Natural Products Canada Proof-of-Concept Program: Application Guide

Natural Products Canada Proof-of-Concept Program: Application Guide

If you are developing a bio-based product and need funding to show it can succeed in the market, the Natural Products Canada Proof-of-Concept Program could help. This federal program supports Canadian innovators as they move from proven science to commercial readiness. Funding is aimed at projects that are past basic research and ready to show they can work in the real world.

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What the Natural Products Canada Proof-of-Concept Program Funds

The Natural Products Canada Proof-of-Concept Program funds projects that show the commercial potential of new natural products or enabling technologies. These projects are often in a risky stage. Private investors may be cautious, but technical proof is still needed.

Eligible Applicants

You may be eligible if you are one of the following:

• A Canadian incorporated SME or start-up
• A Canadian academic research institute working on a project with a clear industry use
• An active member of Natural Products Canada at the time you apply

Your product or technology must also meet these requirements:

• At Technology Readiness Levels (TRL) 4 to 9
• Is a natural product or a technology that uses natural products
• Shows strong commercial potential
  • SMEs and start-ups must have a believable plan to reach $10 million to $15 million in annual revenue
  • Academic projects must solve a specific industry or sector problem

Funding Amount and Structure

The program offers:

• Up to $350,000 per project
• Pays for a maximum of 40% of total eligible project costs
• Repayable funding, based on NPC’s repayment terms
• A non-refundable project administration fee equal to 5% of total project costs, plus GST/HST

This means you must find the other 60% of project costs from other sources, like equity, industry partners, or non-dilutive funding.

Eligible Activities

The funding must be used for activities that support proof of commercial feasibility, such as:

• Pilot-scale production or validation trials
• Testing performance in real-world settings
• Demonstration projects with industry users
• Work on regulatory or market readiness linked to commercialization

Basic research or early discovery work is not eligible for this program.

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How the NPC Proof-of-Concept Application Process Works

The application process is selective and has several steps. The process can take a few months from your first submission to a final decision.

Here are the main steps:

1. Project intake and screening to check if you are eligible and if your project is a good fit
2. Technical and commercial review by NPC and outside experts
3. Due diligence, including looking at your finances and market potential
4. Funding agreement and project start

Strong applications show a clear link between technical goals and business results. If you want to compare programs by province or sector, GrantHub’s eligibility matcher can help you find similar commercialization options and check if NPC is right for you.

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Common Mistakes to Avoid

1. Applying too early in development
   Projects below TRL 4 do not qualify. NPC wants projects with proven science and a clear plan for the market.

2. Weak revenue projections
   SMEs must show they can realistically reach $10–15 million in yearly revenue. Poor market research is a common reason for rejection.

3. Forgetting the funding is repayable
   The funding is not a grant. You must plan to pay it back.

4. Not having matching funds ready
   NPC pays up to 40% of costs. Applications without confirmed co-funding are usually not competitive.

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Tips for a Strong Application

• Check your TRL: Make sure your project is between TRL 4 and TRL 9.
• Show your market potential: Back up your revenue projections with real data.
• Prepare your matching funds: Have proof of other funding sources before you apply.
• Explain your repayment plan: Show how you will meet repayment terms.

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Frequently Asked Questions

Q: How much funding can I receive from the NPC Proof-of-Concept Program?
You can receive up to $350,000, covering a maximum of 40% of eligible project costs. The rest must come from other sources.

Q: Is Natural Products Canada Proof-of-Concept funding repayable?
Yes. All funding through this program is repayable under NPC’s terms.

Q: What Technology Readiness Levels are eligible?
Projects must be between TRL 4 and TRL 9. Your technology should be proven and moving toward commercial use.

Q: Do I need to be an NPC member to apply?
Yes. You must be a member of Natural Products Canada when you apply.

Q: Can academic research teams apply?
Yes, if the project solves a real industry challenge and shows strong market potential.

GrantHub tracks hundreds of active commercialization and innovation programs across Canada — including repayable and non-repayable options — so you can quickly see what aligns with your business profile.

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Next Steps

The Natural Products Canada Proof-of-Concept Program is ideal for teams ready to prove their product can succeed in the market, not just in the lab. Before you apply, make sure your TRL is high enough, your matching funds are in place, and your revenue plan is strong. GrantHub can help you compare NPC with other programs and find extra funding to support your application.

See also:

• How science-based startups prepare for commercialization in Canada
• Sector-specific innovation and commercialization funding in Canada
• How to know if your business qualifies for export and commercialization support