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Financial Jump-Start

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While visiting the local unemployment office after getting laid off from his logging job in Ontario, Canada, Shane DeRusha, owner of Precision Auto Body, learned about grants for entrepreneurs ages 18 to 29. He realized that the province’s Northern Ontario Heritage Fund Corporation grant program could be the perfect vehicle to achieve his long-running goal of starting his own collision repair shop.

In addition to a $25,000 grant that would help DeRusha purchase equipment, Ontario sweetened the pot. The government provided DeRusha with $20,000 in unemployment benefits during Precision Auto Body’s first full year in business. “That made a big difference,” he says.

To apply for the grant, DeRusha needed to complete a business plan, put up some of his own money, and arrange for the rest of the necessary capital. The organization developed an online template for potential entrepreneurs to use when writing their business plans, while field staff throughout the region offers guidance.

DeRusha put his $25,000 grant to use on equipment, including a paint booth, heater, compressor and service jacks. The Young Entrepreneurs program pays suppliers directly for equipment, an important part of the program because vendors often avoid working with inexperienced business people, says Melanie Muncaster, acting executive director of the Northern Ontario Heritage Fund Corporation in Sault Saint Marie.

Tapping into resources for entrepreneurs can help in other, less tangible ways. For one, business owners can leverage grants with traditional lenders to gain additional funding. “Banks look more favorably on them because they have equity at their disposal. They have money that’s not repayable so their debt service is low,” notes Muncaster. “That’s a benefit to a young entrepreneur because typically they have a hard time getting access to capital for start-ups.”

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