12 Must-Know Funding Sources for Tech Startups in Canada
Starting a tech biz is thrilling, but it also takes a big investment to bring your ideas to life and make your biz a success. You need to cover the costs of gear, software, office space, and staff salaries, which adds up fast.
Thankfully, funding can give your startup the cash infusion it needs to focus on developing your product and growing your biz without stressing about the costs of starting a company.
Luckily, plenty of funding options are available in Canada to help fuel your startup. In this article, we’ll talk about the best funding sources for tech startups.
Futurpreneur Canada
Futurpreneur Canada is a financing program that provides collateral-free loans to startups at a better interest rate than most banks. With the ability to finance up to $20,000 per business (minimum $5,000), the program also offers additional funding of up to $40,000 through its partner, BDC. The program provides funding and two years of expert mentoring support to help startups get started on the right track. The loan is repayable over five years, with interest-only payments required in the first year. There is no penalty for early repayment of the Futurpreneur portion of the loan.
Amount: Up to $60,000
Eligibility: Canadian citizens or permanent residents aged 18-39, who have a business idea and are ready to start a business.
Application Process: The application process is straightforward, with just one application required for both financing options on the Futurpreneur website. The application process involves filling out an online application form, submitting a business plan, and completing an in-person interview.
Business Development Bank of Canada (BDC)
The Business Development Bank of Canada provides financing and support to Canadian entrepreneurs. The BDC offers a range of financing options, including loans, venture capital, and equity financing, to help startups grow and succeed.
It’s worth noting that if you’re located in the Peterborough and Kawarthas area of Ontario, the Business Development Bank of Canada has partnered with the Innovation Cluster to provide additional support to startups in the region.
Through this partnership, entrepreneurs can access expert advice, networking opportunities, and funding to help them start and grow their businesses.
Amount: Varies depending on the financing option selected.
Eligibility: Canadian businesses looking for financing and support to grow and succeed.
Application Process: The application process involves filling out an online application form, submitting financial statements and a business plan, and undergoing an assessment by a BDC financing specialist.
Community Futures Peterborough
Community Futures Peterborough is a non-profit organization that provides financial assistance, business counselling, and training services to entrepreneurs and small businesses in the Peterborough region. The organization offers three types of loans for tech startups:
Inventory Loan: Up to $10,000
Micro Loan: Up to $20,000
Expansion Loan: Up to $300,000
Eligibility: Tech startups must have a solid business plan and a clear path to profitability. Applicants must be Canadian citizens or permanent residents, and the business must be located in the Peterborough and Kawarthas region.
Application Process:
- Connect with an advisor to discuss your project and needs.
- Complete the application form and provide all supplemental information to Community Futures Peterborough.
- The Loan Committee reviews your application, and a decision is made.
The startup must sign a loan agreement and provide collateral or a personal guarantee if the loan is approved. Community Futures Peterborough evaluates each application on a case-by-case basis and aims to decide within a few weeks.
Canada Small Business Financing Program (CSBFP)
CSBFP provides small business loans to help entrepreneurs start or expand their businesses.
Amount of Funding Available: Up to $1 million.
Eligibility: Must be a Canadian-owned and operated small business.
Application Process: Apply through a participating financial institution and provide a detailed business plan and financial projections.
FedDev Ontario: Business Scale-up and Productivity
FedDev Ontario provides funding to support the growth and expansion of businesses in Southern Ontario.
Amount of Funding Available: Up to $10 million.
Eligibility: Must be a Canadian SME located in Southern Ontario.
Application Process: Fill out an online application and provide a detailed project proposal and budget.
National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP)
NRC-IRAP funds small and medium-sized enterprises (SMEs) to support research and development projects. The program also provides access to expert advice and support from industrial technology advisors.
Amount: Varies depending on the project
Eligibility: Small and medium-sized enterprises (SMEs) engaged in research and development projects.
Application Process: The application process involves filling out an online application form, submitting a research and development proposal, and undergoing an assessment by an NRC-IRAP industrial technology advisor.
