Choose The Right Financing Program For Your Business

Every growing business knows how difficult it is to balance expenses and revenues. Driving growth requires investment–and when the results are not forthcoming, the initial confidence can be replaced by ever-present pressure. 

As a growing company, Middle understands this reality very well. 

In this article, our team offers some tips on how to find the right financing programs to keep your company growing.

The art of choosing the right financing program

Every situation has a type of financing that works best. Whether you are a startup in the pre-commercialization phase or a growing company looking for talent, there are several financing programs available to you at every stage, and it is important to choose the right one to meet the issues that are specific to your company and your industry.

Financial support: Our suggestions

Our team has selected loan programs for you, as well as a coaching program.

Local Investment Fund (LIF) – MEI

Program description: The LIF aims to stimulate local entrepreneurship by promoting access to capital for the startup or growth of traditional or social economy businesses and to support the next generation of entrepreneurs.

Through the LIF, businesses whose objectives are in line with the orientations of the MRC’s investment policy can benefit from financial assistance in one of the following forms: loan; equity loan; loan guarantee; or other types of financing.

Targeted businesses: Traditional or social economy businesses and support for the next generation of entrepreneurs.

Process: Contact your MRC or the organization responsible for managing the LIF in your MRC.

Innovation Program – Investissement Québec

Program description: The program’s objective is to support businesses, primarily SMEs, in carrying out their innovation projects, whether the projects are carried out in Quebec or with partners located abroad. It also aims to provide financial support to private companies so that they can pool their efforts (mobilizing projects) to carry out a development project for an innovative product or process, by mobilizing universities, public research centers and SMEs.

Target companies: SMEs with mobilizing projects or innovative projects

Process: A company wishing to obtain financial support for the realization of its project must provide:

• A duly completed application form for financial assistance and attach a detailed description and financial package for its project
• Service offers and partnerships (if applicable)
• A copy of the francization certificate (if applicable)
• A copy of the Equal Access to Employment Program (if applicable)
• Any other document required by the nature of the project, including market studies and marketing plans.

Project Financing – Investissement Québec

Program description: No business can stand still, which is why entrepreneurs always have a head full of projects. Investissement Québec is there to help them bring these projects to life by providing them with appropriate financial support. This program offers: 

• Loans at competitive rates
• Loans in partnership with other lenders
• Loan guarantee: guarantee of repayment of the net loss incurred by the financial institution that grants you a loan, line of credit, letter of credit or any other short-term financial commitment
• Quasi-equity financing in the form of a debenture or subordinated debt.

Target companies: SMEs.

Process: Contact Investissement Québec.

Marketing and Export Support Program (PSCE) – Investissement Québec

Program description: The Marketing and Export Support Program has three components, each with distinct objectives.

Component 1: Strengthening the capacity of SMEs to commercialize their products and services on the Québec market, a first step toward exporting.

Component 2: Strengthening the export capacity of SMEs and accelerating their projects on markets outside Quebec.

Component 3: Support for large companies in their structuring projects on international markets.

Targeted companies: For-profit companies legally incorporated in Quebec or in Canada and having an establishment in Quebec as well as social economy companies and non-financial cooperatives. Businesses with sales of less than $100 million are eligible for Components 1 and 2, and those with sales of $100 million or more for Component 3.

Process: Companies wishing to obtain financial assistance under the Marketing and Export Support Program must :

• Complete the application form and provide all mandatory information required to process the application. Please note that: financial data from audited financial statements and, if applicable, consolidated statements for the last two years will be requested; any failure to answer a question or to provide a required document may result in the rejection of the application.
• Provide financial statements for the past two years (or projected financial statements for startups), as well as other documents required by the nature of the project. These documents could be, for example, the resume of a candidate for hiring as a market development specialist, proof of a formal commitment between the client and the company demonstrating that the project is supported and that it is integrated into the value/supply chain (Stream 1) or a copy of a service offer.
• The application form and supporting documents must be written in French, in accordance with the provisions of the Charter of the French Language, with the exception of: documents from sources outside Quebec; copies of correspondence.
• Hold a francization certificate or be in the process of obtaining one, if it has 50 or more employees, in order to comply with the provisions of the Charter of the French Language (RLRQ, chapter C-11, ss. 135 to 154).
• Undertake to implement an equal access program that complies with the Charter of Human Rights and Freedoms (RLRQ, chapter C-12), if it has more than 100 employees and the financial assistance awarded is $100,000 or more, as the company is then subject to the contractual obligation program.
• Behave ethically in a way that is not likely to tarnish, even by association, Investissement Québec’s image of integrity and probity.

FINANCING FOR SMALL BUSINESS GROWTH – Rise

Program Description: The Rise Small Business Lending Program provides access to low-interest business loans to start or expand your small business.

