Documents, budgets and readiness
50 answers. Written by the celerfunding.com editorial team from official sources. Each answer shows where it applies and when its sources were read.
What should a business prepare before asking a lender for financing?
Start with a clear business plan, your expenses and projections, and a specific use of funds. Then ask each lender for its own document list.
The SBA funding guide suggests comparing offers using your business plan, expenses and projections. Under the Canada Small Business Financing Program, you present a business plan to a bank, credit union or caisse populaire, and that institution decides.
Lenders test more than paperwork. BDC, for example, looks at operating history, financial capacity, credit and business purpose, so know your numbers before you apply.
Be ready to say how much you need, what it pays for, and how you would repay it. Note any owner guarantees or security a lender might ask for.
Nothing here predicts a decision. Required documents vary by lender and product, so confirm the list before you apply.
Next: Business funding
Sources (read 2026-10-31): SBA funding guide; Borrower application route; BDC financing FAQ
What should a nonprofit get ready before applying for a government grant?
Read the program's current guide first, then check costs, cash flow and timing, not only the headline amount.
The ISED application toolkit warns that matching funds, reimbursement timing, limits on spending before approval, and stacking of other government assistance can change whether an award is usable. It also notes that the cost of preparing an application is generally the applicant's responsibility, subject to each program's rules.
So work out your own contribution and whether you can cover costs while waiting to be reimbursed. Check what was already spent or promised by other funders.
On the US side, the funding notice determines eligible applicant types, including nonprofits with or without 501(c)(3) status.
Finally, a draft is not a submission. Keep the official confirmation once you apply.
This is general information, not an eligibility decision. Use the funder's guide and contact the program with any doubt.
Next: Nonprofit funding
Sources (read 2026-10-31): ISED application toolkit; Grants.gov eligibility
What sections should a business plan include for a lender?
A traditional plan covers eight areas. The SBA lists them as an executive summary, company description, market analysis, organization and management, service or product line, marketing and sales, funding request, and financial projections.
The SBA notes that lenders and investors commonly ask for this format. The funding request and financial projections matter most to a funder: they show how much you need, what it pays for, and whether the business can be profitable.
Write each part in plain terms, and keep the numbers consistent across sections.
A lender may still ask for more or a different layout, so ask for its list before you finish.
This is general information. It does not predict approval or terms.
Next: Funding guides
Related: What should a business prepare before asking a lender for financing?
Sources (read 2026-11-01): SBA: write your business plan
Is a one-page lean business plan enough for a lender?
Sometimes it helps as a first draft, but it may not be enough. The SBA describes a lean plan as a short chart with nine components: key partnerships, activities and resources, value proposition, customer relationships and segments, channels, cost structure, and revenue streams.
The SBA also says some lenders may want more detail than a lean plan gives.
A lean plan is useful to test your idea quickly. For a loan, expect a lender to want a funding request and financial projections too.
Ask the lender before you invest time. Some will accept a shorter document for a small request, and others will not.
This is general information and not a prediction of what any particular lender accepts.
Next: Funding guides
Related: What sections should a business plan include for a lender?
Sources (read 2026-11-01): SBA: write your business plan
What startup costs should I list before asking for funding?
List every cost you expect, grouped by type of business. The SBA notes that startup costs vary for brick-and-mortar, online and service businesses.
Common items it names include office space, equipment and supplies, communications, utilities, licenses and permits, insurance, lawyer and accountant fees, inventory, employee salaries, advertising and marketing, market research, printed marketing materials, and website creation.
For costs with published prices, such as permits, look up the figure. For uncertain ones such as salaries, research similar companies and talk to vendors and mentors.
A clear cost list supports the funding request in your plan and helps you ask for a specific amount.
This is general information, not a budget for your business or a promise of funding.
Next: Funding guides
Sources (read 2026-11-01): SBA: calculate your startup costs
How far ahead should I plan for ongoing business costs?
Separate one-time costs from recurring ones, then plan the recurring part over time. The SBA describes one-time costs as things like major equipment, a logo designer, and permits, licenses and fees. Monthly costs include salaries, rent and utilities.
It says to plan for at least one year of monthly costs, and calls five years ideal.
This matters for funding because a lender or funder will ask how you will cover costs until revenue arrives. Show the months you can fund and where the money comes from.
The SBA adds that one-time startup costs can often be deducted for tax purposes. Ask your accountant how that applies to you; this site does not give tax advice.
This is general information, not a forecast for your business.
Next: Funding guides
Related: What startup costs should I list before asking for funding?
Sources (read 2026-11-01): SBA: calculate your startup costs
Should I add a buffer to my cost estimates?
Yes, a modest buffer is a sensible habit. The SBA's cost guidance, in its break-even tips, suggests adding roughly 10% to the analysis to cover unpredictable miscellaneous expenses.
