How Business Grants Work: 4 Main Types of Business Grants

Why do governments, corporations, and non-profits have grant programs for entrepreneurs?

Grants are given to businesses to achieve a specific purpose.

In other words, granting organizations have a goal in mind when they set up a grant program.

Grant programs can be grouped into the following categories:

  • Activities
  • Audiences
  • Industries
  • Regions

In the following sections we describe each category:


Activity grants do exactly as they say: they fund specific business activities.

The goals of activity-oriented business grants are to:

  • Increase employment
  • Increase economic growth
  • Improve employee skills
  • Improve business efficiency

Let’s briefly cover the business activities that grant organizations typically support:


Hiring: These grants are meant to encourage businesses to create new jobs or retain existing ones. This is done to increase employment opportunities for specific demographic groups (e.g., students, recent graduates, underserved communities), regions (such as rural areas), industries (e.g., cleantech), and activities (e.g., technology adoption).

Hiring grants can cover up to 80% of a new employee’s wages for a specific amount of time.


Training: Grants for training are given to businesses to help them develop the skills and knowledge of their employees. This helps businesses to remain competitive and adapt to new technologies and changing market conditions.

Training grants typically cover 50% – 75% of training costs, but some grant programs cover fully 100% of training costs.

Research & Development

Research & Development: Grants for R&D are provided to businesses to support the development of new products, services, and technologies. This helps businesses to remain innovative and competitive in their respective industries.

Business Expansion

Business Expansion: Grants for business expansion are given to businesses to support their growth and expansion. These programs typically target specific types of activities to grow a business:


Exporting grants help businesses expand their reach beyond Canada and include support for market research, participation in trade shows, and other export development activities.

Equipment purchase

Equipment purchase (or lease) grants help businesses acquire the necessary tools and machinery to improve their operations and productivity, including the purchase or lease of new or used equipment, as well as upgrades to existing equipment

Technology adoption

Technology adoption grants allow businesses to purchase new technologies and digital solutions to improve their operations and competitiveness. Grants may cover the purchase of software and/or hardware.

Energy efficiency

Energy efficiency upgrades. Grants for energy efficiency upgrades help businesses reduce their energy costs, improve their environmental footprint, and stay competitive in a changing marketplace.


Some grant organizations provide grants to support specific demographic groups. The main goals of audience-oriented business grants are to:


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    • Provide support to groups that may face unique challenges in starting or growing a business
    • Promote diversity and inclusion across industries

    The groups that get the most grants include the following:

    Artist entrepreneurs

    Artist entrepreneurs: Grant organizations provide business grants to artist entrepreneurs to support the growth of the creative industry, which is an important sector of the Canadian economy. These grants are intended to help artists develop their skills, create new works, and promote their art to a wider audience.


    Farmers: Grant organizations provide funding to farmers to support the growth and sustainability of the agricultural sector. These programs are intended to help farmers adopt new technologies, improve their productivity, and develop new markets for their products.

    Indigenous peoples

    Indigenous peoples: Grants are provided to Indigenous peoples to support economic development in Indigenous communities. These grants are intended to help Indigenous peoples start or grow their own businesses, create jobs, and promote economic self-sufficiency.

    Young entrepreneurs

    Young entrepreneurs. Starting a business is challenging, and it can be even more challenging for young entrepreneurs who may have limited access to capital and business networks. Grants for young entrepreneurs can provide them with the support they need to develop their businesses and become successful entrepreneurs.

    Student entrepreneurs

    Student entrepreneurs. Like young entrepreneurs, student entrepreneurs face unique challenges in starting a business, including balancing their studies with their entrepreneurial pursuits. Grants for student entrepreneurs can provide them with financial resources and support to help them develop their businesses while still pursuing their education.


    Women: Grants for women are provided to address the gender gap in entrepreneurship and to support women-owned businesses. Women entrepreneurs face unique challenges such as limited access to capital, networks, and resources. These programs aim to provide women with the financial resources, mentorship, and training they need to start and grow their businesses.


    These grants are intended to help businesses in specific industries expand their operations and create jobs, which in turn benefits the overall economy.

    Some busines grants support specific industries. Here are the most popular:


    Agriculture/farming. Agriculture and farming are important sectors in Canada, and funding organizations provide grants to support the growth and sustainability of these industries. Grants are often used to fund research and development, improve infrastructure, and promote environmentally sustainable practices.


    Arts/media/entertainment. Funders recognize the value of arts, media, and entertainment in promoting culture and diversity, and in creating jobs and economic growth. Grants are often used to support artists, cultural organizations, and festivals, and to promote Canadian content and talent.

    Construction/Real Estate

    Construction/Real Estate. Grants are typically given to construction and real estate companies to support the development of affordable housing projects, to support sustainable building practices and reducing environmental impact, and to conduct research and development projects related to their industry.


    Manufacturing. Manufacturing is a large part of the Canadian economy, and both the federal and provincial governments provide grants to support innovation, productivity, and competitiveness. Grants are often used to fund research and development, upgrade equipment and facilities, and promote exports.


    Technology. Funding organizations recognize the importance of technology in driving innovation and economic growth. Grants are often used to support research and development, commercialization of new technologies, and to promote entrepreneurship and start-ups.


    While most grant programs are either Canada-wide or province-wide, there are some regions in Ontario that have special programs set aside for businesses with operations in the region.

    The goals of regional grants are to:

    • Increase jobs and economic growth in a specific region
    • Support areas of a province that have historically been (economically) neglected

    Northern Ontario is the region that has the most grants and other funding programs dedicated specifically to the region.

    There are also specific government agencies and centres responsible for supporting Northern Ontario development:

    If you live in a city in Ontario, these are the best organizations to ask about business funding:

    If you live in a rural area of Ontario, the best organizations to ask about business funding are CFDCs (Community Futures Development Corporations), which offer loans, loan guarantees, contributions, grants, equity investments and in-kind support.

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