The Basics of Equity Financing Grants
The Canadian government has officially earmarked more than $20 billion for small business grants and loans. All qualified Canadian small business owners can avail of this fund. The aim of Canadian government grants and loans program is to promote growth at the local level and provide the necessary assistance for fledgling Canadian entrepreneurs. There are different types of government grants available for you. One interesting grant that you may want to explore is the Equity Financing program of the government.
Equity financing grants of the Canadian government is designed for start up ventures and existing small businesses. This specific type of grant can provide at least $250,000 in government subsidies to individual business owners. In fact, the allowable amount for equity financing can reach up to $10 million. The maximum amount would be enough to establish a medium sized business, acquire modern facilities, expand production, and create new markets. That is why you have to explore the possibility of getting Canadian equity financing if you want to significantly boost your capitalization for further expansion and modernization.
Canadian government grants under the equity financing program would be similar to debt to equity swap and financing. The major difference is that the Canadian government will act as your partner in lieu of a private investor or capitalist. Essentially, the Canadian government will invest in your business and become a stake holder. This is beneficial because the principal aim of official investment is to provide stimulus for your company instead of getting a return for the investment. So, there is actually no pressure for you when it comes to repaying the invested capitalization. However, it does not mean that you will renege on your contract and squander the invested money. You still have to become a good partner and repay the government in the form of equity payments.
However, not all small businesses can avail of Canadian government grants especially if the program falls under equity financing. There are required eligibilities that you have to meet so that the government of Canada will consider investing in your company. Having a strong and cohesive management team is one of the first requirements for getting equity financing. Your company needs to show that it has a strong leadership to push the business forward. You also need to divulge your company books and show proof that your business is profitable. You should also show proof to the Canadian government that your company has a solid financial control system to guarantee correct utilization of the official grant. Most importantly, your business proposal should show that your company will have a definite market advantage and competitiveness if it gets equity financing.
Getting Canadian government grants is easier now because of the availability of official funds. However, you still have to research which type of grant would be suitable for your company. If you think that your company has the right eligibility and competence, then you can apply for equity financing which is one of the best official grants that can be provided by the Canadian government.
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