The figure is a rule of thumb, not a requirement of any lender or program. Some funders may expect a contingency line, and some grants cap what they will reimburse, so check each funder's rules on eligible costs.
Show the buffer openly in your budget rather than hiding it inside other lines.
Also remember that a grant may only cover costs it names, so a buffer you fund yourself could be the right answer.
This is general information and does not set the right amount for your project.
Next: Funding guides
Related: What startup costs should I list before asking for funding?
Sources (read 2026-11-01): SBA: calculate your startup costs
What market research should I do before applying for funding?
Show that there is demand and who you will sell to. The SBA says market research blends consumer behavior and economic trends to confirm and improve your idea. Questions include demand and market size, economic indicators, customer location, market saturation and competing options, and pricing of alternatives.
You can use existing sources, which save time but may be less specific, or run your own surveys, interviews or focus groups, which give more nuance but cost time and money.
Free US federal data sources named by the SBA include Census Bureau data, Bureau of Labor Statistics data and the Bureau of Economic Analysis.
Canadian users should look for equivalent national statistics.
This is general information. Research supports a plan but does not guarantee a funding decision.
Next: Funding guides
Sources (read 2026-11-01): SBA: market research and competitive analysis
How do I describe my competitors in a funding application?
Identify competitors by product line or service and by market segment, then assess them honestly. The SBA suggests looking at market share, strengths and weaknesses, your window to enter the market, barriers to entry, and indirect or secondary competitors.
It also says factors such as the level of competition, the threat of new entrants, and supplier and customer influence on price matter.
A funder reads this section to see whether you understand your market. Avoid saying you have no competitors; customers usually have alternatives, including doing nothing.
State your edge in concrete terms, such as price, location, speed or specialist skill.
This is general information and does not guarantee that a funder will find your plan persuasive.
Next: Funding guides
Related: What market research should I do before applying for funding?
Sources (read 2026-11-01): SBA: market research and competitive analysis
Do I need an EIN to apply for US funding, and does it cost anything?
Often yes, and it costs nothing from the IRS. The IRS says you never have to pay a fee for an EIN and warns about websites that charge for one.
It describes an EIN as used to manage business taxes. You generally need one to hire employees, operate a partnership or corporation, pay certain taxes, change business structure or ownership, and file business returns.
Whether a funder requires one is set by the lender or program, so ask. A sole proprietor may use a different identifier in some cases, which a tax adviser can confirm.
Use the IRS website itself to apply, not a paid third party.
This is general information, not tax advice.
Next: US funding resources
Sources (read 2026-11-01): IRS: apply for an EIN online
Who can apply for an EIN online, and what do I need ready?
The IRS says you can apply online if your organization was formed in the US or a US territory, your principal place of business is there, you are the responsible party or an authorized representative, and you have the responsible party's SSN or ITIN.
If your principal place of business is outside the US, you cannot use the online tool and must apply by phone, fax or mail.
Have your entity type ready. The session cannot be saved and expires after 15 minutes of inactivity. Only one EIN can be requested per responsible party per day. If you are forming a corporation or LLC, register with your state first.
The online tool runs on set hours in Eastern Time.
This is general information and may change; check the IRS page.
Next: US funding resources
Sources (read 2026-11-01): IRS: apply for an EIN online
How does a Canadian business get a business number from the CRA?
You register with the Canada Revenue Agency. The CRA describes two paths. Option 1 is for Canadian residents with a valid Social Insurance Number, including temporary SINs that start with 9. Option 2 is for businesses incorporated or located outside Canada, or where the owner has a SIN starting with 0 or no SIN.
The page also covers program accounts you may need for your business and has a section on gathering your information before you start.
Many lenders and funders ask for your business number, so register before you apply. Which accounts you need depends on your activity.
This is general information, not tax advice. Check the CRA page for current steps.
Next: Canada funding resources
Sources (read 2026-11-01): CRA: register for a business number
What will a lender actually require from me for an SBA-backed loan?
The lender gives you the full list. The SBA says the lender will provide you with a full list of eligibility requirements for your loan.
The SBA says businesses generally must meet its size standards, be able to repay, and have a sound business purpose. So prepare evidence for each: how you qualify as a small business, how you would repay, and what the money is for.
The SBA also suggests Lender Match to find lenders.
Because each lender sets its own paperwork, ask early for the checklist and the forms. A strong business plan with projections and a funding request is the common base.
This is general information and does not predict approval, amount or speed.
Next: US funding resources
Related: What should a business prepare before asking a lender for financing?; How do I apply for an SBA-backed loan?
Sources (read 2026-11-01): SBA loans overview
Can funding from several government sources be combined on one project?
Maybe, but check the rules first. The ISED application toolkit warns that stacking of other government assistance can change whether an award is usable.
