Canadian SMEs are paramount to Canada’s economic performance as they employ over half the nation’s workforce and make significant contributions to Canada’s GDP. Innovation is critical to the growth of Canadian SMEs, allowing them to create high-value job opportunities and shape a prosperous economic future in any community. With these realizations, FedDev Ontario has recently released a new $20-million Canadian government funding program called the Southern Ontario Fund for Investment in Innovation (SOFII). This government loan will help develop 80 Southern Ontario SMEs and create over 700 full-time jobs.
SOFII: SME Growth via Loan Funding for Small Business
FedDev Ontario’s Prosperity Initiative will be funding the Southern Ontario Fund for Investment in Innovation (SOFII). The FedDev Ontario Prosperity Initiative encourages businesses in Southern Ontario to undertake projects that will result in a more competitive and diversified economy. SOFII has been designed as a loan program that will be administered by Southern Ontario’s two regional Community Futures Development Corporations (CFDC): the Western CFDC Association and the Eastern CFDC Network Incorporated. SMEs are now able to tap into $150,000 to $500,000 in government loans to help finance late stage commercialization, new product or service development, new applications or markets, or the development or implementation of new processes or technologies. The interest rate on these loans range from 8% to 12% for most projects, however lower rates may be possible in some cases.
Canadian Government Funding SOFII Eligibility
This funding for small business program will act as a catalyst for innovation. The program’s main initiative is to support the growth of knowledge-based SMEs through repayable funding, leading to job creation, competitive advantages, and market penetration. Eligible companies must be incorporated for a minimum of 3 years and have 50-500 employees or possess a strong possibility of reaching 50 employees through the loan. Companies must be operating in Southern Ontario and must demonstrate economic viability and the ability to repay the loan. Businesses should be located in communities that are going through long-term vulnerabilities due to economic factors.
Funding for Small Business and Start-Ups Opportunity
In addition to SOFII, other government loans are available to help businesses grow. Companies that employs fewer than 50 people may be eligible for loans under the Investing in Business Innovation (IBI) program, which has committed $190 million in accessible government loans to SME’s through 2012-2014. This Ontario government funding program helps assist start-up businesses located in Southern Ontario to commercialize new products, processes or practices and leverage angel or venture capital investments. Investing in Business Innovation (IBI)provides up to $1 million in repayable funding for a maximum of 33% of total eligible costs and must possess an investment worth 66% of eligible costs from a VC or angel investor. The not-for-profit angel investor networks are eligible for a non-repayable one-time contribution of $50,000 per network to support investment attraction and development activities. Incorporated not-for-profit angel investor networks must be located in Southern Ontario and registered with the National Angel Organization.
Additionally, organizations may be interested in the Canadian Small Business Financing Act (CSBFA), aimed at start-ups with revenues less than $5 million. The CSBFA provides loans up to 90% of the cost of eligible purchases or range from $350,000 to $500,000 with the loan interest rate not exceeding 3% above lender’s prime lending rate.
Mentor Works Ltd.: The Canadian Government Funding Experts
The Ontario-based company, Mentor Works Ltd., specializes in helping small businesses find proper funding to help solve their business challenges. Bernadeen McLeod is the principal behind the company and has worked in the corporate arena for 20 years as an executive and general manager in the manufacturing sector. With considerable expertise in government funding, both on a federal and provincial level, Bernadeen has secured grant funding and low interest loans for SMEs. If you would like to learn more about the Canadian business grants and loans for small businesses, please check out the Mentor Works Canadian Government Funding Blog, sign-up for our Weekly Grant Funding for Business E-Newsletter and be sure to visit our website athttps://www.mentorworks.ca.