7 Ways To Fund Your Small Business Startup

You have a great business idea and you created your business plan. You are ready to launch your small business but one thing is missing. Funding for your Startup.

When searching for funding for your small business you have to consider all options and select the one most suites for your needs and your ability to obtain the funds.

To help you with your funding search for your small business, here are 7 funding sources:

Source 1: Use your own funds

Most small business startups are self funded, meaning you as the owner are the one who funds the entire business. In order to do so, you most likely are taking money out of your savings accounts, borrowing from your existing credit cards, lines of credit and maybe looking at a home equity loan if  you are a homeowner. The good thing about funding the business fully on your own (if you have the money) is that once everything goes well with the business, you are 100% the owner and all of the money coming in, is yours. However the risk of investing all of your money in the business is if the business turns south and you are left to pay back the borrowed money with no income coming in from your business.

Source 2: Your family and friends

Who better to give you that extra little push when you need it then your family and your friends. The fact that they know you well and know your character inside and out, they will be more willing to invest in you (not even thinking about the business), simply for the fact that they will be helping you. The good thing about borrowing from family and friends is that you may be able to get the funds you need from a group of people rather then just one source, and asking friends/family for the money is a lot of times more likely to be a “yes” then if you were to ask the banks. However the negative side of doing so is that if things to bad with the business, your relationships may be at stake. It is always important to let your family and your friends know the risks.

Source 3: Start a KickStarter/CrowdFunding campaign

Most of us are very internet savvy now, and launching a crowd funding campaign shouldn’t be a problem. With a crowd funding campaign, anybody can make online “donations” to help you fund your small business startup. The process typically involves pre ordering your product or service as a reward for donating (or investing) the money. This is a newer way of searching for money for your business, but since it is online, the amount of funding you may receive is dependent on how many people see your campaign. So get to sharing!

Source 4: Join Entrepreneur and incubator groups

Yes I know, they are boring because all people ever do is talk about themselves. But, there are many great incubator and accelerator groups pretty much in any city across Canada and often they are part of larger companies offering the service for free to startups. The purpose of these groups is to spur innovation among entrepreneurs. You may get lucky and find funding.

Source 5: Apply for government funding

The Canadian government has over 800 government grant, loan and tax break programs available for small business owners across Canada. As a startup, you may be able to benefit from government funding that can assist you with hiring and training staff, purchasing land and/or equipment, with marketing, advertising and much more. Consider getting access to the Funding Database in order to see all programs that may be available for your small business.

Source 6: Get a business line of credit or loan

Not a easy source to get funding from especially if you are a new business. Since banks and private institutions look at your business history (and you don’t have any) it makes things a lot more difficult. However there is still a chance if you have an excellent business plan and great personal credit you may be able to obtain a loan, or a line of credit for your small business.

Source 7: Private investors is the word

Surely you’ve seen SharkTank. Well the situation is not any different, minus maybe a few celebrities and being on television. The same situation applies. You would start by presenting your business plan to a potential investor who in turn would “make you a deal”. Most private investors want some sort of track record of success before they even entertain any startups so it is a good idea (if you don’t have any business experience) to show them work related experience. If you seem like you know what you are doing, and your business plan is good, pitching to potential investors is the way to go. You can find over 800 private investors available to Canadians in our Funding Database. The negative of using private investors as a funding source for your small business is that they often ask for a large percentage stake in your business, and if not that, they do ask for a higher interest rate on the money they lend you.

Whatever source of funding you opt to go with for your small business in Canada it is important to have your business ready when applying for funding. TO ensure you have your business ready, be sure to use our Small Business Startup Portal. The tools we provide will guide you along the way to starting your small business, will help you create your business plan and help with the search for funding from private and government funding sources.