Canadian Business Financing: Grants and Loans for Young Entrepreneurs in Canada
By Katherine Rizzi | February 1, 2016
This article was updated on February 1, 2016.
Accessing capital can be a frustrating process for young entrepreneurs. Banks are low risk lenders, and quite often young entrepreneurs are not able to meet the qualifying criteria for traditional loans. As a result, governments and organizations in many provinces offer secured loans, or possibly even grants, to qualifying young entrepreneurs.
Some programs address one of the key concerns when lending to young entrepreneurs - the lack of experience and business skills - as a part of their loan programs. For example, the Business Development Bank's loan program for young entrepreneurs includes a training component that the entrepreneur must pay for in order to secure a loan.
The following table lists Canadian grant and loan programs for young entrepreneurs. Click on a province or region to link directly to information on that area, or scroll through the list for an overview of what is currently available in Canada. In addition to these loans, young entrepreneurs should also investigate industry-specific grant and loan programs.
Grants and Loans by Region:
Youth Entrepreneur Award of Distinction
The nominee(s) must be between the ages of 18 and 35. The Youth Entrepreneur Award recognizes outstanding achievement by young entrepreneurs. The award is given to the business that best exemplifies the qualities of effective leadership, innovatively applied know-how, and excellent potential for growth; that shows a high level of social, cultural, and environmental awareness and a demonstrated commitment to the wider community; and that engages in continuous learning or other improvement opportunities designed to advance the economic, social, and environmental prospects of the enterprise.
Although not a traditional grant or loan to start a business, the Alberta Youth Entrepreneurship Camp is a week-long camp for youth ages 13-15 who are interested in learning about business and entrepreneurship. Campers will spend the week learning about marketing, advertising, and writing a business plan, as well as spend the week setting up their own business using real money which they will borrow from actual bankers.
This loan program is administered through the Alberta Community Futures Centre West and offers up to $3000 for youth to start and run a summer business. Applicants must be full time students between the ages of 16 and 24. The funds must be used for the operation of a business during the summer months. The loan is interest free for the first three months.
Business Start Program (BSP)
Business Start is designed to promote the success of new business start-ups by ensuring that entrepreneurs have fully researched their ideas by means of a comprehensive business plan, by offering business training and counselling, and by providing access to funding through a loan guarantee.
Designed to encourage Manitoba's young people to start their own full-time businesses and pursue self-employment as a career choice. Applications are accepted on a year-round basis from Manitoba youth aged 18 to 29 years. Under the Young Entrepreneurs program, approved applicants will be eligible for a grant to cover 50% of your start up costs for up to $4000 to help young entrepreneurs with a business idea. Part of the application requirements for this grant ask that you submit your application BEFORE the venture is operational. You must also provide a business plan showing the viability of the venture.
This is a coalition of service providers that are working together to encourage Aboriginal youth to start or expand a business in Manitoba. Although the program has no direct grants or loans, it acts as a directory to help Aboriginal youth find the resources to access funding ad information.
This program is for young entrepreneurs who have a technology-driven business idea. TechFutures offers a grant of up to $3000 (non-repayable), in addition to a "start-up skills" workshop where attendees will receive training and business counselling. You must be between the ages of 18 and 34 to apply, with a technology-related product or services that is not yet commercialized.
This program gives money to non-profit organizations for projects that: a) educate youth about being an entrepreneur; and b) encourage unique, innovative and collaborative initiatives that promote a culture of entrepreneurship among young Ontarians. You may apply for a loan for either an entrepreneurship event (a loan of up to $15 000), or an entrepreneurship initiative (a loan of up to $50 000). Conditions apply so be sure the check the website!
Young Entrepreneurs Program: Summer Company
This program could get you up to $3000 to help you start and run a summer business. The Summer Company program is for current students, between the ages of 15 and 24, who are returning to school in the fall. Summer Company provides start-up money to help you kick off a new summer business. The program will connect you with local business leaders who will offer advice and mentorship to help you get the business up and running.
Northern Ontario Young Entrepreneur program
All residents of Northern Ontario, 18 to 29 who are planning on starting their own for-profit business in the North are eligible. Generally, funding does not have to be repaid and may cover up to 85 per cent of eligible costs, to a maximum of $25,000 per project.
As a young entrepreneur, you may be eligible for funding of up to $5000 and business skills training to help you start or expand your business. This program is for young adults between the ages of 18 and 29 who are not attending school full time. Start Company can also connect you with a business advisor for one-on-one guidance, mentoring from a local entrepreneur, and training through various business workshops. In order to be eligible, you must be able to contribute 25% of the grant in cash or in kind.
This program is in partnership with various participating organizations and communities, so be sure to check the website for the list of participating organizations. The Strategic Community Entrepreneurship Project is targeted to young entrepreneurs between the ages of 15 and 29. The program will provide funding of up to $3000 as well as business skills training to help you start a business. The training includes seminars, workshops, learning modules, and resource guides. Additionally, you will be given access to mentoring, business coaching, and other self-employment training.
