Considering opening your own business in Canada? Here are some financing options: Incubators, Asset-based lending, Crowdfunding, and Small business loans. There are numerous financing options available to entrepreneurs in Canada, so be sure to investigate all your options carefully. A great business idea doesn’t need to be plagued with funding issues. Instead, it can reap the rewards of a solid business plan.

Incubators

Startup incubators can help entrepreneurs with limited resources to launch their businesses. They may provide office space and laboratories, and provide administrative, technical, and logistical support. Some incubators also focus on job creation or economic revitalization. Entrepreneurs should explore all of the financing options before choosing one. The BDC has resources for finding incubators that fit the industry sector in which they are interested. This is a good place to start.

The application process for incubators is thorough, and applicants must submit a business plan and disclose their entire business activities. Incubators typically require a commitment of between one and two years, and their schedule can be full of trainings and workshops. They may also charge a low, market fee for their services, but be prepared to provide equity. Once accepted, a startup can use the resources and coworking space in the incubator for free or at a discounted price.

Asset-based lending

While many banks don’t place as much importance on rapidly growing businesses, asset-based lending for small business in Canada can help you get the funding you need to expand. These loans are secured by your business’s assets, which means that the lender has less risk than a traditional unsecured loan. Because of this, these loans typically carry a higher interest rate than unsecured loans, though they’re still significantly cheaper than unsecured loans.

An asset-based loan will be less expensive than a term loan, and its APR is typically only seven to seventeen percent, though this can vary depending on your specific circumstances. However, you may need to pay an appraisal fee. This fee will depend on the type of asset you have, and may vary by lender. Accounts receivables, for example, are easier to appraise, while real estate and machinery require a site visit. As a business owner, it is vital to understand how your business finances are working and what assets are worth. While balance sheets are often a starting point, lenders want to see recent financial statements to provide an accurate assessment of your assets.

Crowdfunding

More entrepreneurs in Canada are looking for new sources of funding outside of traditional banks and credit card advances. The concept of crowd funding is an innovative arrangement in which entrepreneurs can seek money from members of a community online in exchange for a share of ownership or the opportunity to contribute. The Canadian Securities Administrators currently require that all investors have accredited investor status, but recently finalized rules are opening the door for retail investors to participate.

There are two primary types of crowdfunding: debt-based crowdfunding and donation-based crowdfunding. In donation-based crowdfunding, people invest a small amount of money with no expectation of receiving anything in return. The goal is to support the growth of the business, and most crowdfunding platforms operate on a donation-basis. In debt-based crowdfunding, however, people invest in the business and are required to repay it with interest.

Small business loans

A business loan is a type of financing that enables an individual or company to finance the operations of a business. The loan amount can vary between $5,000 and $5 million and is repaid in monthly installments over a five to twenty-year period. These loans can be obtained from online lenders or financial institutions. Many online lenders offer prequalification, but large banks may require a visit to a branch. The documentation required to qualify for a business loan varies by lender. While some require a lengthy list of documents, some do not. You can Learn more about Merchant Growth Small Business financing and apply for it if you find it fit for your business needs.

Some sources of small business loans in Canada give preference to women entrepreneurs. There are numerous government and non-profit organizations that offer business funding, but women are often given special consideration. For example, the Alberta Women Entrepreneurs program provides workshops and networking opportunities to support women-owned businesses. While women generally face higher lending criteria than men, they may be eligible for small business loans in Canada. There are other sources for small business loans in Canada, but the majority of them are targeted at women.