Small business grants are funds provided to start or expand a qualifying small-to-medium-enterprise (SME) that do not need to be paid back. This, of course, is their essential difference from small business loans, which do.
But although small business grants don't need to be paid back, it would be wrong to think of them as free money. In many cases, small business grants require a financial investment by the applicant. (This may be why government literature almost never refers to small business grants but almost always, instead, to "non-repayable contributions".)
Small business grants are notoriously difficult to get. One reason for this is probably just their rarity. The main source of small business grants in both the United States and Canada is the federal government, and both government have much larger small business loans programs than grant programs.
Another reason small business grants are difficult to get is that they usually have very stringent requirements that applicants must meet. In Canada, small business grants are often only available to individuals of a certain demographic who reside in a particular place, as well as being tied to a particular condition of business or certain industry.
So, for instance if you are between 18 and 29 years of age, reside in Northern Ontario, and are planning on starting your own for-profit business in the North, there is a small business grant available, (of up to $25,000), the Northern Ontario Young Entrepreneur Program.
(See 7 Canada Government Grants Your Small Business May Qualify For and the Small Business Grants section of this website for more small business grants.)
I am not aware of a single grant for, say, a middle-aged man who wants to start a restaurant in Mississauga.
This isn't to say there are none, just to point out there are very few grants for retail businesses of any kind.
Generally, most people who are looking for money to start or expand a small business have a much better chance of finding and getting a small business loan than a small business grant. Whichever type of funding you decide to pursue, 10 Things You Need to Know About Small Business Funding will help you streamline your search for the money your small business needs.
