It sometimes seems that when you’re bigger things always seem a bit easier – not always but most of the time.
That’s why when you are looking to fund your business and you’re a small to medium sized business owner or financial manager knowing which firms and finance companies are appropriate to deal with seems like a challenge. And business banking from a borrowing perspective seems like a huge challenge.
And another thing, if it’s not all the time, it’s sometimes, because at certain points in your company’s growth and history you are looking for business funding of some sort. What are the options – who can you turn to? Never fear… real world advice is here!
Business financing to either start or grow your business is available in a variety of ways and solutions. Let’s examine 5 key topic areas.
The number 1 solution, as perceived by many business people is banks and commercial credit unions. However, perception is certainly not always reality as many have discovered. However if you are in a position to demonstrate to the bank that your own pockets (i.e. your own money!) is committed to the business then they are certainly a good place to start.
Want to know who we think is the absolute best bank in town? We’re sure you do, and here’s the answer, its one that houses a banker who is committed to grow and understand your business.
One of the best programs offered by the bank is co sponsored by the government, it’s the SBL loan program, providing you with great rates, terms and structures, and even limited personal liability for the financing.
Point # 2 -There isn’t a day when we don’t get a call asking us for some assistance on government grants. There are probably hundreds , if not more , of government grant programs – our own opinion is that they are often difficult to qualify for and at the same time chances of approval on non repayable funds is , suffice to say, slim . We will add though that the SR&ED program is probably the best program in this area, although its not a grant per se. Check it out though if you feel you qualify.
Grant programs are often targeted to very specific cultural or environmental issues , and many come with strings attached, such as matching funds only, etc.
So focus on getting sources of capital to borrow, not give you!
Point # 3- Talk to a Boy Scout. That’s because that organizations motto of ‘ BE PREPARED ‘ runs very true in business. Your ability to present yourself, your background, your historical, present and future financials is critical to obtaining business financing from finance companies and banks in Canada. Many clients seem either overwhelmed with how to do this properly, or quite honestly just aren’t qualified. We are all experts inn our own area of expertise, right?
Solid professional assistance from your accountant or Canadian business financing advisor is steps away, and at a nominal cost, all things considered.
Tip # 4- We all know whats in it for us when we borrow funds in a banking or non banking facility. But whats in it for the lender? Never forget that point. Finance companies in Canada are based around risk and reward. Most business owners don’t realize that business financing in Canada is available from a rate of 3% per annum to 3% per month. All types of assets can be financed or monetized. Companies in bankruptcy proceedings can even borrow at low rates. It’s all about the assets, the rate of return, and how you put together your business funding request.
Tip # 5- Always is prepared to deliver on some level of owner equity, i.e. your own contribution into the business. That can be via a cash injection, retained earnings in the business, or assets that aren’t already collateralized.
So, Canadian business financing. It comes in many forms. Receivable financing, equipment finance, working capital cash flow loans, asset based lending, franchise financing, tax credit finance, etc. Speak to a trusted Canadian business financing advisor on how to fund your business, and which finance companies and banking partners are appropriate for you.