Launching a start-up is a pursuit fueled by boundless ambition and unyielding passion. Yet, for many aspiring entrepreneurs in Canada, the harsh reality of insufficient funding can cast a shadow over their dreams. So, we’re tossing you a lifeline to turn your start-up aspirations into tangible success. Check it out:
Thinking Outside Conventional Funding Options
While conventional funding avenues such as venture capital and angel investments beckon, it’s the strategic embrace of tax credits and government grants that can breathe life into your start-up’s journey.
Start-Ups Lifeline #1: Tax Credits
When your start-up dreams are threatened by budget constraints, tax credits stand as a radiant beam of hope. Tax credits are a boon for start-ups aiming to maximize their financial resources. This avenue empowers start-ups to offset a portion of their expenses against taxes owed, thereby freeing up crucial capital for growth initiatives.
For example, with the Scientific Research and Experimental Development (SR&ED) tax incentive program, start-ups deeply involved in research and development can offset a portion of their R&D expenditures against looming tax burdens, channeling precious resources back into their innovation initiatives.
Aside from the SR&ED tax credit, your business may also qualify for:
In Canada, government grants are not just financial lifelines for start-ups; they are catalysts for entrepreneurial dreams. Start-ups across industries can tap into a myriad of grant programs offered by federal and provincial governments. From technology and clean energy to agriculture and healthcare, these grants provide a much-needed infusion of funds to foster innovation and drive economic progress.
Grants are available to companies of all sizes and support almost all of a company’s ongoing initiatives. Government grants can help your business to fund ongoing R&D projects, access international markets, grow your team, fund salaries and marketing activities, and more.
A few well-known grants include:
- IRAP-NRC: Helps SMEs take their ideas to market.
- CanExport Innovation: Helps businesses pursue foreign ventures.
- Business Scale Up: Provides funding to accelerate growth and the adoption of new technology.
- and much, much more!
Most grants are received in the form of a cost-share with start-ups receiving funds as a reimbursement shortly after the work is completed.
Bonus Tips for Start-ups Searching for Funding
1. Utilize Research Tools: With thousands of funding opportunities available, each with extensive eligibility criteria, identifying funding opportunities can be a time-consuming process, yet a highly necessary one that typically requires an expert eye. However, there are free tools available, such as FundScan, which retrieve funding opportunities for your specific project or business parameter with just a few clicks.
2. Meticulous Documentation: For tax credits like SR&ED, meticulous documentation of your research and development activities is paramount. Accurate record-keeping ensures you can substantiate your claim and maximize the potential tax benefits.
3. Use Your Social Network: Social media is a great resource for start-ups searching for funding opportunities. Following companies, like Leyton, can provide you with valuable insights on available funding opportunities.
4. Professional Newsletters: Starting a new business is time-consuming, wouldn’t it be great if you received funding opportunities straight to your inbox? Many companies, such as Leyton, curate newsletters with exclusive funding opportunities. You can sign up for the newsletter here.
5. Seek Professional Guidance: Enlist the expertise of consultants well-versed in start-up funding and in your industry. Their insights can help you navigate the complex landscape of tax incentives and grants, ensuring you make the most out of each opportunity.
The Bottom Line:
For Canadian start-ups, funding is the fuel that propels their business forward. While venture capital and angel investments are viable paths, harnessing the potential of tax credits and government grants can elevate your start-up’s growth trajectory.
If you’re a start-up searching for funding to nurture your dreams and grow your business, do not hesitate to set up a free consultation with our experts, and leave all the heavy lifting to us!
