In collaboration with Bioenterprise, NorthBridge held an informational session on January 25 to provide insights on accessing government support.
Bioenterprise, a network focused on building collaboration across the agri-tech industry in Canada, offers several programs designed to boost innovation, encourage cooperation, and scale up businesses. The organization works with entrepreneurs, accelerators, and partners, including NorthBridge, to deliver funding and other resources to members.
Throughout the session, we discussed different types of support, including direct (grants and loans), and indirect (tax credits) support, and key considerations to keep in mind while applying for funding. Direct support typically focuses on future costs, with limited amounts of funding, where indirect support applications are completed for historical costs. Taking into consideration stacking rules and eligibility, companies have the ability to maximize the funding they receive through leveraging both SR&ED and grants/loans.
The process to applying for funding can be reduced to four steps: identify the opportunity and confirm eligibility, apply for funding, secure funding, and reconciliation once the project or milestones have been completed.
Tax credits, particularly SR&ED, are a valuable resource for any company undertaking R&D. Tracking SR&ED-eligible work throughout the fiscal year can facilitate the application process, by consolidating critical application information in advance.
While grants rarely cover the entirety of project costs, they are non-repayable, which can benefit companies looking to offset costs for a number of activities. Grants are sometimes industry-specific, and are often focused on either research and development, hiring, export activities, or expansion. Grants for agri-tech companies include OAFRI, CFIN, IRAP youth, CanExport, and the Ontario Agri-tech Innovation Initiative.
Contrary to loans received from banks or other lenders, government loans tend to offer favourable repayment terms, with low to no interest options, and sometimes partial loan forgiveness. Examples of loans available for agri-food innovation include the Strategic Innovation Fund, the Sustainable CAP programs AgriScience and AgriInnovates, and programs offered through Canada’s Regional Development Agencies.
When applying for either grants or loans, there are a few key considerations to keep in mind. Applicants should always keep program priorities in mind, as well as eligibility requirements. Additionally, as government support is usually designed to facilitate projects, but not replace traditional financing, companies will need to prove they have access to funds, and that the government assistance will have a significant positive impact on the project, whether in terms of quicker timelines, or increased hires. As direct support can involve long application processes and lengthy wait times, and because applications must be submitted prior to project start dates, advanced planning is necessary. Planning out project milestones, securing matching funds, performing market research, projecting revenue and job growth, and assessing risks can all be completed before the project begins.
Stacking can allow companies to access a combination of loans, grants, and tax credits, and allow for companies to access greater amounts of funding. Stacking limits are usually imposed by grant guidelines, meaning that the amount of government funding received cannot exceed a certain percentage of project costs, as defined by program requirements. Keeping these limitations in mind can help you determine which programs you want to apply to in addition to SR&ED.
Want to maximize your funding this year? Learn more about creating a government funding strategy, or get in touch to find new funding programs and get assistance with your applications.
Apply to Round 1 of Bioenerprise’s Grow Ontario Accelerator Hub to gain access to mentorship and support for business acceleration and innovation adoption.