Target Businesses: Eligible individuals must: be motivated entrepreneurs, self-identify as someone who has experienced mental health problems and/or substance abuse issues; be unable to access traditional bank financing for their small business; not be in active bankruptcy, in arrears on child support or government taxes; reside in Canada; be a Canadian citizen or permanent resident.

Process: To apply, entrepreneurs must submit the following:

• An application for funding
• A business plan
• A one-year cash flow projection
• A curriculum vitae
• A credit report
• Supporting documents, if applicable.

Investment Fund – MTL SME

Program description: The Fonds PME MTL and the Fonds locaux de solidarité Montréal (FLS Montréal) support startups or developing businesses and ensure the maintenance of jobs in Montréal. The financing offered by PME MTL is a tool adapted to the reality of businesses. Financial assistance from PME MTL often allows access to other sources of financing.

Target businesses: The funds are intended for for-profit businesses, social economy businesses and cooperatives.

Process: To be eligible for a loan, a business must meet the following conditions:

• Be a Canadian citizen or permanent resident
• Be legally constituted and registered with the Quebec Enterprise Register (QER)
• Have its place of business in Montreal and have its head office in Quebec
• Submit a business plan or project summary, updated or projected financial statements and any other document deemed relevant
• Demonstrate the experience, knowledge and management skills of the entrepreneur
• Provide a minimum of 20% of the total cost of the project.

CanExport SME Program – Government of Canada

Program Description: CanExport SME is a financial assistance program designed to promote and strengthen Canada’s trade diversification efforts. It provides grants and contributions to Canadian companies to help them establish a presence in international markets where they have little or no commercial activity.

The program focuses on commercial activities to export existing products and services to new foreign markets. Activities that involve attracting investment or are related to a company’s ongoing operations in Canada, as well as activities related to the development, production and distribution of new products and services, are not eligible under the program.

Target companies: Each company must meet 5 essential criteria:

• Be a for-profit business
• Be a legal entity incorporated, a limited liability company or a cooperative in Canada
• Have a Canada Revenue Agency (CRA) business identification number*.
• Have fewer than 500 full-time equivalent employees (FTEs)
• Have reported annual revenues of $100,000 to $100 million in Canada in its last fiscal year (or in the last 12 months for monthly or quarterly filings).

Process:

Step 1: Select up to 5 international markets for which your company wishes to make sales or obtain new customers.

In your application, include the reasons for your target market choices.

Step 2: Confirm that each market selected meets CanExport SME’s definition of a new and eligible target market.

In your application, include your company’s total revenues and revenues for each target market for the last full fiscal year (or the last 12 months for quarterly or monthly reporting).

If you have selected sub-national markets, indicate the total revenue generated in the selected sub-national market.

Step 3: For each target market, establish realistic goals and submit a detailed action plan.

Your application must include a detailed business case for the project to proceed.

Step 4: For each target market, choose from the 7 categories of activities that support the achievement of your objectives. The combination will vary depending on the market requirements and your company profile.

In your application, verify that each of the suggested expenses is eligible by carefully reading Section 5: Eligible Expenses.

If your project requires travel outside of your target markets, clearly explain how this travel relates to your target markets.

Step 5: Submit a detailed and specific budget. Do not include activities that are “to be confirmed” or “to be determined”.

In your application, ensure that the total budget for your proposed activities is between $20,000 and $100,000.

For each planned trip, indicate the number of travelers and the number of days they are expected to spend on travel or business.

Step 6: Propose a realistic timeline for conducting your activities.

In your application, allow 60 working days from the date of your application to the scheduled date of your first activity.

Choose an end date that takes into account your company’s resources and the fact that companies can only have one active CanExport PME project.

MOMENTUM – MAIN COACHING SERVICE

Program description: The Momentum coaching service for high-potential innovative companies (formerly known as PMEit) aims to offer intensive, customized coaching to help young innovative companies in the commercialization phase move quickly into growth.

Designed by and for the Quebec incubator network and managed by MAIN, Momentum draws on the network and expertise of more than 50 incubators and support organizations to screen and coach companies across Quebec to improve their chances of success.

Target companies: 

• Companies headquartered in Quebec
• With an established business model based on an innovative product or service
• With strong growth potential (business model with scale potential)
• With credible market validation (sales, pre-orders, agreement with at least one customer, etc.)
• In the early stages of commercialization (sales of $2,000,000 or less)
• With at least 2 co-founders or full-time employees

Process: Eligible companies supported by a Momentum partner incubator are invited to contact their incubator to express their interest in the service and begin the process.

Companies that are not currently supported by a partner incubator can fill out the eligibility form below, and the MAIN team will follow up quickly. If they are deemed eligible, they will then be put in contact with a project incubator to develop their application. Afterwards, their application will be evaluated by one of the service’s evaluation committees. These independent committees are made up of experts, incubator representatives and entrepreneurs. Their objective is to improve the support plans and ensure that they are in line with the needs of the companies.