Some programs cap the combined share of project costs that government money can cover, or require you to report other support. The toolkit does not give one general limit, so read each program's guide.
List every source you have applied for or received, with amounts and dates, before you submit anything.
Do not count the same cost twice across funders.
This is general information, not a stacking calculation for your project. If the guide is unclear, ask the program officer in writing.
Next: Canada funding resources
Related: What should a nonprofit get ready before applying for a government grant?
Sources (read 2026-11-01): ISED application toolkit
Can I spend money on my project before a funder approves it?
Often not on that funder's account. The ISED toolkit says limits on spending before approval can change whether an award is usable, so costs you incur early may not count.
The toolkit does not give one rule for every program. Some funders allow costs only from a stated date; others may reject earlier spending.
Before you commit money, find the program's eligible-cost start date in its guide. If it is silent, ask the program in writing and keep the answer.
If you must start early for business reasons, treat that spending as your own risk.
This is general information about federal toolkit guidance, not a ruling on any program. Nothing here promises reimbursement.
Next: Canada funding resources
Related: What should a nonprofit get ready before applying for a government grant?
Sources (read 2026-11-01): ISED application toolkit
Will a funder pay for the cost of preparing my application?
Generally no. The ISED toolkit notes that the cost of preparing an application is generally the applicant's responsibility, subject to each program's rules.
So budget your own time and any outside help as a cost you carry. If you pay a writer or consultant, check that the program allows representatives and how that person may be paid. Some bodies restrict percentage fees on grants.
A program might cover specific costs after approval, but only if its guide says so.
Nothing here promises that any cost will be funded.
This is general information. Read the current guide for the program you are targeting.
Next: Canada funding resources
Related: Can a consultant or funding service submit my government funding application for me?
Sources (read 2026-11-01): ISED application toolkit; AFP Code of Ethical Standards
What does the IRS require for an organization to be a 501(c)(3)?
An organization must be organized and operated exclusively for 501(c)(3) exempt purposes. The IRS also says no part of net earnings may benefit a private shareholder or individual, and the organization cannot be set up or run for private interests.
It may not be an action organization. Influencing legislation cannot be a substantial part of its activities, and it may not take part in campaign activity for or against candidates.
Most 501(c)(3) organizations can receive tax-deductible contributions. The IRS points to a step-by-step guide for applying for recognition of exemption.
Many funders ask for proof of status, so settle this before you apply.
This is general information, not legal advice or a determination for your group.
Next: Nonprofit funding
Sources (read 2026-11-01): IRS: exemption requirements for 501(c)(3) organizations
What do I tell a funder about debt versus equity in my funding request?
State clearly which you want, plus the terms and time period. The SBA's guidance on funding requests advises you to specify whether you want debt or equity.
It notes that venture capital invests in exchange for equity rather than debt, which means selling part of the business instead of repaying a loan.
Include the amount, what it pays for, and how long you need it. Match your ask to the type of funder: a bank will look at repayment, while an equity investor looks at growth and exit.
A grant is a different instrument again, and a loan guarantee is not a grant.
This is general information, not investment or legal advice, and it predicts no outcome.
Next: Funding guides
Related: What should a business prepare before asking a lender for financing?
Sources (read 2026-11-01): SBA funding guide
How do I work out how much funding to ask for?
Start with your needs, not the biggest number available. The SBA says every business has different needs, and once you know your startup costs you can decide how to get the funding.
Build the figure from your cost list, split into one-time and recurring costs, add a modest buffer, and subtract money you already have.
Then compare offers. The SBA recommends comparing offers from banks and credit unions to find the best terms for a loan.
Asking for too little can leave you short, and asking for too much can raise your repayment burden. A lender or funder will test your number against your plan.
This is general information. It does not say what any funder will offer.
Next: Business funding
Related: What startup costs should I list before asking for funding?
Sources (read 2026-11-01): SBA funding guide; SBA: calculate your startup costs
What financial statements will a lender ask for?
Expect to be asked for your company financial statements, and to have projections ready. There is no single list, because each lender sets its own, so ask the lender what it needs.
BDC advises applicants to prepare financial statements, a business plan and cash flow projections before starting, and says it may ask for company financial statements once an application is submitted. The SBA's business guide says an established business should include income statements, balance sheets and cash flow statements for the last three to five years in the financial section of a plan, plus a five-year outlook with forecasted statements and a capital expenditure budget.
A new business has no history, so projections carry more weight. Keep statements consistent with your tax filings, and have your accountant check them. Requirements vary by lender and loan size, so confirm before you apply.
Next: Funding hub
Related: What should a business prepare before asking a lender for financing?; What is a cash flow forecast and how do I prepare one?
Sources (read 2026-11-01): BDC financing FAQ; SBA funding guide
What other documents might BDC ask for besides financial statements?
