To remain competitive, small businesses must expand eCommerce capabilities as consumers increasingly shop online.
The Canada Digital Adoption Program (CDAP) is a $4 billion investment to assist small and medium-sized businesses in gaining access to new digital tools.
The Canada Digital Adoption Program has two streams:
- Grow Your Business Online Grant
- Boost Your Business Online Grant
Below we’ll cover everything you need to know about CDAP in 2022, and moving in 2023.
What Is the CDAP?
The CDAP assists small and medium-sized enterprises (SMEs) in adopting digital technology to boost their competitiveness.
Eligible firms will get a grant to help them develop their digital strategy, followed by a 0% loan of up to $100,000 to help them put it into action.
What Does CDAP Cover?
The loan covers items directly related to an established digital strategy plan, such as purchasing IT equipment, installation, employee technology training, and other services that support technology onboarding.
Grant and Expert Sales Advice for Canadian SMBs
The government of Canada can assist your small or medium-sized business with grants and expert advice to boost online sales, cut costs, better manage inventory, and more.
Grow Your Business Online Grant Program
The Grow Your Business Online award is being provided by the Government of Canada in collaboration with Small Business BC and Digital Main Street.
$4 billion has been allotted to assist small and medium-sized enterprises in migrating online.
Eligible businesses will receive a micro-grant of up to $2,400 to assist with the costs of implementing eCommerce solutions.
Is My Business Eligible for the Grant?
The Grow Your Business Online Grant is available through various channels. Presently they are accepting applications from businesses. Here are some of the requirements discussed below:
- After participating in the program, a company must commit to sustaining its digital adoption plan for six months.
- They must agree to participate in follow-up surveys, share information with the government (ISED and Statistics Canada), and have the company name published online.
- Small companies in the UK that are part of a chain, franchise, franchisor, or non-profit organization, or participate in online resale or drop-shipping, are ineligible.
- Unless their business model includes direct sales to the end consumer, wholesale or distribution businesses or manufacturers are excluded.
You can use the Grant Assessment Tool, to find out if your business is eligible.
Grant Eligibility Costs
Approval of your digital plan does not imply permission to buy anything.
No money should be spent until the Funding Manager sends an email allowing purchases.
The $2,400 micro-grant is a reimbursement-style grant, which means that money will be given to you after your spending plan and grant agreement are approved.
In your suggested budget, all qualifying expenditures must be directly related to the implementation of a new eCommerce business.
Anything unrelated to directly selling items or services online will not be considered an allowable cost.
Any transactions between a successful grant applicant and their chosen service provider that are found to be non-arm’s length would be declared ineligible.
CDAP grant funding is available for upgrading existing e-commerce sites for expanded functionality (i.e., new plugins or features).
E-commerce software is useful for tracking and managing product inventory, as well as fulfilling and shipping orders.
CDAP will also pay up to 20% of the total grant amount for hardware and software purchases.
For example, if a small business spends $1,300 on a new e-commerce integrated point of sale (POS) system, CDAP will cover 20%, or $260.
Shipping costs for items acquired through an e-commerce platform, as well as the renewal of digital services such as a domain name, software subscription, and so on.
Salary of the business owner or existing employee for project execution.
Intangible asset costs, such as goodwill, whether capitalized or expensed
Interest on capital invested, bonds, or debentures.
The costs associated with acquiring or establishing a technology company, as well as the fees and expenses associated with becoming a member of the Recipient’s Board of Directors, are discussed below.
Monthly mortgage, loan, and/or rent payments; refinancing of existing debt; losses on investments, bad debts, and any other debts; litigation costs; consulting fees for CDAP application submission or any other costs not related to the acquisition or setup of a technology solution
Is the Grant Right for Your Business?
The Canada Digital Adoption Program features its own grant assessment tool here.
Apply for CDAP
Below is the step-by-step process for applying for the CDAP. Once you’ve reviewed the steps, you can begin the application process here.
1. Register Your Business
Begin by visiting the website of Innovation, Science, and Economic Development Canada (ISED). There you can create an account.
2. Create Your Digital Plan
Create your digital strategy with the assistance of a partner approved by the ISED.
3. Receive ISED Validation and Approval
Once ISED has validated the plan, you can receive advisory fees of up to $15,000 after submitting the appropriate invoices.
4. Apply for Your Loan
When you’re approved, you can receive up to $100,000 by applying for a loan through the link in your email.
The Grow Your Business Online Program offers additional resources to help SMBs through the following programs and tools:
- eCommerce Advisor Program
- Stream-2 Digital Advisor Program
- Small Business BC Entrepreneur Program
- Cybersecurity Certification Program
- CDAP Events, Activities, and Webinars
- CDAP Updates
- CDAP Promotion
eCommerce Advisor Program
Mosaic, a partner organization, is actively looking for students or recent graduates to serve as eCommerce advisors with local small companies.
You will be trained as an advisor by industry giants such as Google, Facebook, Mastercard, Square Online, Shopify, and many others.
Over 35 hours of webinars, courses, and learning modules will train you to assist small businesses with online growth.
Stream 2 Digital Advisor Program
Through digital transformation, the Canada Digital Adoption Program assists businesses in lowering overhead costs and increasing efficiency.
Get up to $15,000 to improve your business’s technology or apply for a zero-interest loan to assist you in implementing new technology.
