Canada is home to a thriving tech industry that has seen significant growth in recent years. With a supportive government, access to top talent, and a strong innovation culture, the country has made leaps in this space.
However, any growth in tech is only possible if startups and established tech companies have access to sufficient funding. Fortunately, there are several ways in which tech companies can secure funding in Canada to get the capital infusion they need to grow and innovate.
Sources for Tech Companies to Get Funding in Canada
These are a mix of governmental and private sector funding sources that are available for tech companies in Canada.
1. Business Development Bank of Canada (BDC)
Eligibility: Canadian business.
Amount: Varies (based on the financing option)
The Business Development Bank of Canada (BDC), a federal financing institution, is dedicated to supporting Canadian entrepreneurs and businesses. They offer various types of financing, including venture capital investments, growth and working capital loans, and equity financing.
Businesses that have been operational for less than 12 months can get funding and mentoring from BDC’s partners. Commercial loans up to $250,000 are available for revenue-generating businesses that have been operational for at least 12 months.
For tech businesses in Kawarthas and Peterborough, the bank partners with the Innovation Cluster, a startup incubator, for additional support.
How to Apply:
Fill the online application form and submit relevant documents, including a business plan and financial statements. A financing specialist from the BDC will assess your application and get in touch.
2. Canada Small Business Financing Program (CSBFP)
Eligibility: Canadian small business with a gross annual revenue of under or equal to $10 million
Amount: Up to $1 million
The Canada Small Business Financing Program (CSBFP) is a government program designed to help small businesses access loans to purchase or improve assets, such as land, buildings, and equipment. The program is administered by the federal government in partnership with financial institutions.
How to Apply:
Get in touch with a credit union, caisse populaire, or a financial officer at a participating bank to apply for the loan. If you’re approved for the loan, the institution will register it with the Innovation, Science and Economic Development Canada (ISED). Find participating lenders here.
3. Innovative Solutions Canada
Eligibility: Canadian businesses with an innovative product that hasn’t been commercialized yet; businesses must have annual revenue of under $100 million and fewer than 500 employees
Amount: Up to $500,000 for each contract, with no limit on the number of contracts awarded
The federal government’s Innovative Solutions Canada program connects Canadian businesses with federal departments and agencies to create innovative solutions for government needs. Kraken Robotics and Shearwater are examples of businesses that have benefited from this program.
The government sets tech challenges and businesses submit proposals for solutions. If selected, the business receives funding to develop a prototype. Businesses that have a prototype can also apply for funding to test their innovation in real-time settings.
How to Apply:
The open funding opportunities are displayed on the program’s website. You can also sign up for their newsletter or follow them on LinkedIn for updates.
4. Futurpreneur Canada
Eligibility: Canadian citizens or permanent residents aged 18 to 39 with a business idea
Amount: Up to $60,000
Futurepreneur Canada provides funding and support services to young entrepreneurs in Canada. Businesses can get an equity-free loan of up to $60,000 with $40,000 in additional financing from the BDC.
Further, the program offers 1:1 mentorship for up to two years to ensure the startup’s success. They also provide access to resources, such as the Rock My Business workshop series, business planning tools, and more.
Futurpreneur Canada also hosts entrepreneurial events where business owners can network with other young entrepreneurs and industry professionals. Besides their core startup program, the organization also offers funding for indigenous and black entrepreneurs.
How to Apply:
Fill out the form on the program’s website to apply for funding. You’ll also have to submit your business plan. An in-person interview will also be scheduled as a part of the application process.
5. Community Futures Peterborough
Eligibility: Canadian tech startups in Kawarthas or Peterborough regions
Amount: Up to $300,000
Community Futures Peterborough is a non-profit organization that offers tech startup funding and business counseling. To date, the organization has loaned over $42 million to more than 1,300 companies.
Tech businesses can get three types of loans from the organization.
- Inventory Loan: With interest rate of Prime + 2%, the inventory loan has a repayment period of 18 months. You can get up to $10,000 through this loan.
- Micro Loan: The micro loan can be funded up to $20,000 and has the same interest rate as the inventory loan. Its repayment period is up to 48 months.
- Expansion Loan: The expansion loan offers up to $300,000 at a Prime + 2% interest rate and a repayment period of up to 120 months.
For businesses that need more than $300,000, the organization partners with other institutions to provide additional funding.
How to Apply:
Before applying, businesses can schedule a meeting with a business consultant for free to find the best solution. They can then guide you on the application process.
6. FedDev Ontario
Eligibility: Businesses in southern Ontario with at least 5 full-time employees and 3 years of business operations
Amount: Up to $10 million
The Federal Economic Development Agency for Southern Ontario provides no-interest loans of $125,000 to $10 million per project to businesses in the region. In tech, the organization is looking for projects in artificial intelligence, medical technologies, agri-tech, digital health, and cybersecurity.
How to Apply:
Download the application form to your computer. Then, follow the details on the organization’s website to submit your application accordingly.
Additional Sources
Here are some other options for tech businesses seeking funding in Canada:
7. National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP): The NRC-IRAP funds small and medium-sized businesses for research and development projects in technology and innovation. Call the program at 1-877-994-4727 to learn if your business is eligible.
8. Kawartha Lakes CFDC: Local businesses in the Kawartha Lakes region can apply for loans of up to $300,000 from the Kawartha Lakes CFDC if they cannot secure traditional financing. Apply here.
9. Business Benefits Finder: The Business Benefits Finder tool from the Government of Canada helps businesses find funding, counseling, mentoring, and other support programs in their region.
10. Grant Finder: Fill in the relevant details and get a customized list of government grants for your tech business using this tool.
Accelerate Your Success Today
Securing funding for your business is the first step; the next is to use it wisely. Many businesses struggle to manage their finances effectively, leading to failure even with a strong initial investment.
With Argento CPA’s team of business coaches, expert accountants, and advisors by your side, you achieve the right blend of strategic growth solutions and financial clarity to sustain and scale your business. Our insight and assistance help maintain your financial health, allowing you to grow without worrying about cash flow issues.
Book a free strategy call to learn more.