According to the old adage, the 10 words small business people fear most are: I'm from the government and I'm here to help you. In fact, citizens and Small and Medium Enterprises (SMEs) are only too happy to prevail on the government seeking financial assistance. "Yes, the most common question we get is, 'How do I start a business?'" says Sara Brady, manager of the Ontario branch of the Canada Business Service Centre (CBSC), a federal-provincial agency geared to assist SMEs. "But the second most common question is, 'How do I get a grant for my business?'"

Her Toronto office, which fields some 400 calls a day, is quick to remind callers that there aren't pots of government gold waiting to be scooped up, no strings attached. "There are grants," she acknowledges, "but they're usually very specific and targeted to a specific client."

That said, there is a broad range of programs offering financial assistance to SMEs in virtually any stage of development - so many, in fact, that reviewing them all is beyond the scope of this article. And be forewarned: a curious lack of a central, government-run list of programs makes it difficult to identify applicable ones. This shortfall is partly attributable to the fact that they're administered by a number of federal departments, some in partnership with the provinces, and often under the aegis of regional agencies. Another irritating quirk searchers face is government's penchant for acronyms and definitions that can challenge anyone not fluent in "bureaucracyspeak".

Financial assistance is variously labeled as a grant (rare), award, contribution, shared cost, subsidy, rebate, tax credit (or rebate) or as a non-repayable or conditionally repayable loan.

Unsurprisingly, given all that, an industry of directory publishers, consultants and websites has leapt into a perceived vacuum, claiming to compile all sources of aid available and offering to assist SMEs in sorting through it all. The Canadian Federation of Independent Business (www.cfib.ca), a national lobby group supportive of SMEs, is dubious about private-sector publishers' and consultants' usefulness and high prices; CFIB gives members the same information for free.

In fact, the CFIB is against subsidies. President and CEO Catherine Swift argues that politicians use them for non-business purposes such as seeking votes in a region - a point of view the current sponsorship scandal seems to support. She also thinks subsidies distort the competitive balance. "There's a whole element out there that we call grantrepreneurs," says Swift. "They're not business people, they're just good at getting money from government."

Even so, just as politics is not likely to disappear, neither are financial incentives from government. And for SMEs seeking capital, a search for suitable ones can be rewarding. The CBSC's main website is a good starting point. It offers a rundown on the programs available and links each province's CBSC site. Another useful site is Industry Canada's, which gives details of various programs.

Though by no means complete, the following are typical programs SMEs might find worthwhile.

• Loans - By far the most commonly used government-assistance program, loans under the federal Small Business Financing Act offer companies with sales under $5 million access up to $250,000 for purposes such as equipment purchase and leasehold or property improvements. Loans arranged through banks, trust companies or credit unions are guaranteed by the federal government and typically repayable at the current prime rate plus 3% with repayment schedules as long as 10 years.
• Industrial Research Assistance Program (IRAP) - Administered jointly by the National Research Council and Industry Canada, IRAP makes available "contingently repayable" loans from $5,000 to $50,000 to entrepreneurs bringing technologically new materials, products and processes to market. Specific repayment terms are negotiated during the application process.
• Scientific Research and Experiment Development Program - The Canada Revenue Agency (the people who collect your taxes) provides SR&ED tax credits of up to 35% for qualifying expenses. CRA estimates net savings on a qualifying $100,000 project can be nearly $25,000.
• Wage subsidies - Payroll assistance is available a number of ways. IRAP, for example, subsidizes salaries of newly hired university and college graduates to a maximum of $9,800 and $9,200 respectively. Alberta has a similar program that pays technology companies up to 50% of new graduates' salaries (to a maximum of $20,000). Human Resources and Skills Development Canada (HRSDC), eager to reduce Employment Insurance rolls, has several subsidy and rebate programs that benefit employers who hire Employment Insurance (EI) recipients.
• Job Creation Partnerships - HRSDC offers free funding for a year to cover employers' overhead and employment-related costs to employers hiring EI recipients. The program also can provide employers who hire EI recipients funding of up to $1 million on a cost-sharing basis for capital projects.
• Exporting - SMEs with sales between $250,000 and $5 million with existing foreign sales may be eligible for Program for Export Market Development (PEMD) loans that range from $5,000 to $50,000 for development of new export-marketing strategies. Loans are repayable at a rate of 4% of incremental sales growth as a result of the project.

Other PEMD programs offer up to $7,500 to bring qualified SMEs inexperienced in exporting up to speed. They also offer low-interest loans ($5000 to $50,000) to assist qualified Canadian contractors in bidding on foreign, capital projects.

Also, it's worth exploring programs that specifically target your industry or sector. Heritage Canada, for example, gives out millions in grants to magazine publishers that support Canadian content. The Canadian Tourism Commission operates ongoing cost-sharing plans covering up to 50% of the cost of eligible marketing programs.

Can you benefit from one of the slew of "directories" websites and consulting services claiming to list all the funding opportunities? Sara Brady, noting that the CBSC frequently hears the question, suggests that if the publications actually cover every Canadian program they claim, it probably accounts for their size, cost ($90 or more) and main weakness. "If you live in Ontario, it doesn't help much knowing about a program that only applies to Nunavut," Brady says. "And most of the time, people can get program information from us for free and it will be related to where they live."

Sharon Monahan, who spent 14 years with HRSDC in Newfoundland before founding Business Guide Inc. in St. John's says her company's Web-based approach is better than a book because she can update government, program, and contact changes monthly so her subscribers have current information. Monahan says she doesn't pull punches when advising on applications. "We make it clear that clients can't expect gifts, but should be prepared to share some of the risk."

She's nonetheless a good advertisement for government assistance. Business Guide has been self-sustaining for six years. "But I started it with the help of a federal program," says Monahan.