Grants and Loans for Young Entrepreneurs in Canada 

Young entrepreneurs in Canada have access to financing in the form of grants and loans by banks, non-government organizations and associations, and under government programs.

Grants

Grants are offered by different entities in Canada, among which the Impact Canada Challenge Hub, Strategic Innovation Fund, and Quantum Leap. SMEs are offered grants under the Quantum Leap pharma-led funding program, and the main focus is on research and drug development. Eligible costs include laboratory and material supplies and benefits and salaries paid to students, postdoctoral fellows, and professional and technical assistants. CanExport offers grants to businesses with a focus on external market development and reimburses up to 75 percent of all project costs. Businesses operating across industry sectors are eligible provided that they have annual revenues between $100,000 and $100 million and up to 500 full-time employees. Only limited liability partnerships and incorporated legal entities qualify for financing.

Financing by Non-Profit Organizations

Futurpreneur Canada is a non-profit organization that offers mentoring and financing to young entrepreneurs aged 18 to 34. Eligible applicants benefit from 2 years of mentoring and receive up to $60,000. Funding is available in the form of unsecured loans and offered to businesses who meet the eligibility criteria. Only applicants who have a comprehensive business plan and relevant experience and training qualify. Businesses across sectors are eligible to apply, including skilled trades, services, and retail. Funding is also available to students, newcomers to Canada, and people working for non-for-profits. Women entrepreneurs are offered financing through the Women’s Enterprise Centre, Alberta Women Entrepreneurs, PARO Centre for Women’s Enterprise, and other entities.

Government Programs

Young entrepreneurs are offered government-sponsored loans to pay registration fees and buy leasehold improvements, commercial buildings, land, and used and new equipment. Ineligible assets and items include franchise fees, goodwill, inventory, and working capital. Loans with variable and fixed rates are offered through participating institutions such as the Bank of Nova Scotia, Bayview Credit Union, Progressive Credit Union Limited, and others.

Private Providers

This is yet another option for young entrepreneurs who are looking for business financing. Private providers offer loans to help businesses get access to working capital, buy equipment or real estate, or buy an existing business. The Business Development Bank of Canada, for example, offers start-up financing for advisory services, franchise purchases, start-up and marketing fees, fixed assets, and working capital. The main benefits are no prepayment penalties and longer amortization periods. Only applicants with good credit scores qualify provided that they show sales and market potential. Scotiabank also advertises business term loans that come with flexible repayment schedules, affordable variable and fixed rates, and penalty-free full and partial prepayments. Funding is offered to businesses that seek to invest in major fixed assets. CIBC features business loans of over $10,000 to help applicants purchase assets and make investments. Applicants benefit from short approval times, affordable payments, and access to working capital. The money can be used toward capital asset upgrades or fixed asset and equipment purchases. There are optional features such as no prepayment penalties, blended interest and principal, and choice between variable and fixed interest rates – see inflation: https://www.smartborrowing.ca/inflation-in-canada/. CIBC offers competitive interest rates to applicants who are able to provide collateral in the form of hypothec, cash equivalent or cash, or principal residence. Other financial institutions that offer business loans include the Royal Bank of Canada and TD Bank. Customers have access to a host of solutions such as small business vehicle lending, agriculture loans, and business lines of credit.

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