Grants for July 2021

Why you should look closely on government loans?

Last week we announced the launch of two new Federal loans for businesses: the Jobs and Growth Fund and the Aerospace Regional Recovery Initiative (ARRI). However, many readers of our newsletter and blog were skeptical about them because they were not grants.

We see the trend across all levels of government that grants are being slowly replaced with interest-free loans. Given the tremendous amount of money the governments spent on fighting pandemic, we think that the business community should start getting used to government loans. We expect that they will replace many grants.

The good news, however, is that government loans have three key advantages:

  1. No interest.
    Although the interest rates are generally low, don’t get confused that there is no big difference between 0% and 5%. If you add up all the interest accumulated over the years, you will see significant savings if you apply for government loan.
  2. No collateral or personal security.
    As my banker friend jokes, the bank would have taken a first child as loan security if it was allowed to do so. The government doesn’t even demand your business assets or personal property as security.
  3. Flexible repayment schedule.
    The government loan is repaid over 5-7 years, and the payment schedule may be negotiated at the time of approval. Furthermore, in most cases, you don’t start repayment until after 12 months of the project completion. And the project may last 3-4 years.

I hope the above information helps to demystify some of the misconceptions about government loans.

Fill out the Eligibility Check form now, to make sure you don’t miss this funding opportunity http://www.fgwinc.ca/eligibility.

Fisheries and Aquaculture Clean Technology Adoption Program (FACTAP)

Amount: Up to 75% of eligible project costs (maximum of $1.0 million per year).

Get Started

Export Marketing Assistance (EMA) Program

Amount: Up to $30,000 or maximum of 30% of total eligible project costs over $100,000.

Get Started

Aerospace Regional Recovery Initiative – Aerospace sector recovery interest-free loan

Amount: up to 50 percent of eligible costs with up to 10 million per project.

Get Started

Jobs and Growth Fund

Amount: up to 50 percent of eligible costs with up to 10 million per project.

Get Started

What the new Canada Recovery Hiring Program is about?

As the economy reopens and most businesses return to pre-pandemic revenues, the Federal government will gradually phase out the Canada Emergency Wage Subsidy program (CEWS). The last eligible period ends on September 25, 2021. The % of the subsidy will gradually decrease month after month.

However, the pandemic did not impact all businesses equally, and some will continue to struggle for some time. This is exactly what the new Canada Recovery Hiring Program (CRHP) is for. CRHP will run until November 20, 2021. It is available for businesses that experienced at least a 10% revenue drop due to the impact of the pandemic compared to the previous periods. The rates of that subsidy will be fixed depending on the period.

If your business continues to struggle for the next few months, both CEWS and CRHP will co-exist, and you will apply for whichever gives you the maximum subsidy. The application is available on the CRA website, under My Business Account section.

Fill out the Eligibility Check form proactively at http://www.fgwinc.ca/eligibility, and we will contact you when the details of the above programs are announced.

No grant for equipment or building? No problem

It is not uncommon in the government funding universe that the grants for equipment or leasehold improvement come and go. Others depend on the location of your business and you only qualify if you are located in a remote or rural area. It is also extremely rare that the government pays for things like buying land or building.

One solution in this situation is to do nothing and wait for the government to launch the funding on day. But can your business afford to wait uncertain amount? Would you rather consider the alternative program?

In case of equipment, building or leasehold improvement, the alternative is the Canada Small Business Financing Program (CSBFP). This is not a grant though. This is a loan, 85% of which is guaranteed by the Federal government. If something goes not according to the plan, your business will only be liable for 15% of the loan amount.

The program works for both established companies and start-ups. It will also be soon modified, and the maximum amounts of the loan will be increased, so stay tuned.

We assist our clients with finding the right financial institution that offers this program, writing business plan to support the application, and collecting documentation.

Need help with other government funding programs but don’t know where to start or how to prepare an application?

Fill out Eligibility Check form at http://www.fgwinc.ca/eligibility to find out.