Kawartha Lakes CFDC
Kawartha Lakes CFDC helps local businesses in the Kawarthas region who are having trouble accessing financing through more traditional channels. Funding is available to entrepreneurs starting out, innovating, or growing their businesses. They don’t compete with other financial institutions but instead focus on forming collaborative partnerships that benefit everyone involved.
Amount: up to $300,000
Eligibility: You will need evidence of commitment to your business and its viability, such as:
- Showing that you have enough financial resources to carry out your operations
- Having collateral in support of your loan request
- Proving that you have the necessary skills and experience when it comes to running your business
- Presenting past success stories, if applicable
Application Process:
- Complete the application
- Fill out your personal net worth statement
- Provide any additional documents (business plan, cash flow projections, financial statements)
Innovative Solutions Canada
Innovative Solutions Canada helps Canadian businesses test their innovative products and services within the federal government before bringing them to market.
Amount of Funding Available: Up to $500,000 per contract to cover eligible costs, with no limit on the number of contracts a company can be awarded.
Eligibility: Canadian innovators with pre-commercialized, innovative products or services that have the potential to meet federal government needs. Eligible businesses must have fewer than 500 employees and less than $100 million in annual revenue.
Application Process: Interested businesses can submit their product or service for evaluation through the Innovate Canada website. If the product or service is deemed a good fit for government needs, a contract will be awarded for a testing period of up to two years.
Sustainable Development Technology Canada (SDTC)
SDTC funds Canadian cleantech companies to develop and demonstrate new technologies that reduce environmental impacts.
Amount of Funding Available: Up to $50 million per project, with a maximum of $100 million per company. Projects can receive up to 33% of eligible project costs in funding.
Eligibility: The program is specifically looking for Canadian cleantech companies that have developed innovative technologies with the potential to reduce greenhouse gas emissions and improve the environment. To be eligible, companies must be client supported and nominated by a designated accelerator. Innovation Cluster Peterborough and Kawarthas is one such designation, and interested startups should check their website for more information. Companies must also be incorporated in Canada and have a technology that is at or beyond the demonstration stage.
Application Process: Interested companies can submit an expression of interest on the SDTC website. If the project is deemed a good fit, the company will be invited to submit a full application. The application process involves several stages of review, including a technical assessment, financial review, and due diligence.
CanExport
CanExport provides funding to Canadian small and medium-sized businesses to expand their international markets through trade missions, business-to-business meetings, and other activities.
Amount of Funding Available: Up to $75,000 in funding for travel and business development expenses associated with exporting to a new market. Companies can receive up to two funding contributions per year.
Eligibility: Canadian small and medium-sized businesses that have been operating for at least one year and have less than 500 full-time employees. Eligible companies must be exporting or planning to export to a new market.
Application Process: Interested companies can submit an online application through the CanExport website. Applications are reviewed on a rolling basis and can take up to eight weeks to be processed. Companies are required to provide detailed information on their export plan and the expenses they are seeking funding for.
Women Entrepreneurship Fund (WEF)
The Women Entrepreneurship Fund provides funding to support women entrepreneurs in Canada and help them grow their businesses.
Amount of Funding Available: Up to $100,000
Eligibility: Must be a Canadian women-owned and led business.
Application Process: Fill out an online application and provide a detailed business plan and financial projections.
Black Entrepreneurship Loan Program
The Black Entrepreneurship Loan Program provides low-interest loans to Black entrepreneurs and business owners in Canada to help them start, grow and expand their businesses.
Amount of Funding Available: Up to $250,000.
Eligibility: Must be a Canadian Black entrepreneur or a business owner.
Application Process: Apply through a participating financial institution and provide a detailed business plan and financial projections.
The Innovation Cluster can help!
Starting a tech biz in Canada can be tough, but don’t worry, there’s funding out there to help you get the cash you need to reach your goals. The funding sources we talked about here are just a few of the options you have.
To get the scoop on all your funding choices and take your biz to the next level, reach out to our experts at the Innovation Cluster. Don’t wait, check out our programs today and see how we can help you succeed.
Pro tip:
NRC-IRAP and FedDev Ontario have their office at Innovation Cluster, and Community Futures Peterborough is located pretty close to our office at Venture North Building. Just thought you should know!