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There are many parties involved in financing the improvement of your production management methods. To determine which are best suited to your needs, there are specialized consultants to help you evaluate your situation.
Public sources of financing
Several government agencies have been set up to help businesses solve production problems. Experts from these organizations can assist you during the evaluation stage, and subsequently direct you to an appropriate program of financing (quite often within their own agency) or to private companies who can assist you in applying their recommendations.
Through its Industrial Research Assistance Program, the National Research Council of Canada (NRC) makes its network of 235 Industry Technology Advisors (ITA) available to small Canadian businesses. They are able to provide you with support and assistance in applying for financing from the sources best suited to your needs.
The Canadian Technology Network (CTN), another branch of the NRC, is the largest group of technological innovation advisors in Canada. Its members are employed in this capacity for the public and private sectors. As active members of the CTN, they are required to guide you, free of charge, to the consultant best suited to deal with your problem, regardless of whether that person is a member of the network. Since his or her services may be required for some time, the CTN also authorizes the consultant assigned to your file to charge a professional fee, as long as he is permitted to do so by his organization and he has your consent.
The Business Development Bank of Canada (BDC) functions as a "one-stop shop" by offering the services of its BDC Consulting. BDC works with a network of some 500 consultants to meet the needs of Canadian small business. Many of these consultants specialize in industrial engineering.
The Canada Business Service Centres website is useful for locating financing and training programs, for tracking down agencies offering consulting services, and for finding other forms of innovation assistance at the federal, provincial, and local levels. You can select your province and do a search using the word innovation. There will be about twenty results for the least populated provinces, and about sixty for those with the largest populations.
The pillars of financing
When the time comes to finance your production facilities, you will increase your chances of success by consulting different institutions.
Chartered banks prefer to finance equipment because they can obtain security on materials. This is especially true when it comes to financing small businesses, since the Canada Small Business Financing Act now allows them to recover 85 per cent of their losses in the event of a default in payment.
The federal government provides three main sources of financing to improve productivity:
Financing options in the first category are open to all manufacturing companies. They can be used to implement a system of lean production, for example, or a management system that complies with ISO quality standards.
Finding the right program
Technology Partnerships Canada is primarily dedicated to supporting research and development for high-tech companies, and has a program for financing the modernization of production processes. At this time it is only available to small businesses in the aerospace and defence sectors.
The tendency in the defence and aerospace sectors is to subcontract the manufacturing of ever-more sophisticated components and parts, and TPC has inaugurated a financing program for small businesses in this area. Virtually all these businesses must subscribe to the lean production practices already adopted by companies who originated the system, such as Bombardier and Pratt & Whitney.
The financing program at IRAP is oriented towards excellence in production management. It covers the development of new products and related production procedures, and has the advantage of being available to all sectors of activity.
BDC term loans may be repaid according to an amortization period that fits your needs. The borrower may be granted a grace period up to one year before repaying on the capital. Like IRAP, this is an ideal tool for a major modernization project in a small business.
All regional economic development agencies have financing programs which can be used to implement new production procedures. Loans may account for between 50 per cent (in the case of CED's IDEA-SME program in Quebec) and 75 per cent (for ACOA in the Maritimes) of eligible costs. Businesses may include salaries for personnel assigned to the production improvement operation.
Special cases and local assistance
The government offers other forms of financing in areas such as training (Human Resources Development Canada), and in sectors such as nutrition, culture, the environment, social economy, aboriginal communities, etc.
Local development agencies, which are institutions created by the federal government and most of the provinces, are a final source of financing. These agencies function as "one-stop shops" right from the beginning and can help you with your evaluation.
They can provide assistance in financing your productivity improvement operations, and they especially encourage activities that lead to job creation and maintenance.
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