How governments view funding applications
Understanding how governments view financing applications is crucial to maximizing your chances of obtaining assistance. Eligibility criteria vary according to a company's stage of life (start-up, expansion, etc.), sector of activity and location.
It's not easy to give an example, but let's try to summarize: let's imagine a project where a customer needs $6 million for an expansion. The financing package could include a $3 million loan from Investissement Québec, with a capital vacation for the first year, enabling the company not to repay the capital immediately and thus preserve its cash flow. In addition to this loan, a further $1.5 million could come from a private financial institution, $400,000 from a local organization in the region, and $1.1 million or 18.5% of the total amount would be provided by the customer in the form of a down payment. Such a combination spread the risks and financial burdens optimally, while maximizing access to the funds needed for the project.
It is therefore essential to structure these financial packages properly, including various sources of financing to meet the specific requirements of each project. This approach ensures not only financial flexibility but also long-term stability for the company.
The process of obtaining financing
Preparing a solid financing file is a decisive step. It is important to detail the company's needs and objectives.
Let's imagine another typical case: an SME in the technological innovation sector is seeking financing to develop a new product. The company needs $180,000 in working capital. The financing package could include a 10% direct investment by the company, a shareholder loan representing another 10%, and the remainder financed by government grants and institutional loans. This financial package would enable the company to launch its product on the market without delay, which is always good for the order book.
This type of project requires good preparation and presentation to maximize the chances of acceptance.
Financial assistance programs
Financial assistance varies according to sector and location. Hence the importance of building strong relationships with regional advisors, who can offer valuable support and information on available programs.
For innovative sectors, programs include tax credits for research and development (R&D), grants for innovation projects, and support for the commercialization of new technologies. Take the case of a company in the hydrogen sector: it received a grant covering 50% of professional fees for technological development and product improvement. This support enabled it to speed up its research and launch a new line of innovative products on the market.
In the agri-food sector, grants include subsidies for production, food processing, distribution and marketing. Let's take the example of a project in a remote region where a snack bar, located in a tourist area, was financed by local programs with support for the next generation of entrepreneurs. The funding covered the takeover of the business by a new generation, underlining the importance of local and regional support in areas with high tourism potential.
Planning and strategy
Planning is a crucial step in accessing financial aid. It is absolutely essential to prepare a business plan including a market study, financial forecasts, a sound commercial strategy and a detailed budget, if you are to succeed in obtaining financing for your working capital.
Challenges and solutions
There are several common challenges in writing financing proposals, such as the absence of a clear strategy or poorly drafted documents. Entrepreneurs often focus on presenting their product or service without developing an overall strategic vision that includes crucial elements such as a business plan, market research and detailed financial forecasts. This approach can make projects less attractive to investors and financial institutions.
Another challenge is the complexity of specific eligibility criteria and requirements for different funding programs. Entrepreneurs can feel overwhelmed by the amount of information and the different steps involved in putting together a complete and convincing dossier.
For existing businesses, to overcome the complexity of the information to be provided, it is essential to rely on a complete, well-structured strategic plan. Expert support can also help navigate the maze of assistance programs. In all cases, entrepreneurs must be prepared to invest time and resources in preparing their dossiers, and to seek expert advice to maximize their chances of success.
Conclusion
Financing is a key lever for the development and sustainability of SMEs in Quebec. By understanding how different levels of government evaluate financing applications, preparing a solid business or strategic plan, and taking advantage of the various assistance programs available, companies can overcome financial challenges and seize opportunities for growth.
The key to success lies in rigorous strategic planning and building strong relationships with regional advisors and financial institutions.
By investing time and resources in the preparation and presentation of their business cases, and surrounding themselves with experts to guide them, Quebec SMEs can not only overcome financial obstacles, but stabilize their financial situation in the short term, ensure their long-term growth and thus prosper in a competitive economic environment.
To find out more :
Financing: the search for winning financing