BDC says that after you submit, you may be asked for one or more of these: company financial statements, a purchase offer, a Phase I environmental report, an assessment report on asset or structure value, and a list of leases if applicable. It may ask for more detailed documents depending on the loan.
For the online application itself, BDC says to have your up-to-date business registry information, names and contact details of owners, directors and shareholders, a void business cheque, and one piece of government photo ID. It also does a credit check on all loan guarantors and on directors.
Your list may differ. A loan under $100,000 generally needs fewer documents. Ask a BDC advisor which items apply to your request. This describes BDC only, not other lenders.
Next: Canada funding resources
Related: What financial statements will a lender ask for?; Who gets a credit check when a company applies to BDC?
Sources (read 2026-11-01): BDC financing FAQ
What is a cash flow forecast and how do I prepare one?
A cash flow forecast is an estimate of the money you expect to come in and go out over a future period. It shows whether you will have enough cash to cover costs and loan payments.
The SBA's guide asks for forecasted cash flow statements alongside income statements and balance sheets, and says the first year should be more specific, using quarterly or even monthly projections, with a five-year outlook. It says to explain your projections and match them to your funding request. BDC tells applicants to have cash flow projections ready, and its projection tool for tech companies describes generating 24-month projections.
Start with your sales estimate, list costs by month, and show opening and closing cash. Use cautious assumptions and note them. An accountant can review your forecast. A forecast is an estimate, not a promise.
Next: Funding hub
Related: What financial statements will a lender ask for?; What is a break-even analysis and do lenders want one?
Sources (read 2026-11-01): SBA funding guide; BDC financing FAQ; BDC: projection tool for tech companies
What is a use of funds statement?
It is the part of your request that says exactly what the money will pay for. The SBA's guidance on the funding request section of a business plan says to give a detailed description of how you will use your funds, including whether you need money to buy equipment or materials, pay salaries, or cover specific bills until revenue increases.
The same section should say whether you want debt or equity, the terms you want and the period the request covers, and it should include future financial plans such as paying off debt. Put a dollar amount on each item and make the total match your projections.
Lenders and funders may need the statement in their own format, so ask. A vague or padded list can weaken a request, and some programs limit which costs they will cover.
Next: Funding hub
Related: How do I work out how much funding to ask for?; What do I tell a funder about debt versus equity in my funding request?
Sources (read 2026-11-01): SBA funding guide
What is a break-even analysis and do lenders want one?
A break-even analysis shows the sales level where your income equals your costs. The SBA's business guide says it is usually a requirement to take on investors or debt, because it shows your plan is viable.
The SBA's calculator notes that fixed costs do not change with production or services over the life of an agreement, while variable costs do. For accuracy, separate semi-variable costs into their fixed and variable parts. It also suggests adding roughly 10% for unforeseen expenses.
To build one, list monthly fixed costs, estimate the cost per unit sold and the selling price, then work out how many units you need to cover costs. Use cautious assumptions. Lenders may ask for other formats too, so confirm what yours want. Break-even shows viability on paper, not that you will be approved.
Next: US funding resources
Related: Should I add a buffer to my cost estimates?; What is a cash flow forecast and how do I prepare one?
Sources (read 2026-11-01): SBA funding guide
What is the difference between eligible and ineligible costs?
Eligible costs are the ones a funder will pay or count toward your share, and ineligible costs are not. For US federal awards, the rules call these allowable and unallowable costs.
To be allowable, a cost must be necessary and reasonable for the award and allocable to it, conform to any limits in the award, be treated consistently, follow generally accepted accounting principles, not be used for another federal program, and be adequately documented. Costs must be incurred in the approved budget period, with limited closeout exceptions. Some costs have their own rules: for example, organized fundraising costs are generally unallowable.
For any other funder, the list is in the program guide, so read it before you spend. If a cost is not clearly listed, ask in writing and keep the reply.
Next: Funding hub
Related: Are fundraising costs allowable on a US federal award?; Can a US federal grant pay for costs I incurred before the award?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
How do I value donated services or property when counting it as my share?
Use the rules of the funder, and for US federal awards use the federal cost principles. The rules say values for contributions of services and property must be set under those principles.
For volunteer services from third-party professionals or consultants, the rate must be consistent with what is paid for similar work by your organization, or if you lack the skill in-house, with the labour market rate where you compete for those services. Allowable fringe benefits may be included. When a third party lends an employee, the service is valued at the employee's regular pay plus reasonable fringe benefits and allowed indirect costs.
Donated land or buildings are valued at the lesser of the remaining life value in your records or fair market value, with agency approval for exceptions. Keep records that prove the value. Other funders set different rules.
Next: US funding resources
Related: Can in-kind contributions such as staff time count toward my share of project costs?; Can funds from another federal award count as my cost share?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Can funds from another federal award count as my cost share?