Businesses must be Canadian-owned, make at least $500,000 annually in revenue within the last three years, and have one to four hundred employees.
Small Business BC Entrepreneur Program
In 2021, 85% of everyone will shop online, up from 73% in 2018.
Is your small business adjusting to meet the demands of this rapidly expanding market?
Find the tools, resources, and inspiration you need to take your business online.
Discover the digital marketing tools that Small Business BC employs to reach customers online.
Cybersecurity Certification Program
CyberSecure Canada is the country’s small and medium-sized business cybersecurity certification program.
By taking steps to improve your organization’s cyber security posture, you can reduce the impact of cyber incidents, increase your competitive advantage, and reassure customers and investors that their information is secure.
CDAP Events, Activities, and Webinars
Events and activities in the Canada Digital Adoption Program
Join CDAP events and activities webinars to learn more about the eligibility, process, and other aspects of CDAP.
Submit your email address to get updates on the Canada Digital Adoption Program.
You will receive an email to confirm your subscription after you subscribe. You may unsubscribe at any time. Your email address will never be shared with anyone.
The resources here can help you promote the program and demonstrate to your partners the importance of adopting digital technologies in today’s marketplace.
CDAP asks you to please not alter the images or graphics because they are intended to meet Government of Canada standards.
Frequently Asked Questions
Can I apply for CDAP, or do I need MGG Digital to apply?
You can apply for CDAP here on the Innovation, Science, and Economic Development Canada website.
However, MGG Digital is prepared to take you step-by-step through the application process.
After my digital adoption plan is approved, how much time do I have to apply for the 0% loan?
After your digital adoption plan is approved, you will have 6 months to finish your loan application after receiving your individual connection from ISED to BDC.
Once you’ve completed a digital adoption plan, you have 30 days to apply.
You will be disqualified from the loan if you surpass this term.
I’m a start-up. Can I apply for the Boost Your Business Technology program?
Companies with a minimum of $500K in sales in 2020, 2019, or 2018 are eligible for the Boost Your Business Technology stream.
If they do not achieve these requirements, they may apply to Stream 1: Online Business Growth.
Please keep in mind that, even though loan requests are made through CDAP, applying businesses must satisfy CDAP eligibility and BDC worthiness requirements to receive a loan offer.
How long does it take to receive the BDC loan?
Once you have completed your strategy work with us, you can apply for your Business Development Bank of Canada (BDC) loan (up to $100,000).
The funds will be committed over four years, but you may be able to access them sooner depending on how quickly you submit your application.
Will I receive grant money upfront?
The Government of Canada reimburses funds upon project completion.
You will be able to submit your invoices and claim up to $15,000 in reimbursement.
In our case, you will be charged $15,000 and receive a refund of $13,500.
What can I spend CDAP grant on?
Following the completion of your business plan, you may apply for up to $100,000 in interest-free loans (payable over five years) to cover any costs associated with the implementation of your business strategy and digital adoption roadmap.
If your CDAP application is approved, the funding will only cover strategic and consulting services.
Can I submit applications for multiple businesses?
Yes, you may apply to CDAP on behalf of multiple businesses.
Each business will need to operate independently of the others and develop its own digital adoption strategy.
What are the amounts and terms for the loan?
Because the CDAP is a four-year program, you can apply until 2026.
The loan amount is decided by the size of your business.
If your annual gross revenues are between $500,000 and $5 million, you can apply for a loan of $25,000 to $50,000.
The loan must be used solely for the implementation of a CDAP Boost Your Business Technology stream-recognized digital adoption plan.
To receive a loan offer, applicants must meet CDAP eligibility criteria as well as BDC creditworthiness requirements.
Participating in the CDAP digital plan does not obligate you to apply for a loan.
When is it best to apply for the BDC loan?
If you want to apply for a business development loan (BDC) through the CDAP Boost Your Business Technology stream, you must meet CDAP eligibility requirements as well as BDC creditworthiness requirements.
If you already have a digital adoption plan that was created through a recognized government digital adoption program, you may be able to skip straight to the loan application.
Can I pay off an existing loan with a BDC loan?
No. The loan from this program must be used to carry out your digital adoption strategy.
You must be willing to testify about how the funds were spent.
Please keep in mind that CDAP has the authority to audit you on this point.
I passed the eligibility program but was denied the loan. What should I do?
CDAP eligibility is only one step in the loan application process.
Your proposal may be rejected for a variety of reasons.
For example, it may not have met the creditworthiness criteria of the BDC.
A loan request that is denied affects your credit score.
Do the BDC Advisory Services assist with creating a digital adoption plan?
BDC is one of the Digital Advisors Marketplace’s registered service providers.
If your company is selected for the Boost Your Business Technology stream, you will have access to a carefully curated list of service providers.
Please keep in mind that choosing BDC as your advisor will have no effect on your chances of qualifying for a zero-interest loan.
If I already have a digital adoption plan, can I still be considered for a loan?
Existing plans that are less than 24 months old are eligible for CDAP.
Select the fast-track option during the application process and upload your plan online.
Eligibility and Application Guidance Through MGG Digital
If you feel a bit overwhelmed by the information or are confused as to which routes to take, we’re here to help.
You can schedule a free call with us for hands-on step-by-step guidance.