Starting a business as a newcomer to Canada: funding and support

Newcomers starting a business in Canada can get help from settlement agencies, business support organizations and community lenders, many of which offer free training, mentoring and small loans to people building a credit history here. Many general start-up programs are open to newcomers too, but each one sets its own rules about immigration status, so check the program page before you apply. Start with the programs for newcomers and the funding check.

Why is it harder for newcomers to get business funding?

Most lenders and many programs look at your history in Canada, and a newcomer may have little of it yet. Common hurdles:

• No Canadian credit history. Credit from another country usually doesn't carry over, so banks may see you as a new borrower.
• No Canadian business record. Lenders often want to see revenue or time in business here.
• Status rules. Some programs are only for citizens and permanent residents; others also accept people with other kinds of status.
• Unfamiliar rules. Business registration, sales taxes, licences and permits work differently from province to province and city to city.

None of these rules you out, but they shape where to start. Support organizations exist largely to close these gaps.

Where can newcomers find business support?

• Settlement agencies. Many offer entrepreneurship workshops, or can refer you to someone who does. They can also help with documents and applications.
• Small business centres. Local centres give free advice on registering a business, writing a plan and finding programs. In Ontario, Small Business Advisory Centres also deliver Starter Company Plus.
• Community lenders and microloan programs. Some community organizations lend small amounts to people who can't yet borrow from a bank, often with coaching.
• Professional and cultural associations. Groups from your field or community can connect you with mentors, customers and suppliers.
• Libraries. Many public libraries offer free business databases, workshops and quiet space to work.

The advisers in these places often know about local programs that are hard to find online.

Which general programs can newcomers use?

Newcomers can apply to any general program whose rules they meet. A few to look at:

• Futurpreneur, start-up loans with mentoring for young entrepreneurs. Check its status and age rules on the program page.
• Starter Company Plus, Ontario training, mentoring and a grant for new business owners. Check who qualifies on the program page.
• The BDC online small business loan, for businesses that already have revenue and some time in operation, so it fits later rather than at the very start.
• Hiring programs that pay part of a new employee's wages, once you are ready to hire; see wage subsidies and hiring programs.

If you also belong to another group, programs set aside for women, youth, Black or Indigenous entrepreneurs may apply as well. A set-aside is an extra option, never a limit. See funding for young entrepreneurs, funding for women entrepreneurs and funding for Black entrepreneurs.

How do I check a program's status requirements?

Status rules are among the most common reasons an application is turned down, so check them first.

1. Find the eligibility section on the program page. Look for words like citizen, permanent resident, protected person, work permit or resident of the province.
2. Check who the rule applies to. Some programs look at the owner, some at the business, and some at both.
3. Look for residency rules too. Many provincial and city programs require that you, or the business, are based in that province or city.
4. Ask if it isn't clear. Contact the program or ask a settlement agency to help you read it. The guide to reading eligibility rules explains common wording.

Each program defines these terms its own way, so don't assume one program's rule applies to another.

What should I do first?

1. Register the business the way that fits you, as a sole proprietor or incorporated, and get a business number. A small business centre can help you choose.
2. Start building Canadian credit with a bank account and a credit card you pay in full.
3. Write a short business plan with a cash flow forecast. Advisers can review it for free.
4. Look at the start-up topic and the guide to funding to start a business.
5. Don't spend before approval. Many programs won't cover earlier costs; see apply before you spend.

Frequently asked questions

Can I start a business in Canada on a work permit?

It depends on your permit and situation; some permits limit self-employment. Ask an immigration professional, and check each program's status rules on its page before you apply.

Are there grants just for newcomers starting a business?

There are some programs and organizations that support newcomer entrepreneurs, mostly with training, mentoring and small loans rather than grants. See small business grant myths and the difference between grants, loans and tax credits.

Does my credit history from another country count?

Usually not with Canadian lenders. Community lenders and start-up programs may look more at your plan and experience. Start building Canadian credit as soon as you can.

Do I need to be a permanent resident to apply?

For some programs, yes; others accept other kinds of status. Each program sets its own rule. Check the program page.