Generally no. Under the US federal rules, cost sharing funds are accepted only if they are verifiable in your records, are not counted as contributions for any other federal award, are necessary and reasonable, are allowable, are in the approved budget when required, and are not paid by the federal government under another federal award.
There is an exception where the program's authorizing statute specifically provides that its funds can be applied to the cost sharing of other federal programs. Without that, one federal dollar cannot be your share for another federal award.
Before you plan your match, check the notice for what counts, and keep records that show where each dollar came from. State, local, private and your own funds may qualify if they meet the other conditions. Canadian programs have their own stacking and match rules.
Next: US funding resources
Related: Does cost sharing I offer in an application become binding?; How do I value donated services or property when counting it as my share?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Who gets a credit check when a company applies to BDC?
BDC says it does a credit check on all loan guarantors, as well as on members of the board of directors. That means the personal credit of people tied to the company can be looked at, not only the company's own record.
BDC also says a good credit score helps, but it evaluates overall financial health and growth potential, cash flow and management, not just the number on a credit report. It lists credit history as one of several criteria, along with business plan, revenue and cash flow capacity.
If you are a director or guarantor, check your own credit report first and fix any errors. Tell co-owners and directors early, because they may need to give consent. This describes BDC only; other lenders have their own checks. Ask a lender what it will review before you apply.
Next: Canada funding resources
Related: Why do lenders look at the owner's credit for a new business?; What other documents might BDC ask for besides financial statements?
Sources (read 2026-11-01): BDC financing FAQ
Why do lenders look at the owner's credit for a new business?
Because a new business has no track record, so the owner's personal record stands in for it. The SBA's business guide says existing businesses have an established financial history, but loan eligibility for a new business is typically based on the owner's personal credit score.
The SBA also says poor credit history is one of the main reasons small business loan applications are declined, and that good personal and business credit also affects insurance rates and how attractive you are to partners, suppliers and vendors. It points to the CFPB for tips for people with limited credit histories, and to FTC advice for improving credit.
Check your reports and correct errors before you apply. A weaker score does not always end your options, but ask each lender what it weighs.
Next: US funding resources
Related: What is a business credit report and should I check mine?; What credit score do I need for an SBA loan?
Sources (read 2026-11-01): SBA funding guide
What is a business credit report and should I check mine?
A business credit report records how your company handles credit, separate from your personal reports. The SBA's guide says you should monitor both your personal and business credit reports, especially if you suspect identity theft.
It says establishing and managing business credit can help you secure financing with better terms, help you negotiate supply agreements, and protect against business identity theft. One early step it names is registering for a Dun and Bradstreet number, which identifies each physical location of your business, and D&B has its own guidance on building business credit.
Checking your reports before you apply lets you fix mistakes. Be careful about companies that charge to fix or boost your credit; check any offer first. Which reports a lender uses varies.
Next: US funding resources
Related: Why do lenders look at the owner's credit for a new business?; Should I pay a company to improve my business credit report before I apply for financing?
Sources (read 2026-11-01): SBA funding guide
Do I need business insurance before getting funding?
Not as a general rule found in the sources read, so ask the funder. Some lenders, lessors and programs do set insurance conditions, and they should state them.
The SBA's startup cost list includes insurance as a cost to plan for. Its guide also says a limited liability company or corporation gives some protection, but that the protection has limits, and business insurance can fill gaps to help protect personal and business assets.
So plan for insurance in your budget and ask each funder early whether it needs proof of coverage, a named insured or a specific policy type before closing. Do not buy a policy only to satisfy a rumour. Compare quotes from licensed insurers or brokers. Requirements differ by loan, equipment and location.
Next: US funding resources
Related: What documents will an equipment lender ask for?; What startup costs should I list before asking for funding?
Sources (read 2026-11-01): SBA funding guide
What registrations and licences do I need first?
It depends on your activity, location and structure, so check each level of government. The SBA says most small businesses need a combination of federal and state licences and permits, and that activities regulated by a federal agency need a federal licence or permit.
For state, county and city licences, requirements and fees vary by business activity, and you must research your own state, county and city rules; the Secretary of State's website is a place to start. If your business is an LLC, corporation, partnership or nonprofit corporation you may also need county or city licences. Some licences expire, so track renewals.
On the tax side, readiness answers on the EIN and Canadian business number cover registration. Funders may ask for proof, so keep copies together before you apply. This is the US view; Canadian provinces and cities have their own rules.
Next: US funding resources
Related: Do I need an EIN to apply for US funding, and does it cost anything?; How does a Canadian business get a business number from the CRA?
Sources (read 2026-11-01): SBA: apply for licenses and permits
Should my business have its own bank account before I apply?
