Implementing a new ERP system is a significant investment. On top of the software purchase and implementation cost, you also have to consider the time investment from your team to select your ERP software, re-engineer processes during implementation and learn the system.
Some companies find themselves in a catch-22 – they know they need ERP software to improve business performance and continue growing, but they don’t have the cash on hand to make it happen. Maybe this sounds familiar?
Luckily, the Canadian government has several grants and loan programs available to help small to mid-size businesses adopt new technology, with the goal of being more competitive in the market. Keep reading for details on the options available.
Funding for Technology Assessment, Implementation & Training
1. Canadian Digital Adoption Program (CDAP)
The Canadian Digital Adoption Program’s Boost Your Business Technology stream aims to help small and mid-size companies that require more sophisticated technology. You would work with a Digital Advisor to evaluate your current tech landscape and develop a digital adoption plan to help you increase competitiveness and achieve your business goals.
Funding available: The grant covers up to 90% of the eligible cost of the Digital Advisor’s services to create the digital adoption plan, with a maximum of $15,000 per company. With an approved plan, you would then be eligible to secure a 0% interest loan up to $100,000 from BDC (Business Development Bank of Canada) to implement the recommendations in your plan.
Who’s eligible: For-profit, privately owned business, incorporated federally or provincially, with 1–499 employees and annual revenue of at least $500,000 in one of the previous three tax years.
What to consider: This program is best suited for companies that know they need to improve their business processes but aren’t sure what technology they need and want assistance creating that plan. If you’ve already determined you need ERP software, forge ahead with your search and explore other sources of funding to support your implementation project.
2. Industrial Research Assistance Program (IRAP)
IRAP offers multiple sub-programs to help small and mid-size enterprises (SMEs) solve internal innovation challenges. The Digital Technology Adoption Program provides funds to cover labour and sub-contractor costs associated with technical and business innovation projects, like implementing ERP software.
Funding available: Grants cover 80% of direct labour costs and 75% of sub-contractor fees, up to $100,000.
Who’s eligible: Canadian for-profit SMEs that are incorporated, have less than 500 full-time employees and plan to pursue growth.
What to consider: IRAP runs Canada-wide from April 1 to March 31, so keep those dates in mind as you plan the timing of your ERP project.
3. Canada Small Business Financing Program (CSBFP)
Funding available: You can apply for up to $1 million in funds.
Who’s eligible: Canadian businesses with gross annual revenues of $10 million or less. Farm businesses aren’t eligible under this program.
What to consider: Approved financial institutions will approve and deliver the loans at their determined interest rates, which can be variable or fixed. You’ll also be charged a 2% registration that can be financed as part of the loan.
4. Ontario CME Technology Assessment Program (CME TAP)
The CME Technology Assessment Program is designed to help small and mid-size manufacturers in southern Ontario access customized technology assessments. Participants work with qualified experts to develop a plan to improve manufacturing productivity by implementing new technologies, including hardware, software and cloud solutions.
Funding available: Coverage for 100% of eligible project costs, up to $25,000.
Who’s eligible: Southern Ontario manufacturers with 16–499 full-time employees. Companies must be financially stable and can’t receive project funding from other government programs.
What to consider: This is a good avenue if you’re planning to work with a third-party to assess your current state and recommend new technology. You may be able to cover costs included in an ERP selection if you work with an ERP consultant on an RFP process.
5. Advanced Manufacturing and Innovation Competitiveness (AMIC)
The AMIC program provides financial support to advanced manufacturing SMEs across Ontario for capital equipment, technology adoption and skills development. Priority is given to projects that create jobs, help companies leverage new technology to further business growth and improve competitiveness.
Funding available: Projects can receive funding up to 15% of eligible costs. Interest-free loans up to 15% of funding (max of $5 million) are also available during the project period. The program also offers advisory services to help to support skills and talent, health and safety and environmental plans.
