Do you have a great idea for a new business but are lacking the funds to put your ideas into action? Sometimes you have to spend money to make money. Beyond personal savings, family, and friends there are many options for financing your startup in British Columbia. Here is some information to get you started:
Small Business Loans
Attaining a small business loan can be difficult as Canadian banks are typically conservative and startups are frequently deemed high risk. Banks are not the only place to look for a small business loan:
Helps new and established businesses get up to $500,000 in financing. You can apply at any bank or credit union in Canada.
This loan is designed for established businesses looking to fund their growth. You can receive up to $250,000 if you qualify.
Startups and businesses in the early growth phase may be eligible for a loans up to $100,000.
Community Loan Funds
Community Investment Funds are non-profit organizations dedicated to helping people who can’t get the loans they need from traditional sources due to insufficient credit history or collateral. Loans range from $2000-$150,000. Community Futures British Columbia helps BC residents start or buy a business.
Industry Specific Funding
Funding For Young Entrepreneurs
There are several programs that focus on helping young entrepreneurs (typically age 30 and under) start successful businesses. One such program is Futurpreneur Canada, a non-profit organization which helps aspiring business owners aged 18 through 39 through mentoring, coaching, and financing of up to $45,000.
Small Business Funding For Minority Groups
If you belong to one of many of Canada’s recognized minority groups you may qualify for unique grants and loans. Here are a few examples of the funding available to Canadian minorities:
This is a program run by the Government of Canada that provides Canadians of Aboriginal heritage with business funding in the form of non-repayable grants. An individual may receive up to $99,000 while a community owned business may receive up to 250,000.
If you are a Aboriginal resident of BC you may be eligible for a business loan of up to $75,000.
This program provides funding to First Nations communities whose projects have a positive environmental or social impact.
This program offers mentoring, counselling, and training to entrepreneurs with disabilities. In some locations business loans are offered as well.
Provides women with up to $100,000 to start, purchase, or grow a business in BC.
Business Accelerators and Incubators
Business incubators and accelerators are programs designed to promote the successful development of entrepreneurial companies. This is accomplished by providing business resources and services and access to business contacts. Some of them may even provide funding in return for equity. The British Columbia Innovation Council (BCIC) has published an article on their blog that thoroughly outlines the many business incubators throughout BC.
Angel investors are individuals looking to fund small businesses and startups that they consider to be viable investments. They are typically looking for a higher return on investment than other investment options, such as the stock market, would offer. They usually like to play an active role in the business itself and take some equity, which can be very beneficial given the right match.
Venture capital is money provided by investors to fund a business deemed to have ong-term growth potential. You can typically get more funding from VCs than you would Angel Investors, though the funding is harder to obtain. In addition they typically like to play a major role in company decisions and take a significant amount of equity, There are many venture capital firms throughout British Columbia. If you plan to pitch your business to VCs be sure to be prepared with all your ducks in a row.
Apply and Gain Insight
As you can see there are many options for financing your business. Even if you don’t plan on using a particular form of financing, such as a bank loan, going through the process of applying can provide useful insights into your business and help you steer towards success. Finding out why and why not banks and investors would choose to finance your business can provide you with constructive criticism from business experts.