Yes, it is a sensible step before you ask for funding. The SBA says to open a business bank account as soon as you start accepting or spending money as your business, and that it helps you stay legally compliant and protected.
The SBA lists common documents banks ask for: an Employer Identification Number (or a Social Security number for a sole proprietorship), your formation documents, ownership agreements and a business licence. Banks vary, so ask yours.
A separate account also makes your statements and bookkeeping cleaner, which lenders and funders may review. It is no promise of funding. Be wary of any funding site that asks you to open a new account as a condition of applying; that is a scam warning sign covered elsewhere on this site.
Next: US funding resources
Related: Do I need an EIN to apply for US funding, and does it cost anything?; Why would a grant site ask me to open a new business bank account?
Sources (read 2026-11-01): SBA: open a business bank account
How do I prepare accounts if my records are messy?
Start by setting up a simple, consistent system and rebuilding the history from bank and card statements. The IRS says you may choose any recordkeeping system suited to your business that clearly shows your income and expenses, and that, except in a few cases, the law does not require any special kind of records.
The IRS says good records help you monitor progress, prepare financial statements, identify income sources, track deductible expenses and support tax returns. Separate business and personal spending, sort transactions by category and month, and match them to your tax filings.
If the gaps are big, a bookkeeper or accountant can help. Do not invent or backdate records, as lenders and funders compare them with tax returns and bank statements. Say what is estimated. This is the US view; the CRA has its own rules.
Next: US funding resources
Related: How long should a US business keep its records?; Should my business have its own bank account before I apply?
Sources (read 2026-11-01): IRS: recordkeeping for small business
Will a US federal award pay me in advance or reimburse me?
It can be either, and you should plan for the slower case. Federal rules say payment methods must minimise the time between the transfer of funds and your spending. A recipient must be paid in advance if it has written procedures and financial systems that meet the standards, and advances must be limited to the minimum needed and timed with actual cash needs.
Reimbursement is preferred in certain cases, such as when those requirements cannot be met, when the agency sets a specific condition, when you ask for it, or for construction. When reimbursing, the agency must pay within 30 calendar days of a proper request, unless it reasonably believes the request is improper.
Advance payments must be kept in insured accounts where possible. Your award terms say which method applies. Canadian and private funders differ.
Next: US funding resources
Related: What should a nonprofit get ready before applying for a government grant?; What internal controls and data safeguards do US federal awards expect?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
What is the de minimis indirect cost rate on US federal awards?
It is an optional flat overhead rate for organizations with no negotiated rate. Federal rules say recipients and subrecipients that do not have a current federal negotiated indirect cost rate may elect to charge a de minimis rate of up to 15 percent of modified total direct costs (MTDC). The recipient decides the rate up to that limit.
Indirect costs are general costs that support the whole organization, such as administration, rather than one project. For nonprofits the rules give examples like depreciation, operating and maintaining facilities, and general administration and executive salaries.
The rate is a ceiling, not a guarantee, and some awards or statutes set different limits, so read the notice and award terms. Keep records to support what you charge. Canadian programs set their own overhead rules.
Next: US funding resources
Related: What is the difference between eligible and ineligible costs?; Are fundraising costs allowable on a US federal award?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Can a US federal award be terminated early?
Yes. Federal rules list four ways a federal award can end early: by the agency or pass-through entity if you fail to comply with the terms; by agreement of both parties; by you, with written notice giving your reasons and the effective date; or by the agency under the award terms, to the extent the law allows, if the award no longer meets program goals or agency priorities.
The award's terms and conditions must clearly specify all termination provisions. If an agency ends an award because of a recipient's material failure to comply, it must report that in SAM.gov.
So read the termination clause before you accept, build a reserve for wind-down costs, and follow the reporting and approval rules. Other funders have their own clauses. Ask a lawyer if you do not understand the terms.
Next: US funding resources
Related: Do I need approval to change my project after a US federal award?; Can a US federal award's end date be extended?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
What is a funding agreement in Canadian federal grants and contributions?
A funding agreement is the written agreement between the Government of Canada and an applicant or recipient that sets out the obligations of both for one or more transfer payments. The Treasury Board's Policy on Transfer Payments defines it that way.
The policy also defines a contribution as a transfer payment subject to performance conditions specified in a funding agreement, which is accounted for and subject to audit. An applicant is an individual or entity that has applied for a transfer payment.
So a contribution comes with conditions and reporting, and you should read the agreement closely before signing. Terms vary by program. Ask the program officer about anything unclear, and keep a signed copy. This describes federal programs only, not provincial or private ones.
Next: Canada funding resources
Related: What does a stacking limit mean for Canadian government funding?; Are Canadian federal funding requirements supposed to match the risk of the program?
Sources (read 2026-11-01): Policy on Transfer Payments
What is a period of performance and why do dates matter in my plan?