Who’s eligible: Ontario-based advanced manufacturing companies, with 10 or more employees and at least 3 years of financial statements. Companies must commit to invest at least $500,000 in their project and create or upskill 5 jobs.
What to consider: There are two application periods each year; a second period will be added later in 2022.
6. Ontario Automotive Modernization Program (O-AMP)
The Ontario Automotive Modernization Program is designed to support small and mid-size automotive parts suppliers in Ontario become more competitive and responsive to changing customer needs. Eligible projects include implementing advanced manufacturing software (like ERP) and training to improve processes and competitiveness.
Funding available: Up to 50% of eligible project costs, with a maximum of $150,000. Your business must contribute at least 50% of the project costs through your own funding.
Who’s eligible: Small and mid-size businesses in the automotive supply chain with a manufacturing location in Ontario. Eligible companies must have less than 500 employees in Ontario and less than $1 billion in global revenue.
What to consider: At least 50% of your total revenue must come from the auto supply sector and your project must align with O-MAP’s goals (e.g. increased revenue, lower costs). Details of the next application round will be announced in summer 2022.
7. Southern Ontario Business Scale-up and Productivity (BSP)
Funding available: Zero-interest repayable contributions up to 35% of eligible project expenses, from $500,000 to $10 million per project.
Who’s eligible: Canadian incorporated businesses with at least 5 full-time employees, located in southern Ontario. Companies must have at least 65% of the project funding secured and have the financial capacity to complete the project and repay the contribution.
What to consider: Projects must be complete by the program’s end date of December 31, 2023.
8. Northern Ontario Business Scale-up and Productivity (BSP)
Funding available: Investments up to $500,000 per project, covering 50% of eligible costs. Repayment terms are determined on a case-by-case basis.
Who’s eligible: For-profit and non-profit organizations with a minimum of 2 years in operation and potential for market growth benefiting northern Ontario. Companies must have the financial capacity to complete the project, as well as the managerial, technical and operational capacity to achieve the project’s objectives.
What to consider: Funding amounts are determined based on the minimum amount for the project to proceed, the applicant’s ability to repay and the extent to which other sources of funding have been leveraged.
9. Canada Job Grant (CJG)
The Canada Job Grant is a federally supported initiative with individual programs in each province. Depending what province you’re in, the grant can cover between 50% and 100% of eligible training costs for your ERP implementation.
The Workforce Training Stream covers 60% of training costs, to a maximum of $5,000 per person, for training that aligns with the employer and employee needs.
The Technical Training Stream covers 80% of training costs, up to $10,000 per person, to help employees learn new technical skills in response to automation and other tech advancements.
Canada-Alberta Job Grant – Reimbursements for two-thirds of eligible training, up to $10,000 per individual and a max of $300,000 per fiscal year.
Canada-Saskatchewan Job Grant – Reimbursements for two-thirds of eligible training, up to $10,000 per individual and a max of $100,000 per fiscal year.
Canada-Ontario Job Grant – Reimbursement up to $10,000 per person, with employers contributing one-sixth of the training costs if they have less than 100 employees. Companies with more than 100 employees must contribute half of the training costs.
What to consider: This grant is intended to help businesses train new or existing employees with the goal of reducing skills gaps and creating opportunities for employment or advancement. Existing training programs aren’t eligible. Keep in mind the eligibility requirements and training qualifications vary by province, so check the guidelines carefully before submitting your application.
Other Ways to Fund Your ERP Project
As you can see, there are many options available to help you pay for your ERP implementation. But securing government funding requires a fairly significant time investment. If you don’t want to go down that route, but could still use some help funding your project, talk to your ERP partner about other financing options. Some ERP vendors (like NetSuite) offer financing at low interest rates and leasing can be a viable option for the right company as well.
The takeaway is this – implementing ERP will improve your financial performance in the long-run, so don’t wait. There are financing options available to help you see results faster.
Interested in chatting more about your ERP options? Connect with our team today.
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