The Road to Growth: Funding Options for Canadian Entrepreneurs
Are you an aspiring entrepreneur looking to launch your startup? Or are you a successful small business owner looking to grow and expand your business? Either way, how you are going to fund your goal is probably top of mind. With the numerous small business funding models available for Canadian entrepreneurs, you may not know which one’s best for you. This post is all about ways small business owners can find financial help to grow, innovate, and succeed.
According to Hot Topics, “fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management.”
Companies like Lending Loop and Company Capital are aimed at helping Canadian small businesses grow, by providing small business owners with capital at a fair interest rate. These companies are said to fill a gap for small businesses, which is often overlooked by major banks.
Quick application processing
Easy to access capital
Low interest rates
X Lack of regulation
X Higher risk of loss
The government offers small business grants to qualifying small businesses, whether you are just starting out or looking to expand. In many cases, however, grants are only available to individuals of a specific demographic who reside in a particular place, and they need to be tied to a certain industry.
They do not need to be paid back
X Difficult to get
X Restrictions on what you can and cannot use the loan for
The following resources are helpful for finding small business grants:
- 5 tips for finding small business grants in Canada
- 7 government grants for small business
- Find government grants
- The Funding Portal
Venture capital is great for small businesses that are high risk and have a high growth potential. Venture capitalists typically invest in the early stages of business development obtain substantial ownership in the companies they invest in. BDC Capital and OMERS Ventures are some of Canada’s well known venture capital firms.
X Need a highly innovative new product
X Loss of control
X Minority ownership status
Visit this link for detailed information about venture capital.
A microloan is a loan of a relatively small amount that is used to help entrepreneurs start and grow their small business. Microloans are an option for entrepreneurs that need less than a typical bank would lend.
X High interest rates
X You may not get as much funding as you need
If you think a microloan is right for you, check out these 20 sources of microloans in Canada.
According to the National Crowdfunding Association of Canada, “crowdfunding is the raising of funds through the collection of small contributions from the general public (known as the crowd) using the Internet and social media.”
Risk is spread among multiple investors
Mentorship from the crowd
X Limits your freedom as an entrepreneur
Maintain control of your business
Multiple loan options
Relatively low interest rates
X Extensive application process
X Numerous prerequisites
Bootstrapping is for those who want to succeed on their own first without funding. This typically means relying on savings and early cash flow to get started.
Complete control of your business
X Slow growth
X May not have enough resources
X Personal risk
Check out this article for tips on how to bootstrap your business.
So, whether you choose to go with one of these funding models or a combination of a couple, you should be able to find the small business financing option that works for you!