The Southern Ontario Fund for Investment in Innovation (SOFII), a new Canadian government funding program, was first showcased in a blog in early July. FedDev Ontario announced that this $20M investment, funded by theirProsperity Initiative, would support SME’s across Southern Ontario. The Canadian Government Funding program is divided into two regional areas with involvement of the Community Futures Development Corporations (CFDC).
The primary initiative of this funding for small business is to support the growth of knowledge-based industry and manufacturing businesses through loans addressing all aspects of innovative business challenges. SOFII will look at funding based on each unique job created. This Canadian government funding program’s objective is to:
- Foster creation of jobs
- Improve competitiveness
- Increase market penetration
- Ensure stability in participating companies
These repayable loans are intended to help finance:
- Late stage commercialization;
- New product or service development;
- New applications or markets; or
- Development or implementation of new processes or technologies
Eligible Industry Sectors:
- Pharmaceuticals, telecommunications, health biotech, new materials, information technology, medical equipment and software
Qualified innovative projects must demonstrate growth needs and create job opportunities in the region. Projects must be in the implementation or late-development stage. Businesses under threat may be eligible and will be assessed accordingly.
During the fund’s first two years, this Canadian government funding program will provide loans from $150,000 to a maximum of $500,000 with a risk assessed term loan agreement. These loans are expected to help grow 80 Southern Ontario SMEs and create or maintain over 700 full-time jobs. By administering a risk assessment, the appropriate interest rate will be decided and may range from 5-12%. Companies must contribute a minimum of 33% of the total loan amount in equity, internal cash flows, other loan products or capital previously invested. Additionally, amortization periods will range from 3-10 years with average term estimated at 6 years. The SOFII loan product for businesses provides more options to SMEs that have not secured Angel or venture capital investments and continue to foster early revenue stability to be generated.
Eligible applicants for this government funding for business must be of the private sector knowledge-based industry or manufacturing sector operating in Southern Ontario. Approved projects must result in the adaptation or adoption of new technologies, processes and development of skills that enhances business productivity or commercialization of a new product or service. Eligible organisations for this government funding for business must meet the following criteria:
- Project driven growth opportunity to add an increase in payroll of minimum 30% or a strong chance of reaching 50 employees with the term agreement but less than 500 employees
- Establish expectation of economic viability
- Demonstrate ability to repay loan
- Secured participation of other financial support
- Demonstrates projects will provide either late stage commercialization, new product or service development, development or implementation of new processes or technologies, or new applications or markets
Approved projects will be a balance between equity and personal strengths of the individual management team.
SOFII small business funding program supports job creation in both rural and urban areas. There is a two-stage process to apply for the Southern Ontario Fund for Investment in Innovation that includes a self-determination process and pre-qualification process. If you are interested in gaining support with assistance of these applications, I encourage you to contact one of our Canadian Government Funding Experts. Please be sure to follow us onFacebook or Twitter to receive frequent updates on these Canadian government funding programs.
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