small business loans
Growing a business requires money, and most small business owners will need to take out the best small business loans available in Canada. To get finance for your small business in the past, you had to go to your local bank and go through the lengthy process of applying for the best small business loan.
However, the times have changed. The relationship between small businesses and central banks has altered dramatically as the economy improves. Many banks no longer give loans to small businesses as they once did, leaving many entrepreneurs wondering how to get the best business loans in Canada.The good news is that you do not need a traditional bank to seek business funding. Other dependable forms of small business loans are available to Canadian entrepreneurs.
These are also, in many respects, easier to deal with than the big and traditional banks. As there are so many possibilities, it is up to you to do your homework and figure out which financing strategy is ideal for you.
Alternatives to Traditional Bank Loans
Being an entrepreneur now, you can lend the money you need to grow your small business without being jumping through hoops at your local bank with these attractive new options:
Crowdfunding has exploded in popularity in recent years, becoming one of the most appealing ways to raise funds. An entrepreneur can use crowdfunding to fund their idea by posting it on a crowdfunding platform like Kickstarter or Indiegogo, where individuals from all over the world can donate in exchange for a benefit from the entrepreneur. Back in 2012, more than one million successful crowdfunding campaigns were launched, with 17% of those aimed toward business and entrepreneurship. According to Forbes, crowdfunded transactions might total more than $10 billion in 2014. The Globe and Mail have an excellent list of Canada’s top ten most successful crowdfunding initiatives.
- Merchant Cash Advances
A merchant cash advance is a type of loan that gives a business owner a large sum of money in exchange for a percentage of future credit card sales. This type of bank loan involves receiving a significant sum of money and repaying it plus a fixed cost over some time, usually many months. You pay a modest portion of your daily debit and credit card earnings instead of a fixed monthly payment, interest cost, or due date.
Restaurants that are rarely authorized for traditional bank financing), businesses with cash-flow concerns (such as long or unpredictable slow periods), and persons with terrible credit can all benefit from merchant cash advances. You must have been in business for at least one year and take debit or credit cards at your establishment to qualify.
- Micro Loans
As their name implies, Micro Loans are small business loans granted to entrepreneurs to assist them in starting their businesses. Micro Loans differ from bank loans in that they are usually for small amounts and are not based on credit history or collateral. These are tailored to women, minorities, low-income entrepreneurs, and young entrepreneurs. Typically, the process includes business counseling to assist the entrepreneur in increasing their chances of success.
Obtaining capital for your company through traditional bank loans can be difficult, and these alternative funding methods might save you time and rejection along the route. Whatever funding ways you pick, having a sound business plan to back up your company and improve your chances of obtaining funds is essential.