B Y: G A L I N A K O K H A N , A W A O Y E T A Y O , A N K I T C H A U B E Y , O L O L A D E A N I M A S H A U N

SOURCES OF FINANCE FOR START-UP BUSINESS

IN CANADA

-important to economy- a third of the GDP-labor force-the country’s exports

SMALL BUSINESS IN CANADA

ISSUESLO O K I N G F O R A D D I T I O N A L R E S O U RC E S T O S TA RT YO U R O W N

B U S I N E S S ?

B E I N G U N D E R C A P I TA L I Z E D

T IGHT CASH FLOW

S H O RT-T E R M F I N A N C I A L

R E S T R I C T I O N S

H O W M U C H M O N E Y Y O U W I L L N E E D T O S T A R T A N D T O B R E A K E V E N

HOW DO I START

SOURCES OF START-UP FUNDING IN CANADA

• 1)Personal Savings/Love Money• 2) Crowd-funding• 3) Angels• 4)

Grants and subsidies• 5) Bank loans • 6)

Other sources of finance in Canada

PERSONAL SAVINGS

• 76% of entrepreneurs financed 25%-50% of business from savings

• strengthens ownership• gives freedom and

flexibility• keep a personal

investment of at least 25%

• Need money? - Mortgage your property!

LOVE MONEY

• 10% of small business owners accept a loan from their family and

friends• No impact on credit

history, service fees, no interest rates

• Keep it as business as possible!

• A N O N L I N E P L AT F O R M T O A C C E S S S M A L L D O N AT I O N S BY A L A R G E N U M B E R O F P E O P L E• B E S T- S U I T E D F O R A RT S A N D C U LT U R E

• B E A W A R E T H AT Y O U S H A R E Y O U R B U S I N E S S I D E A W I T H A V E RY L A R G E A U D I E N C E

CROWD-FUNDING

- ATTRACTIVE AND ENGAGING STORY

TIPS TO ENGAGE THE AUDIENCE

- USE VISUAL DATA- NETWORK- RECOGNITION FOR LENDERS- CONNECT AND THANK THEM

wealthy individuals or

retired CEO who invest directly in

small firms owned by others

“ANGELS” • you get their expertise and network of contacts

• a significant initial investment of $25,000 to $100,000

• takes time to secure• accessible to few firms

outside of innovative tech companies

• invest in businesses they have previous experience working with

• require a seat on the board of directors

• Angel Investors Canada can help put entrepreneurs in touch with angelswww.ventureworthy.com

contact specialized

associations or search websites

on angels

HOW TO GET IN TOUCH:

• websites of the National Angel Capital Organization in Canada www.angelinvestor.ca

GRANTS AND SUBSIDIES

• cash, • a reimbursement of

eligible expenses,• a type of tax credit

• cash, • a reimbursement of

eligible expenses,• a type of tax credit

• 5% of start-up funding sources

• money that you don't have to repay

• you're bound legally

• no generic small business grants

• highly competitive• targeted to specific

industry sectors

DOCUMENTATION (GRANTS)

• detailed project description• benefits of the

project• work plan with full

costs• experience and

background on key managers• completed

application forms

CRITERIA:

• Significance• Approach• Innovation• Assessment of

expertise• Need for the

grant

SOURCES (GRANTS)

Federal and Provincial grants

Canada One - a free online magazine

canadabusiness.ab.cawww.canadaone.com

Services of Can-Grants.com an online database

www.can-grants.com

the most commonly used

source of funding for small

and medium sized businesses

BANK LOANS

• solid documentation • a sound track record• excellent credit history • brilliant Business Plan

• for companies in the manufacturing, distribution, services and tourism sectors

• up to $100,000 in financing

• can be repaid over 6 years• borrowers can postpone

payments for a year• good option if you have

mortgage with BDC

good institution that offers

start-up financing to

entrepreneurs

BUSINESS DEVELOPMEN

T CANADA (BDC)

BDC provides support to entrepreneurs who:

•are in the start-up or early growth phase (first 12 months of sales) •demonstrate realistic market and sales potential •Possess experience in the chosen field •who seems to have the trait of a successful entrepreneur •Have a competent management team •Have reasonable financial resources in the enterprise •Can provide personal and credit references

•Working capital: to supplement an existing line of credit •Acquiring fixed assets •Marketing and start-up fees •Buying a franchise

