There are a few things you may have to do before you seek funding. These might include: picking a business name, registering your business entity with local, provincial or federal agencies, getting a Business Number (BN), and obtaining licenses and permits.
Of course, this will depend on the type of business you want to operate. More in-depth information can be found here.
Many financial institutions and lenders offer loans for starting or running a small business. Be sure to shop around to compare interest rates, repayment lengths and potential loan amounts.
When you apply for a loan, most lenders will require you to show your business plan and a variety of financial documents. These could include bank statements and tax returns from the previous years. If you’re starting a new business, your own finances and credit could be a major factor in the lender’s decision.
Talk to your bank: You’ll want to have a business plan, estimate of startup costs and business projections completed to help the bank understand why offering you a loan is a good idea.
Alternate lenders: If funding from a bank isn’t available to you, you’ve still got options. You could explore crowdfunding, peer-to-peer lending or look into micro-lending to get the capital you need to get your business going.
Investors can give you funding to start your business or help take it to the next stage. This type of funding usually takes the form of venture capital investments or angel investing.
Venture capitalists usually offer larger loans to somewhat established businesses in exchange for partial ownership and an active role in the company.
Venture capitalists and angel investors have their own criteria for the types of businesses they invest in, the requirements for making an investment and what they hope to gain in return. No matter who you ask for an investment, be prepared for the investor to carefully review your business plan, finances and experience.
Using your own money is always an option. Perhaps you can tap into your savings, current paycheque, or a retirement account. If you’re a home owner, you may be able to use your home equity to take out a new loan.
Every business requires funding. Determining your startup costs will help you understand how much funding you’re going to need.
