Financing your Business
If you’re an aspiring entrepreneur with a great idea – but no actual business to speak of – you’ll find that applying for financing can be an uphill battle. Banks generally choose not to provide funding for entrepreneurs without established businesses, and many online options come with unacceptably high interest rates. That being said, reasonable options do exist. This section aims to offer some relief for entrepreneurs looking to start their businesses off right with the proper funding.
To begin, you don’t need to completely scratch banks off of the list of potential lenders. With a strong credit score, you can apply for a personal loan. Personal loans differ from more traditional business loans because they aren’t backed by collateral – something valuable that banks can take from you if you are chronically unable to make your payments. Because the acquisition of these loans primarily rely on your credit score, they can be easy to obtain without an established business. They also make use of a fixed repayment system. Basically, you receive a lump sum of money that you have to pay back with interest within 2 to 5 years, over the course of monthly installments.
It is also important to know that, with a higher credit score, the interest rates you will be offered for these loans will generally be lower. Be sure to shop around for the best deal with the lowest interest.
For additional information on the loan application process, you may want to check out the Applying for a Bank Loan page in our Growing your Business section by clicking here.
Non-Profit and Government Loans and Grants
Another option would be to search for funding through non-government organizations (NGOs). These organizations normally operate within certain geographic locations, and act primarily to assist small business start-ups in getting off the ground. Basically, the success of your business means the success of their organization. Canada Business’ website hosts a list of these NGOs that operate across Canada, with tags for their areas of operation when applicable. Click here to travel to their site. Both loans and grants are offered, depending on the organization.
The federal and provincial levels of government have funding programs available that aim to assist the growth of new and established small businesses. Depending on the program, your small business startup could be eligible for cash advances, loan guarantees, wage subsidies, and various forms of grants. A webpage on the Canada Business Network site lists every available funding opportunity. You can refine your search by your location, industry, purpose of financing, target audience, and desired type of funding to only see programs that are applicable to you and your business. Click here to travel to their site.