Canada provides numerous options for entrepreneurs seeking to arrive in Canada to begin a business. Once they arrive, these newcomers in Canada look for funding to get their businesses started or to support their growth. Moreover, funding options available to immigrants/ newcomers in Canada may vary depending on the specific needs of particular businesses. 

Types Of Funding 

Startup/ business financing alternatives for newcomers in Canada include: 

  • Grants 
  • Friends & Family
  • Personal savings
  • Bank loans 
  • Crowdfunding platforms
  • Government programs 
  • Venture capitals 
  • Angel investors 

 

Many entrepreneurs utilize their savings to fund their businesses. The advantage to using your own money is that you have complete control over your expenses & you aren’t indebted to anyone. In addition, investing your money in your business builds credibility & demonstrates your confidence in the business to potential investors. 

A grant is the sum of money given to a business by government agencies & corporations for covering expenses, like research & development, equipment, salaries, etc. Unlike many other types of funding, grants/ donations do not have to be repaid & business owners don’t even need to give up equity. However, grants can be highly competitive & every program will have its own specific eligibility requirements.

Borrowing Money 

Seeking funding from friends & family can be an appealing alternative to entrepreneurs as it allows for freedom in determining the conditions of the investment & the repayment schedule. 

However, to avoid harming a relationship over the issue of money, you must try to describe the risks involved in investing in your business to friends and family, thus creating & signing an agreement that benefits both parties. 

In addition, for newcomers in Canada, Canadian banks offer business loans to help with the purchase of new assets, selling/ acquisition of new business, securing capital for day-to-day operations, etc. Banks have specific criteria to consider when deciding if they must approve a loan or not. These criteria include the industry of business, risks involved, & financial projections of the business. Thus, in securing a business loan, it is vital to consider the loan duration, percentage of finance, interest rate, & repayment flexibility. 

Investors 

Crowdfunding is a form of fundraising wherein a business will ask the public for contributions in exchange for equity. Successful crowdfunding takes place through numerous people contributing small/ minor amounts for the start/ growth of the business. There are various forms of crowdfunding, like:

  • Rewards-Based Crowdfunding

A company will set a fundraising target & ask for donations in exchange for some kind of receipt/ token of the eventual product/ service that must be developed. 

  • Equity Crowdfunding

In exchange for their money, investors acquire shares in the company/ business along with the right to a specific portion of revenues/ profits from a particular product. 

Venture Capitalists & Angel Investors invest money in such businesses in exchange for equity. In addition, angel investors generally fund early-stage businesses, while venture capitalists fund the company when it’s already generating revenue & has a stable cash flow. One significant benefit of these kinds of investors is that they offer invaluable advice to help your business succeed & grow. 

Moreover, business incubators are another alternative to consider. Incubators tend to invite high-potential businesses to share their premise, where they obtain numerous support in departments like networking, advisory, administrative services, etc. Once the business is more developed, the owners leave the incubator’s premises to pursue the further stage of growth. 

Canadian Government Programs 

The Canadian government funds businesses, specifically in business & technology innovation for newcomers in Canada. 

For instance, CSBFP, i.e., the Canada Small Business Financing Program, is a government-sponsored program that offers loans up to $1 million to start/ grow a business or help another established business with a significant investment. 

The BDC, i.e., Business Development Bank Of Canada, is a crown corporation & national development bank owned by the Canadian government. They help small as well as medium-sized businesses through financing loans, advisory services, & capital. In addition, BDC supports entrepreneurs in almost all industries & development stages. Well, so far, it has committed over $47.8 billion to business owners. 

The federal government offers entrepreneurs support via regional economic development agencies. For instance, FedDev Ontario is a federal economic development agency for Southern Ontario, offering around $1 billion in funding. Similarly, the Atlantic Innovation Fund supports businesses, research institutions, & co-ops to help businesses create & market new services and products, thus responding to market opportunities. 

Provincial Supports 

Most Canadian provinces provide support to businesses & entrepreneurs. For instance, Alberta offers grants & other funding to stimulate regional economic development. Some of the programs include the Community Initiative Program, which provides funding to support initiatives throughout the province. Similarly, there is Innovation Employment Grant, which offers businesses with grants/ donations to carry out research & development expenditures. 

Moreover, British Columbia has many economic development funding grants for small businesses. This includes the Small Farm Business Acceleration Pilot Program which helps small as well as new farm businesses in the province to make significant investments. 

Helpful Resources

There are numerous other helpful resources & websites that entrepreneurs can access to research funding alternatives. 

The Government of Canada has a tool called ‘Business Benefits Finder’ that allows you to recognize available support depending on the circumstances. The tool offers a customized set of government financing programs for your business. In addition, public funds can help start your business ventures & programs to start-up loans & capital investments. 

The BDC has a page dedicated explicitly to helpful tools & articles that offer advice & information to entrepreneurs when beginning a business & seeking funding along with business strategy, marketing, entrepreneurial skills, sales, planning, etc. 

Furthermore, the National Angel Capital Organization is a non-governmental membership association including angel investors, incubators, & venture capitalists throughout the nation.