business must be registered and operate in Canada.
  • Your business’ revenues must be deposited to a Canadian business bank account and be subject to Canadian taxes.
  • Your business is not yet operational or has been operating full time for 12 months or less.

Check out Futurpreneur’s program to learn more and apply!

Start Up Loan for Women Entrepreneurs in Canada

Formerly known as the Women’s Enterprise Centre of British Columbia, WeBC provides business loans of up to $150,000 for women entrepreneurs in B.C. 

Loans are available for startups to scale and grow, to acquire a business, and for business expansion projects with flexible repayment options over a five-year term.

You are eligible if: 

  • You are a woman who owns and controls at least 51% of a business that is registered and located in BC, or 50% for wife-husband teams.
  • You’re considered a Canadian citizen or Permanent Resident.
  • You reside in BC.
  • You are over 19 years old.

You’ll have to check off a couple of boxes to apply such as having a business plan in place, demonstrating that you have the business skills to operate a business and showing personal equity investment in your business.

Check out WeBC’s website to learn more and apply! 

Startup Loan for Minorities

Futurpreneur recently introduced two new programs to help minorities overcome the challenges of starting and running a business.

The Indigenous Entrepreneur Startup Program (IESP) and the Black Entrepreneur Startup Program (BESP) offer flexible financing of up to $60,000 with a term over 5 years, along with expert mentoring and other resources to help kickstart your business.

Accessing funds as a startup business has its own set of challenges, and minorities often have to deal with extra barriers due to systemic bias. 

These programs aim to provide resources to help entrepreneurs succeed. 

Check out Futurpreneur’s program to learn more and apply!

Other sources of funding for startups

Now, let's explore other funding sources that can help you gather the startup capital needed to launch your business.

Bank Loan

A bank loan is just a lump sum of money that you borrow from the bank, under the agreement that you'll pay it back with interest over a set period. This period could range from a few months to several years.

Once you qualify for the loan, you’ll receive the entire amount upfront. 

Afterwards, you’ll make regular payments, often monthly, until the loan is fully paid off. These payments include both the principal amount and the interest accrued.

Bank loans can be good for large, one-time investments like buying equipment or renovating a space. 

Since you get all the money at once, it's great for projects with upfront costs. However, it’s important to make sure you have a plan to repay the loan on-time.

Line of Credit

A line of credit, on the other hand, is like a financial safety net for your business. 

Unlike a bank loan, you don't get a lump sum. Instead, the bank approves you for a maximum amount that you can borrow as needed.

You only pay interest on the money you actually use, not on the full amount you're approved for. You can keep borrowing and repaying up to your credit limit, much like a credit card.

Lines of credit are excellent for ongoing expenses and unexpected costs. For example, if you need to hire extra staff for the holiday rush or deal with an unexpected repair. 

With a line of credit, you have the flexibility to cover these costs without taking out a new loan every time.

With brand new businesses, it’s often difficult to get approved for a loan or line of credit on the merits of the business alone. You’ll usually need to provide a personal guarantee as the owner of the business.

Angel Investors

Angel investors are affluent individuals who invest their own money into startups and small businesses, usually in exchange for an ownership stake.

Typically, an angel investor is not just a money source but also someone who has business experience or industry connections that can benefit your business. 

They often mentor the entrepreneurs that they invest with, providing valuable insights to help the business grow.

The major advantage of securing an angel investor is that you get access to more than just cash. You gain a partner who has a vested interest in your success and can provide mentorship and networking opportunities.

If this sounds like something you want to pursue, you can check out organizations such as the National Angel Capital Organization of Canada, Canadian International Angel Investors, and the Canadian Angel Investment Network, all linked below. 

These platforms can connect you with individuals who are looking to invest in businesses like yours.

How much will it cost to start my business in 2024? 

If you stuck with us till now, I want to show you an easy way to calculate the funding you’ll need to launch your business. 

There’s a pretty simple formula you can use to determine if you have the necessary funds to start our business. 

Just a quick heads up - Although the formula is simple, the actual process takes a little bit of thought.

Cash Available

First up we’ll begin by determining what startup cash is available to you. 

This is the amount of money you have available to invest in your business and cover costs before your revenue kicks in.

It could include sources like:

  • Personal savings
  • Family and friends
  • Government grants
  • Bank loans
  • Lines of credit
  • Angel investors,
  • Or even Crowdfunding

Startup Costs

Next we’ll look at your startup costs. These are one-time expenses required to launch your business.

Some examples include:

  • Business registration
  • Equipment purchases
  • Initial marketing
  • Purchases of inventory, and
  • Support services like accountants, lawyers or web developers 

Ongoing Costs

After startup costs we want to determine your ongoing costs.

These are your regular expenses that will recur each month after your startup phase.

Some examples include

  • Marketing expenses
  • Rent and occupancy costs
  • Software and web hosting costs
  • Supplies
  • Support services
  • Etc.

Projected Revenue

Next you’ll create a forecast of your projected revenue.

This is the money you expect to earn from your business operations over a given period of time.

It’s not an exact science, but you’ll estimate how many customers you will serve and how much you will earn per customer.  

Then project your revenue out over the next year using your best estimates.

Cash Flow Forecast

Once you’ve outlined your available cash, startup costs, ongoing costs and projected revenue, you’ll create a cash flow forecast.

This will help you understand how money will move in and out of your business and will highlight any surplus or shortages for the upcoming year.

The general approach is to:

  1. Subtract your startup costs from your cash available. 
  2. Then add your projected revenue and subtract your ongoing costs each month. 

This will give you an idea of your financial health and available cash balance over time.

Here’s an example to help illustrate this.

Let’s say you have $10,000 in personal savings and have access to a $7500 line of credit to start your business. 

You’ll want to take that $17,500 of cash available and subtract the start up costs of your business. This gives you a balance of cash left over after you’ve paid for any startup costs. 

The next step will be to estimate your monthly revenue. You’ll do this by taking your projected number of customers and multiplying by the average revenue per customer.

And then lastly, we’ll subtract our monthly ongoing costs.

Here’s an example of what a six month cash forecast could look like. 

In the example, we can see that as revenue goes up, the owner can start taking more from the business in the form of wages or owner draws.

Important note here - You’ll always want to keep an eye on the cash balance to ensure there is enough to cover unforeseen circumstances. 

Let's Wrap Up!

We’ve covered a range of funding options for your business, from grants to loans, and we've shown you how to assess your funding needs based on your initial and ongoing costs, projected revenue, and available cash.

If you’ve made this far, I want to leave you with a crucial piece of advice:

Always keep an eye on your cash flow. It’s the lifeblood of your business. Regularly update your cash flow forecast and adjust your spending as needed. 

This proactive approach will help you avoid financial surprises and keep your business on a stable path.

This means having a good and simple bookkeeping process to keep your numbers up to date.

Get Help to Start Your Business

Starting a business can feel overwhelming with all the tasks at hand.

If you are truly committed and motivated to build your dream business, nothing should stand in your way.

You might just need a bit of extra guidance, and that’s where we can help.

We’ve created a course designed to help Canadian entrepreneurs launch their businesses in just 7 days. 

In the 7 Day Business Starter Course, we walk you through all the steps of starting a business so you can launch with confidence and on strong foundations.

If you’re tired of the guesswork and want more accountability, guidance and direction to build your business, then this is it!

Check out our 7 Day Business Starter Course to learn more!

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Article by
Paul Sharpe, CPA, CA
Originally published
May 29, 2024
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