6 Sources of Funding to Start or Grow Your Business

start up business loans canada

Every successful business started with an idea. But how do you turn that idea into a reality? Some businesses can be launched from a garage or home office with very little capital. Other businesses require large amounts of funding and working capital to get off the ground.

Fortunately, there are several ways to get funding to launch or expand your business.

 

1. Provincial and Federal Government Programs

Government loans and grants are available to help businesses get off the ground or expand their operations. In adidtion to Federal Government Programs, different provinces in Canada have set up programs to fund small businesses to boost economy, foster innovation through research and development and job creation. The funds can be used for purposes like training, wage subsidies, equipment purchases, capital investments and many more. Grants are beneficial because the funding does not need to be repaid. However, loans offered through these programs also often have favorable terms and conditions.

Funding opportunities can be found through:

Innovation Canada: A searchable database of grant and loan programs. Search filters allow you to sort by type of support (such as funding or capital investments), the amount needed industry, and more. Use these filters to narrow your results down to the most relevant grant and loan opportunities.

Funding for Female Entrepreneurs: A list of loan and grant programs for female entrepreneurs in Canada.

SmartStart Seed Fund (Ontario): Provides seed funding (up to $30,000) for Southern Ontario start-ups.

Industrial Research Assistance Program (IRAP): The National Research Council of Canada’s IRAP program offers funding programs for small to medium-sized businesses. These programs provide non-repayable funding for salaries and contractor costs. Grants can range from $30,000 for youth employment-related programs to up to $10 million for technology innovation programs.

Funding programs available to Alberta residents

Manitoba funding programs

British Columbia funding resources

Nova Scotia funding opportunities

Ontario grants and other funding resources

Canada Business Network provides a robust listing of all grants and subsidies that may be available to you on the provincial and federal levels. Search for a grant can be filtered by province and type of business.

Note that different programs might be industry specific

2. Bank Financing

 starting a small business in albertaSmall and medium-sized businesses will rely on their banks for most of their loans. Each bank offers its own terms and benefits, so you’ll want to discuss your loan options with numerous lenders.

Lenders may offer:

Customized repayment

Better terms

Personalized service

Bank loans are easier to obtain and offer better terms than other loans, but banks also don’t want to take on much risk. You’ll need to have either a solid business plan or a track record of revenue to secure a loan.

Good credit will help. If you’re in the start-up stages, you will need to guarantee the loan in most circumstances.

3. Angel Investors

If you’re an entrepreneur and want to build or scale your business, an angel investor may be able to provide funding for your idea. NACO is a Canadian organization that provides a full member directory to contact in your region.

Angel investors will however want so level of oversight on your operations. In most cases, and they will require:

Transparency on revenue and milestones

A seat on the board of directors

Funding is often provided in the early stages of business, with $25,000 to $100,000 in funding being the normal range of investment. When working with angel investors, you’ll benefit from the investor’s contacts and experience to propel your business growth.

There are several angel investor networks available to Canadian businesses, including:

National Angel Capital Organization

Spark Angel Network

Angel.co

Angel Investors Ontario

4. Self-funding

Self-funding is one of the most common methods of funding because you’re in full control. A lot of new business owners will put their own capital into their business to make their dreams a reality.

When you put your own money up as capital, lenders may be more inclined to provide a loan because you’re also taking a risk.

Funding can come from:

Savings

Investments

Selling assets

Personal line of credit

You may also want to consider asking friends and family to become investors in your business. You can offer these individuals equity in your business, but keep in mind that if your business fails, friends and family can complicate the failure more than a traditional lender.

5. Crowdfunding

Crowdfunding may or may not work for your business. When launching a new product, a lot of business owners will secure funding from the masses. You need a spectacular product page and story to become a funding hit.

Two main platforms are available: Kickstarter and Indiegogo.

Platform users will be responsible for funding your project with goals and milestones. You need to be active, update your backers, and work to exceed their expectations. Platforms are reward-based, so you’ll want to look at the best way you can reward your backers.

6. Business Incubator

Incubators, also known as “accelerators,” are ideal for high-tech industry businesses that have prototypes or ideas that are in various stages of development. You’ll also find some business incubators that focus on local economic development with the hope of creating jobs in a provincial area or revitalizing an area.

You may be able to use business incubators to:

Share office space

Use laboratories or other technology

Receive support

An incubator can greatly reduce funding needs while offering your business invaluable support in your industry.

When funding a business, be prepared to go through multiple avenues to find sufficient funding. You’ll need to remain frugal and cost-conscious to keep overhead low and ensure your funding lasts long enough to reach your business goals.

In conclusion,  Vaisus business consultancy is an experienced and reliable business funding consultant to help you. We are specialized in funding for startups, startup fundraising, startup consulting services, and all about business planning. Contact us for any more information.