It is the time window in which you may spend award funds on the project. The federal definition is the interval from the start date of a funded portion of an award to its end date, during which recipients are authorized to incur financial obligations.
Costs must be incurred during the approved budget period, with limited exceptions for administrative closeout, so your timeline and budget need to fit the dates. Final reports are due within 120 calendar days after the period ends. Pre-award costs and extensions each need agency approval.
When you plan, map each task and purchase to a month inside the window, allow time for ordering and delivery, and leave a buffer. If dates slip, ask for written approval early. Other funders have their own date rules.
Next: US funding resources
Related: Can a US federal award's end date be extended?; What do funders mean by reporting and final report requirements?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Can a US federal award's end date be extended?
Sometimes. A no-cost extension extends the period of performance without more federal money. Federal rules list it as a change needing prior written approval, other than any one-time extension the agency authorizes, and say requests should be sent at least 10 calendar days before the period ends. An agency may approve multiple no-cost extensions if not prohibited.
An agency can also waive some prior approvals. One waiver lets a recipient start a one-time extension of up to 12 months, with written notice and a revised end date at least 10 days before the period ends. It may not be used only to spend leftover funds.
Do not wait until the last week. Check your award terms, ask in writing early and keep the approval. Other funders set their own rules.
Next: US funding resources
Related: What is a period of performance and why do dates matter in my plan?; Do I need approval to change my project after a US federal award?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Do federal grant recipients need competing quotes for purchases?
Often, yes, but it depends on the size of the purchase. US federal rules set up informal methods for small purchases: micro-purchases and simplified acquisitions. They can be used when the value of the purchase does not exceed the simplified acquisition threshold. Larger purchases need formal methods such as sealed bids or proposals.
For any method you must keep documented procurement procedures. Micro-purchases may be awarded without competitive quotes if you consider the price reasonable based on research or history and keep documents to support it. Above that, price or rate quotations are normally sought.
So get written quotes, keep your price research, and do not split a purchase to avoid a limit. Check your award terms, which may add rules. Canadian programs differ.
Next: US funding resources
Related: What is the micro-purchase threshold and can my organization raise it?; Who owns equipment bought with a US federal grant?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Who owns equipment bought with a US federal grant?
You usually hold title, but it is conditional. Federal rules say title to equipment acquired under the award vests in the recipient upon acquisition, subject to conditions, unless a statute says otherwise. A conditional title means a clear title is withheld until conditions in the award are met.
You must use the equipment for the project's authorized purposes during the period of performance or until it is no longer needed. While it is used for the original purpose, you must not dispose of it or encumber the title without agency approval. Records for equipment must be kept for three years after final disposition.
So do not sell, pledge or lend grant-funded equipment without checking the award terms. For loans or leases of equipment outside grants, see the equipment answers.
Next: US funding resources
Related: Do federal grant recipients need competing quotes for purchases?; Is the equipment itself the collateral for an equipment loan?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
What is the micro-purchase threshold and can my organization raise it?
It is the dollar limit under which a small purchase can be made without competitive quotes. Federal rules say you set and document an appropriate threshold based on your internal controls, risk evaluation and procurement procedures, and it must be authorized or not prohibited by state, local or tribal law.
You may set a threshold above the federal one by self-certifying a threshold of up to $50,000 on an annual basis. You must keep documentation, including a justification and clear identification of the threshold, available to the agency and auditors.
Micro-purchases should be spread fairly among qualified suppliers where practicable. Do not rely on this for large buys. Confirm your award terms and your own board policy first.
Next: US funding resources
Related: Do federal grant recipients need competing quotes for purchases?; What internal controls and data safeguards do US federal awards expect?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
What internal controls and data safeguards do US federal awards expect?
Federal rules require you to set up, document and maintain effective internal control over the award, giving reasonable assurance that you manage it in line with federal law and the award terms. The controls should align with the Comptroller General's federal internal control standards or the COSO framework.
You must also comply with the law and award terms, evaluate and monitor your own compliance, and take prompt action when noncompliance is found. On data, you must take reasonable cybersecurity and other measures to safeguard information, including protected personally identifiable information, consistent with federal, state, local and tribal privacy laws.
In practice, write down who approves spending, who reconciles accounts, and who can see client records. Canadian and state privacy laws may add duties, so ask a lawyer if you handle sensitive data.
Next: US funding resources
Related: Will a US federal award pay me in advance or reimburse me?; What is the micro-purchase threshold and can my organization raise it?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Are fundraising costs allowable on a US federal award?
Generally no. Federal rules say costs of organized fundraising, including financial campaigns, endowment drives and solicitation of gifts and bequests, are unallowable. The exception is fundraising costs needed to meet the federal program objectives, which are allowable with the prior written approval of the agency.
