Learn how Product2Market (and today’s Sustainable CAP programs) can cover up to 50% of eligible development costs—plus how to pair with leasing.
If banks are saying “no” to funding your next piece of production or prototyping equipment, Saskatchewan’s Product2Market funding (and the Sustainable Canadian Agricultural Partnership programs that replaced/updated parts of it) can be the difference between waiting another year and getting to market now.
Here’s the practical reality, upfront:
This guide explains what Product2Market funding is (and what it looks like now), what “equipment development” really means in program terms, and how to structure the financing so you don’t choke your working capital while waiting for reimbursements.
Key point: People still say “Product2Market” because it was the recognizable CAP-era value-added support brand, but Saskatchewan’s current Sustainable CAP program listings emphasize Product Development Program and other streams for value-added processors. (Government of Saskatchewan)
Under the Canadian Agricultural Partnership (CAP) framework, Saskatchewan’s Product2Market–Value-Added program is described as supporting agri-business product development and marketing of value-added products, with two streams:
On Saskatchewan’s current “Programs for Agri-Businesses or Industry Organizations” page (Sustainable CAP), prototype and product development support shows up as the Product Development Program, administered by the Food Centre, with the client working with the Food Centre to select the right service provider. (Government of Saskatchewan)
Why that matters for “equipment development”: Many businesses assume a program will simply reimburse an equipment purchase. In practice, these programs often fund the development work (prototype runs, process trials, formulation, testing, packaging validation, product development services)—and your equipment spend may be eligible only if it’s clearly tied to those outcomes and the program guidelines allow it.
Key point: The headline people quote is “50% up to $100,000 per year,” but you should treat that as a maximum and build a plan that still works if reimbursement comes later—or comes in lower.
A widely cited summary of Product2Market: Value-Added shows:
Underwriter reality check (contrarian but fair): If your business only works if you get the full $100,000 reimbursement, the deal is fragile. Build the project so it still survives at 25–40% support, and treat the rest as your own capital plan.
Key point: Programs fund projects, not shopping lists. Your job is to connect the equipment (or service) to a measurable development outcome.
When Saskatchewan says prototype/product development, think:
Instead of writing “we want a new filler,” write:
“We need a semi-automatic filler and heat sealer to validate packaging integrity and throughput for a 1,500-unit pilot run, confirm shelf-life performance, and finalize process parameters for commercialization.”
That’s how reviewers and lenders both think: outcomes, repeatability, and risk reduction.
Key point: Grants help, but lenders still underwrite the deal using the same five buckets (the 5Cs): Character, Capacity, Capital, Collateral, Conditions.
Here’s how Product2Market-style support affects each C:
If you want the “how leasing approvals actually work” view, Mehmi’s guide on equipment lease rates in Canada breaks down why a payment quote isn’t the same as “the rate.”
Internal link: https://www.mehmigroup.com/blogs/equipment-lease-rates-canada-2025-guide-tips
Key point: Government support often reimburses after you incur eligible costs. That timing gap is where good projects die.
To avoid the “we ran out of cash before reimbursement” problem, build a two-track funding plan:
A helpful lens: Don’t finance the whole project like it’s permanent production on day one. Prototype-stage needs flexibility.
If you’re also sorting out tax on payments, Mehmi’s explainer on GST/HST on equipment leases is worth reading before you sign anything.
Internal link: https://www.mehmigroup.com/blogs/hst-gst-on-equipment-leases-in-canada
Key point: Saskatchewan PST is 6% and can apply to the purchase or rental of taxable goods and services used in Saskatchewan—which matters when you’re budgeting lease payments and grant-eligible costs. (Government of Saskatchewan)
Translation: your monthly payment might be “$X + GST + PST,” and your project budget should reflect that reality.
For a practical province-by-province view (with Saskatchewan included), see Mehmi’s guide to PST on equipment purchases by province.
Internal link: https://www.mehmigroup.com/blogs/pst-on-equipment-purchases-by-province-canada-guide
Key point: Your best plan is the one that still works if reimbursement arrives late.