FINANCING POSSIBILITIES

O T H E R S O U RC E S

HUMAN RESOURCES AND SOCIAL DEVELOPMENT CANADA (HRSDC)

- A S E L F - E M P L O Y M E N T B E N E F I T P R O G R A M- I N C LU D E P E R S O N A L I N C O M E S U P P O RT F O R U P T O A Y E A R - F I N A N C E S O T H E R P R O G R A M S I N V O LV E D W I T H E M P L OY E E

T R A I N I N G A N D C O U N S E L L I N G

O T H E R S O U RC E S

CANADIAN YOUTH BUSINESS FOUNDATION (CYBF)

U P T O $ 1 5 , 0 0 0 O F F U N D I N G T O C A N A D I A N S O R P E R M A N E N T R E S I D E N T S

B E T W E E N T H E A G E S O F 1 8 - 3 9 W H O A R E N O T F U L L -T I M E S T U D E N T S W I T H A M I N I M U M I N V E S T M E N T O F 1 0 %

O T H E R S O U RC E S ( A L B E RTA )

ALBERTA WOMEN ENTREPRENEURS (AWE)

F I N A N C E S Q U A L I F Y I N G W O M E N ’ S V E N T U R E S U P T O $ 1 5 0 , 0 0 0 N O M AT T E R T H E I R B U S I N E S S S TA G E , W H O C O N T R O L A

M I N I M U M O F 5 1 % O F S H A R E S ; O F F E R S F L E X I B L E R E PAY M E N T O P T I O N S A N D T E R M S U P T O 5 Y E A R S

O T H E R S O U RC E S ( A L B E RTA )

ENTREPRENEURS WITH DISABILITIES PROGRAM

- F O R P E O P L E W I T H A D O C U M E N T E D D I S A B I L I T Y - F U N D E D BY T H E F E D E RA L G O V E R N M E N T

T H R O U G H W E S T E R N E C O N O M I C D I V E R S I F I C AT I O N C A N A D A ( W E D )

- BUSINESS AND INVESTMENT ARE ALWAYS IN CONTINUOUS GROWTH IN CANADA

- INNOVATION AND ECONOMIC GROWTH ARE TOP PRIORITIES

- CANADA IS A LEADING PROMOTER OF BUSINESS INVESTMENT IN THE WORLD

- THE ONLY THING LEFT IS TO CHOOSE THE BEST SOURCE OF FINANCING AND START!

CONCLUSION

Work Cited: (*All statistical data was taken from Statistics Canada and Industry Canada (2007-2011))1) Thompson, David A.. "Sources of Business Financing." Boyneclarke. N.p., n.d. Web. 30 Mar 2014. <http://boyneclarke.com/resources/entry/sources-of-business-financing>.2) "Canada Small Business Financing Program." Industry Canada. N.p.. Web. 30 Mar 2014. <http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/Home>.3) "How to Finance Your Start-Up Business." Small Business BC. N.p., 18 Feb 2010. Web. 30 Mar 2014. <http://www.smallbusinessbc.ca/starting-a-business/how-finance-your-start-business>.4) "Start-up financing sources." Entrepreneurs First BDC. N.p., 13 Jul 2010. Web. 30 Mar 2014. <https://www.bdc.ca/en/advice_centre/articles/Pages/starting_financing.asp&xgt;.5) Ward, Susan. "8 Sources of Business Start Up Money." Small Business: Canada. N.p.. Web. 30 Mar 2014. <https://www.bdc.ca/en/advice_centre/articles/Pages/starting_financing.asp&xgt;6) Weaver, Ryan. "The Top 6 Sources of Start-up Funding in Canada." Backbone. N.p., 7 Oct 2013. Web. 30 Mar 2014. <http://www.backbonemag.com/Backblog/the-top-6-sources-of-startup-funding-in-canada.asp&xgt;7) "Alternative Financing Options for Small Businesses." Business Link. Alberta's Business Information Service . N.p., n.d. Web. 31 Mar 2014. <http://www.canadabusiness.ab.ca/docs/Alternative_Financing_Options_for_Small_Businesses.pdf>.8) "How will I Finance my Business." Seer. N.p.. Web. 30 Mar 2014. <http://www.saskeast.com/businessSolutions2.php?pg=finance&sub=4>.9) "Financing your new Business." Government of Canada. N.p., 06 Dec 2013. Web. 30

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2014