The same section says costs of investment counsel and staff and similar expenses to enhance income from investments are unallowable, except in limited cases such as pension or self-insurance funds with federal participation.
So do not put your development staff or gala costs in a federal budget without checking. Keep fundraising time and cost separate in your books. Ask the agency in writing about anything unclear. Other funders have their own cost lists.
Next: US funding resources
Related: What is the difference between eligible and ineligible costs?; What is the de minimis indirect cost rate on US federal awards?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
How do I assess if I am ready to take on debt?
Check that your cash flow can cover repayments comfortably, and that you have a clear purpose and plan. BDC lists the main criteria it looks at: operating in Canada, typically at least 12 months in business, consistent revenue or a clear path to it, profitability or a path to it, cash flow capacity to manage repayments, credit history, a solid plan with realistic projections, and owners who have reached the age of majority.
Use the list as a checklist. Build a cash flow forecast, add the loan payment, and see if you still have room when sales dip. BDC says credit helps but it also weighs cash flow, potential and management.
This is BDC's list, not a rule for all lenders, and meeting it is no promise of approval. Debt must be repaid; consider your own risk.
Next: Canada funding resources
Related: What is a cash flow forecast and how do I prepare one?; Do I earn interest on US federal advance payments?
Sources (read 2026-11-01): BDC financing FAQ
Do I earn interest on US federal advance payments?
Mostly you must hold advances in an interest-bearing account, and you may keep only a small amount of the interest. Federal rules require advance payments to be kept in interest-bearing accounts unless an exception applies, for example you receive under $250,000 in federal funding a year, or the best account would not reasonably earn more than $500 a year on federal cash balances.
You may keep up to $500 per year of interest earned on federal funds for administrative expenses. Any additional interest must be returned annually to the federal payment system.
The rules also say advances should go in insured accounts where possible, and the agency cannot require separate bank accounts, but you must be able to account for all federal funds. Read your award terms and ask your accountant.
Next: US funding resources
Related: Will a US federal award pay me in advance or reimburse me?; What internal controls and data safeguards do US federal awards expect?
Sources (read 2026-11-01): 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
How long does a BDC loan decision take?
BDC says it depends on several factors, including how many loan requests it has and how quickly you give it all the information it needs. It says requests under $100,000 need fewer documents and are generally faster.
In describing its process, BDC says different loan types have different response times, but many applications receive a quick response, often within a few business days. After you submit, an advisor reviews everything and contacts you to discuss options.
Treat these as general statements, not a promise for your file. The fastest way to avoid delay is to prepare financial statements, a business plan and cash flow projections first and to have owner and director details ready. Other lenders have different timelines, so ask each one.
Next: Canada funding resources
Related: How long do funders usually take to respond to an application?; What other documents might BDC ask for besides financial statements?
Sources (read 2026-11-01): BDC financing FAQ
How long should a US business keep its records?
Keep each record as long as it may be needed to prove income or deductions on a tax return. The IRS says the length of time depends on the action, expense or event the document records.
For employment tax records, the IRS says to keep them for at least four years. Records should show your income and expenses clearly, and any system suited to your business may be used.
If you receive federal grant money, separate rules apply: recipients must keep award records for three years from the date of the final financial report, longer if there is an audit, claim or litigation. Funders and lenders may also require longer retention in the agreement.
When unsure, keep records longer and ask your accountant. This is the US position; the CRA has its own rules.
Next: US funding resources
Related: How do I prepare accounts if my records are messy?; What federal award records must a US grant recipient keep, and for how long?
Sources (read 2026-11-01): IRS: recordkeeping for small business; 2 CFR Part 200: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (eCFR)
Who can help me check whether I am ready to apply?
Start with a free or low-cost advisor who does not make the lending decision. The SBA says it and its partner network offer free or low-cost counseling and training. Its Resource Partners include Small Business Development Centers, SCORE mentors, Veterans Business Outreach Centers and Women's Business Centers, and its local assistance tool finds one by ZIP code.
Take your business plan, financial statements, projections and use-of-funds list, and ask the advisor to test them against what lenders and funders ask for. In Canada, BDC says its advisors can guide you on improving your financial position, which applies if you have applied.
An advisor's review is no promise of approval. Be wary of paid services that promise results. You can also send CELER an enquiry, which is not a readiness certification.
Next: Funding hub
Related: Where can I get free help with a funding or loan application in the US?; What should a business prepare before asking a lender for financing?
Sources (read 2026-11-01): SBA local assistance; BDC financing FAQ
What CELER is and is not. celerfunding.com is operated by Celer Merchants Corporation. We are not a lender, grantmaker, government agency, investment portal or licensed adviser, and we are not an official partner of the programs mentioned here. This page is general information, not legal, tax, investment or credit advice. A CELER enquiry is not an official grant or loan application.