Use this quick back-of-napkin math:
Now structure equipment funding so you don’t pay “full production” payments during “prototype uncertainty.”
Key point: Treat the application like a lender package: clean story, clean numbers, clean execution plan.
Start on Saskatchewan’s Sustainable CAP Programs for Agri-Businesses page to identify which stream matches your project (Product Development Program, SLIM, market development supports, etc.). (Government of Saskatchewan)
For prototype/product work specifically, Saskatchewan points you to the Product Development Program, administered by the Food Centre. (Government of Saskatchewan)
Write a one-page summary answering:
This prevents the classic mistake: “We’re approved, so we’re fine,” followed by cash running out mid-project.
If you’re financing any equipment (or bridging timing), build payments around what you can carry before the new product’s revenues are stable.
A practical resource: Mehmi’s overview of equipment loans vs leases (useful even if you choose leasing).
Internal link: https://www.mehmigroup.com/blogs/best-business-loans-in-canada-for-equipment
Expect conditions like:
Lenders also have conditions precedent (insurance, serial numbers, delivery confirmations, vendor details). If you’re an equipment seller or OEM, a vendor finance program can actually help your customers align their paperwork too.
Internal link: https://www.mehmigroup.com/blogs/vendor-finance-program-canada-close-more-deals
Key point: Waiting for reimbursement can be more expensive than paying a manageable lease now—if the delay costs you a season, a buyer, or a contract.
A fair contrarian take: the “cheapest” capital is not always the smartest if it slows you down. A 90–120 day delay can easily cost more than the financing spread, especially in seasonal agri-processing.
If your project involves upgrading owned assets, another option is sale-leaseback—turning existing equipment equity into working cash while keeping operations running.
Internal link: https://www.mehmigroup.com/blogs/mining-equipment-sale-leaseback-canada-unlock-capital
Key point: The winning play is separating “prototype risk” from “permanent production cost.”
Business: Saskatchewan-based value-added food processor (no identifying details)
Situation: They had steady wholesale demand for a Saskatchewan-sourced ingredient product, but needed to develop shelf-stable packaging and validate throughput before signing bigger contracts.
Project plan:
What the banks said:
They were “too early” for a standard term loan because the new product line’s cash flow hadn’t shown up yet.
What changed approvals (the 5Cs in action):
Outcome:
They completed packaging validation, secured two new buyers, and moved from prototype runs to repeatable production—without draining operating cash during the waiting period for support claims.
If you’re building a Saskatchewan prototype or value-added project and want to pair program support with a leasing-first equipment plan (so your cash flow survives the reimbursement lag), Mehmi Financial Group can help you structure the file like an underwriter: separating prototype-stage risk from long-term payments, packaging documentation cleanly, and modeling the real all-in monthly impact.
If you also need help sourcing equipment safely (especially for used units), Mehmi’s equipment sourcing hub is here:
Internal link: https://www.mehmigroup.com/equipment-sales-leasing
Product2Market is commonly referenced as a CAP-era value-added program concept, but Saskatchewan’s current Sustainable CAP listings emphasize programs like the Product Development Program (Food Centre-administered) and other supports for value-added processors. Start with Saskatchewan’s official Sustainable CAP program list to confirm the current intake and stream. (Government of Saskatchewan)
Sometimes the project may include equipment-related costs, but programs typically focus on development outcomes (prototype, testing, process validation). The safest approach is to tie any equipment spend directly to a measurable development milestone and confirm eligibility in the current guide/intake rules.
Usually not. Most lenders treat grants as uncertain timing until paid. They may consider it in your overall project plan, but they’ll still want to see you can carry the deal without “needing” the grant to make payments.
Saskatchewan PST is 6% and can apply to rentals/leases of taxable goods used in Saskatchewan—so your lease payment budget should include PST where applicable. (Government of Saskatchewan)
Yes—this is often the practical way to move faster. Use program support for development services and structure equipment payments so your base business can carry them during the ramp. Just ensure you’re not “double dipping” costs and keep clear documentation for claims.
Think like both a program reviewer and an underwriter:
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