Funding to start a business in Canada: what really exists

Most funding to start a business in Canada is not a grant. It is start-up loans, mentoring, training, programs set aside for particular groups, and supports for people moving into self-employment, with only a few small grants, usually tied to training. Expect to combine your own savings with a loan and free advice, and check what fits your situation before you commit to anything.

This guide sets out what really exists, who offers it, how to prepare and what to avoid. Each program we name has its own page with its current status, amounts and rules, so check the program page before you plan around it.

Are there government grants to start a business?

Very few. Most grant programs for businesses want an operating track record: a few years in business, staff, revenue and a defined project such as exporting or hiring. A brand-new idea rarely fits those rules.

The start-up grants that do exist tend to be small, local and paired with training or mentoring. In Ontario, for example, Starter Company Plus offers training and mentoring through Small Business Enterprise Centres, with a grant for some participants who complete it. Summer Company does something similar for students who run their own summer business.

If someone promises a large "start-up grant" for any new business, be careful. Read our post on small business grant myths and how to spot a grant scam.

What kinds of start-up funding are there?

Here is what most new business owners actually use. Our post on grants, loans and tax credits explains how each type works.

• Personal savings and family. Almost every lender expects you to put in some of your own money. It shows commitment and lowers the risk.
• Start-up loans with mentoring. Some lenders pair a loan with a mentor, which is often worth as much as the money.
• Community and Crown lenders. A Crown corporation such as BDC, and local community lenders, lend to small businesses that may not fit a bank's usual rules.
• Training-linked grants. Small grants paid after you finish a training or mentoring program.
• Set-aside programs. A set-aside program is reserved for one group, such as women, Indigenous, Black, young or newcomer entrepreneurs.
• Self-employment supports. Some provinces help people who are out of work start a business, often through employment services. Ask your local employment centre what is offered where you live.
• Free advice. Local business centres, libraries and economic development offices offer workshops and one-on-one help at no cost.

Which start-up programs should I know about?

Futurpreneur

Futurpreneur is a national non-profit that offers start-up loans and mentoring to young entrepreneurs who are starting or buying a business. You work with a mentor as well as getting financing. Check the program page for who qualifies and how the loan works.

Starter Company Plus (Ontario)

Starter Company Plus is an Ontario program for people starting or growing a small business. It is delivered through local Small Business Enterprise Centres and combines training, mentoring and, for some participants, a grant. Find out more in our guide to funding in Ontario.

Summer Company (Ontario)

Summer Company helps Ontario students start and run a summer business, with mentoring and funding. It is a good first step for students who want to test an idea. See also the post on funding for young entrepreneurs.

BDC

BDC is a federal Crown corporation that lends to Canadian businesses and offers advice. Its online small business loan is meant for businesses that already have some revenue and time in operation, so it often fits a little after launch rather than on day one. Check the program page for the current rules.

Programs for particular communities

Several programs focus on entrepreneurs who face extra barriers to financing:

• the Aboriginal Entrepreneurship Program, delivered through Indigenous financial institutions;
• the Black Entrepreneurship Program, including a loan fund;
• organizations funded through the Women Entrepreneurship Strategy Ecosystem Fund, which offer training, mentoring and support to women entrepreneurs.

Read the posts on funding for women entrepreneurs, Indigenous entrepreneurs, Black entrepreneurs and newcomers starting a business, or browse the pages for women, for Indigenous people, for Black entrepreneurs, for youth and for newcomers.

How much of my own money do I need?

There is no single answer. Each lender and program sets its own rules, and many expect you to cover part of the start-up costs yourself. Lenders also look at your credit history, your experience and how realistic your plan is.

A practical way to think about it:

1. List every start-up cost: equipment, inventory, rent, licences, insurance, a website and a few months of living costs.
2. Mark which costs you can pay yourself and which you need to borrow.
3. Check which costs a loan or program will actually cover. Our grant project budget guide shows how funders think about eligible costs.

How do I prepare before I apply?

Start-up lenders and programs ask for much the same things. Getting them ready early saves weeks.

• A business plan. What you sell, to whom, at what price, and how you will reach customers. Many programs help you write it.
• A cash flow forecast. Month by month for at least the first year, showing when money comes in and goes out.
• Your legal structure. Decide whether you'll be a sole proprietor or incorporated. Some programs accept only one or the other.
• A business number. You get a business number from the Canada Revenue Agency when you register. Many programs ask for it.
• Your story. Why you, why now, and what experience you bring.

Use the grant application checklist and read how to write a grant application. If the rules are confusing, our guide on how to read eligibility rules explains the usual terms.

What help is there after launch?

Once your business is running and has some history, more doors open:

• Hiring help. Wage subsidies such as Canada Summer Jobs help you take on staff. See the guide to wage subsidies and hiring programs.
• Going digital. Some programs help you adopt new tools. See funding to go digital.
• Exporting and growth. Read export funding for your first market and the complete guide to small business funding in Canada.

Browse the start-up topic page, the growth topic page and the provincial pages for British Columbia and Ontario. Our guide to funding in British Columbia covers what is on offer there.

How do I avoid start-up funding scams?

New owners are a favourite target. Walk away from anyone who:

• charges a fee to apply or to "find" grants for you;
• guarantees approval or a set amount;
• contacts you out of the blue and pressures you to act now;
• uses government logos or claims to be government.

See our scam tips. CanGrant is independent and free; we don't take applications, and each program page links to the funder.

Frequently asked questions

Can I get a government grant to start a business with no money?

It is unlikely. True start-up grants are rare and usually small, and most lenders expect you to put in some of your own money. Start-up loans, mentoring and training programs are more realistic. Run the funding check to see what fits.

Is Futurpreneur a grant or a loan?

Futurpreneur offers start-up loans, which you pay back, along with mentoring. Check the program page for who qualifies and how repayment works.

Do I need a business plan to get start-up funding?

Almost always. Lenders and programs want to see what you'll sell, to whom and how the numbers work. Many start-up programs, including training programs, help you write one.

Can students get funding to start a summer business?

In Ontario, Summer Company helps students start and run a summer business, with mentoring and funding. Other provinces and communities may have their own programs; check the youth page.

Should I incorporate before I apply?

Not necessarily. Some programs require an incorporated business and others accept sole proprietors. Read the program's eligibility rules first, and get advice on which structure suits your business.