The Canada Small Business Financing Program makes it easier for small businesses to borrow funds of up to $1 million at low interest rates. Because the Canadian government assumes part of the risk, lending institutions are able to ease some of their loan requirements under the CSBFP. If you own a small business and need funding, the CSBFP is an excellent place to start, as the loan terms are favorable to the borrower. While the CSBFP strives to make funding accessible to as many small businesses as possible, approval isn’t guaranteed. The financial institution lending the money, not the government, has the ultimate say in whether your business gets approved for a loan. If you get turned down, don’t fret. Here are some other grants, loans, and financing options for you to explore.
Government Grants and Financing
Even if the CSBFP doesn’t work out, the Canadian government offers a host of grants to small businesses. Some are available to any small business in Canada, while others require very specific criteria. The CanExport program, for example, offers up to $99,999 if your small business has the potential to develop new export markets. The Career Focus grant provides funding to small businesses that hire young people and give them work experience. The Canada Business Network website lists dozens of government grants and contribution programs. Scroll through them to find out if any apply to your business.
Private Sector Financing
The private sector has many small business financing options. You can seek debt or equity financing or a combination of both. Debt financing means you borrow money from a lender and repay it with interest. With equity financing, investors provide money to grow your business in exchange for an ownership share in it. Rather than paying the investors back, they share in your success if the business does well and assume part of the risk if it fails. Among the debt financing options available are credit cards, bank lines of credit, and microcredit. The last one is useful if your small business doesn’t qualify for a traditional bank loan. With microcredit, the loan amounts are small, but the terms tend to be flexible, and the approval is often fast and easy.
Crowdfunding involves gathering small financial contributions from many people, usually with the help of the internet and social media. The terms of a crowdfunding agreement are yours to set. Some crowdfunding platforms, such as GoFundMe, feature people who donate money without expecting anything in return. Others, such as Launchopolis, let you decide what rewards to offer those who pledge money. If you prefer, you can seek crowdfunding informally through Facebook, Instagram, Twitter, and LinkedIn. Small business owners with hefty social networks can get large sums by reaching out to their personal and professional contacts directly. The CSBFP is a great place to start when trying to get small business funding, but it isn’t the only one. Explore other government programs, the private sector, and crowdfunding to find the right source of funding for your small business.