This funding program is particularly interested in funding opportunities for youth who have participated ibn collage or university-based accelerator programs or who are currently enrolled in a Regional Innovation Centre Program. (However, important to note that the this is not a mandatory requirement of the program if other qualifications are met). Funding available from this program is a maximum of $250 000! This program is funded through MaRS. Be sure to check the website for the list to requirements.
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If you are between the ages of 18 and 35 and want to start up your first business, you may be eligible to obtain financial assistance through the Jeune Promoteurs program. There are three potential components to the program where you could receive funding: Component 1 - receive 75% of your expenses to carry out a feasibility study for a business plan; Component 2 - if you have a business plan and you will be creating at least two jobs, you could have 50% of your expenses covered; Component 3 - funding to receive entrepreneurial training that is relevant to your business plan, as well as access to assistance that could cover all of your eligible expenses.
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Small Business Loan Guarantee Program (SBLGP)
Provides loan guarantees to businesses in targeted sectors of the economy to stimulate capital investments for small business start-up and expansion. Program options include term loan guarantees, working capital loan guarantees for start-up businesses and working capital loan guarantees for existing businesses.
Student Entrepreneurship - SEED
The Student Entrepreneurship loan is for those full-time students returning to school in the fall who are at least 16 years old. You could receive an interest-free loan of up to $3000 to start your own summer business. If you are able to pay back your loan in full by October 15th, you could get 1/3rd of it back!
The Students in Business program can provide an interest free $5000 loan for you to start your own business, along with training and counselling. Applicants must be between the ages of 15 and 34 and planning to attend high school or a recognized post-secondary establishment. You also must have lived in Nova Scotia for 6 consecutive months.
This program is funded through the Saskatchewan Indian Equity Foundation Inc. This i a four year program for Aboriginal youth who are interested in a livestock operation. Services of the program aim to help youth build equity by providing financing, training, and support. Loans are given to purchase a livestock herd, as well as help develop skills in livestock production and business management. To apply, you must be a First Nations youth between teh ages of 15 and 29 and able to 10%-15% cash equity.
Youth Investment Fund
The Youth Investment Fund provides financial support to short term projects aimed at youth. These programs should promote self-esteem, encourage development of positive lifestyle choices, or create social or recreational opportunities. You must be under 19 to apply. Groups can apply for up to $5,000 twice yearly or up to $500 at any time.
SEED Capital Program
Seed Capital and Counselling Program-or-1-800-668-1010
- up to $20,000 for residents of Atlantic Canada and between the ages of 18 and 29 inclusive (applicants under the age of 19 require the co-signature of an adult); see site for detailed criteria- for young entrepreneurs in New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island
SEED / Student Entrepreneurship
Up to $20,000 for residents of Atlantic Canada. Applicants must be the majority owners of their businesses. Applicants under 35 years of age may use the loan to start-up, expand or modernize a business. Applicants 35 years of age and older may use the loan to start a new business only; see site for detailed criteria - for young entrepreneurs in New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island.
If you are between the ages of 18 and 39 and have lived in Canada for less than 60 months, you can apply for loan of up to $15 000 to help you start a business (or up to $45 000 if you have a Canadian credit history). This loan is repayable over 5 years, with interest-only payments in the first year. This program will also connect you with a mentor who can help you learn about doing business in Canada, including creating a business plan. Although the program is open to applicants between the ages of 18 and 39, those who are 35-39 will be evaluated on a case-by-case basis.
This program is for young entrepreneurs across Canada who want to start a business. If you are between the ages of 18 and 39 and are a Canadian resident with a good business idea, you could get $15 000 to help you start and run your business. Additionally, if you qualify, you can also apply for a subsequent loan of $30 000 through the Futurepreneur Canada-BDC Start Up Program partnership.
There are two options for funding support through the BDC's Young Entrepreneurship program. You can apply online for start-up financing to help you start your business. To apply for this financing option, you must be in the start-up phase of your business or within the first 12 months of sales.
A second option for funding offered through the BDC program is a small business loan for young entrepreneurs, where you can receive up to $50 000 to support your business. To apply for this loan your business must have been in operation for at least 24 months and you must be a Canadian citizen or permanent resident and reached the age of majority in your province.
The BDC Young Entrepreneur Program also provides business coaching and marketing workshop services.
Aboriginal Veterans Scholarship Trust
The scholarships support Aboriginal students who are pursuing post-secondary education in all areas related to economic development and self-government, such as technology studies, business, sciences, law and education.
This funding opportunity is for young entrepreneurs with a social or environmental goal. You may be eligible for loans up to $25 000 to start or grow a business. Loans range from $1000 to $10 000, with the option of an additional $15 000 from a partner organization. To apply for this loan, you must be between the ages of 18 and 29 and running a for-profit OR non-profit social enterprise. Your business must also be working toward achieving social or environmental goals.