BC Business
5 tips to help budding business owners get financing
Jelly Marketing owner Darian Kovacs chats with clients
It’s no big secret that younger generations are choosing to chase the dream of opening their own enterprise over the cozy corner office that their predecessors once coveted. Whether it be a side hustle, a startup or a sole proprietorship, accessing the financing and resources you need when starting a business has proven to be a difficult hurdle—and even tougher if you’re a young entrepreneur.
However, access to startup capital has improved since the turn of the millennium, with financial institutions and governments creating an abundance of programs to help new business owners overcome the traditional funding roadblocks. Out of the 51.3 percent of small and medium enterprises in Canada that requested funding between 2014-2016, over 82 percent gained approval for financing, according to Statistics Canada’s survey on financing and growth of small and medium enterprises.
Here are five of the ways that you could get funding for your small business as a young innovator.
Formerly known as the Canadian Youth Business Foundation, Futurpreneur isn’t just a source of financing. The non-profit also offers mentorship programs so that up-and-coming innovators can get advice from some of the most successful business owners in the country for up to two years.
What are the numbers? The organization offers collateral-free loans up to $15,000, but thanks to its partnership with Business Development Bank of Canada (BDC), entrepreneurs can access up to $45,000.
Depending on which province you are in, there are a significant number of government grants or initiatives that budding entrepreneurs can access. Granted.ca is a great Canadian-based resource that helps entrepreneurs locate and secure grants for hiring, training, or market expansion. One of the best things is that if an entrepreneur doesn’t receive funding, they do not owe any money to Granted.
Who can apply?Businesses that have been operating for more than a year, cleantech and other tech startups, or innovative companies could qualify to receive grant funding through Granted.
Although it isn’t a traditional or reliable source of funding, winning an award can provide smaller influxes of funds, which could be especially helpful to run some lead-generating campaigns on Facebook or Google or at the very least give your business a PR boost.
Which award would you choose? There are a more than a handful to mention. One of the most prestigious is the EY Entrepreneur Of The Year awards. Meanwhile, female entrepreneurs can apply for ?RBC’s Canadian Women Entrepreneur Awards.
From its self-employment program to business loans of up to $150,000, Community Futures focuses on providing necessary tools to an organization’s owners. The not-for-profit focuses on economic development in rural B.C. and is a source of financing and support for small and medium enterprises. Its self-employment program helps aspiring business owners who are claiming employment insurance to build their company and access to ongoing advice and support.
Who can apply? Community Futures has offices across B.C. including Prince George, Haida Gwaii and Penticton. To apply, interested candidates must live in a rural area where Community Futures operates and be eligible for employment insurance.
There’s a belief that big banks will always say no to growing businesses and innovative ideas. But in reality, that couldn’t be further from the truth. Although lending criteria might be slightly stricter at a bank, it is possible to get a loan for your business idea as long as you have a feasible plan. After all, bankers do not just represent their financial institution; they’re often valued members of the community, too.
Which loan should I look at?Some of the big banks have partnered with the federal government to give organizations access to more capital. For example, the Canada Small Business Financing Program lets new and existing companies borrow up to $1,000,000—85 percent of which is guaranteed by the federal government.
As a young entrepreneur, it can be disheartening to hear that you didn’t receive funding. But with so many options available, the right source of capital is only a few keystrokes away.