Business Financing in Canada
Do you have the money you need to start your business? While many new small businesses are financed out of their owners’ pockets, many others need money from other sources to get off the ground. This page presents the main small business financing options for financing a new business in Canada.
Take Past Financing Techniques to the Next Level
As your company grows, its need for cash may also increase. Finance sources you might have tapped as a startup company are usually still available to you. Your company may qualify for loans from the Small Business Administration and your needs may fit crowd funders. We are potentially more interested now than before, because you have a history to show and we have a clearer picture of your firm’s future growth.
Factoring: Sell Your Accounts Receivables for Fast Cash
Factoring is a finance method that lets you quickly access cash you’re owed by customers. A factoring company agrees to buy your account receivables at a discount and service them for a preset term. Slightly more expensive than a bank’s interest rate on a loan, factoring puts money from your accounts onto your ledger in days. Most accounts receivables, in contrast, pay within 30 to 60 days.
Lease, Don't Buy, Capital Equipment
Emerging small businesses exchange the challenges of a startup for those of a growing company. Whether your company is considering a new building, hiring new employees or creating new products, it will likely need as much cash as it can find. Leasing capital equipment can keep your company’s cash flowing. This process may save companies money in the short term, but costs more over the long haul.
Sale-leasebacks: Leveraging Equipment for Cash
What happens if you like the idea of leasing, but your company owns its equipment? Sell your equipment to a company specializing in sale-leasebacks and lease it back from the firm. In the short term, this financing technique can save you money versus loans you may have had on your equipment. It can, however, cost more over the term of your lease.
Joint Ventures, VC and IPOs: When You Need Big Money
Whether you want to cash in on your company’s success or take it to another level, there are ways your business can access large chunks of cash. Joint ventures and venture capital infusions are financing options that exchange cash and expertise for a stake in your company. An initial public offering also brings new investors and potentially the most money to your company. It is, however, costly and time-consuming to achieve. Depending on the investment made, any of these techniques can result in your becoming a minority stakeholder, as new investors crowd you out.
About Financing of Equipment in Canada
Canada’s equipment financing industry finances billions of dollars’ worth of equipment along with capital expenditures each year. This industry is a huge driver in the economy of the country. Business owners are for the very first time getting increasingly confident on account of this. 50% of individuals who participated in a recent survey in the US (and we are of the view that it’s the same in Canada) were of the view that the overall business atmosphere will tend to move in the upward direction.
Auto Financing in Canada
In case of auto financing, there are various determinants that impact the rates you receive. These are credit rating, duration of the loan, type of vehicle and down payment. By carrying out some amount of analysis, you can get a lot of information as you look around for the options of financing. Vehicle financing here is based on an interest-loan that is fixed. Hence, you need to pay the same quantity of finance charges irrespective of whether you pay it early or furnish regular payments.