In Canada, there are many options available to entrepreneurs who are interested in immigrating to start a business. Once in Canada, immigrant business owners might look for funding to support their venture’s expansion or to get it off the ground. Depending on the unique requirements of a particular business, immigrants may have access to a variety of funding options.
Types of funding
There are several ways to finance a startup or business.
• savings from own resources.
• financial aid.
• both family and friends.
• loans from banks.
• crowdfunding websites such as Kickstarter.
• Angel and venture capital investors.
• programs run by the government.
Many business owners will finance their ventures out of their savings. Paying for things using your own money has the advantage of allowing you to be totally in control of your spending and business operations. Additionally, showing prospective investors that you believe in your company by investing your own money in it enhances your credibility and inspires confidence in it.
A grant is a sum of money given to a company by organizations or governmental bodies to pay for costs like marketing, salaries, equipment, and more. Grants are different from many other forms of funding in that they don’t have to be repaid and business owners aren’t required to give up equity. Grants, however, can be extremely competitive, and each program will have different requirements for eligibility.
Borrowing money
Since they have flexibility over the terms of the investment and the repayment schedule, friends and family funding may appeal to entrepreneurs. A formal agreement that ultimately benefits both parties would be a worthwhile course of action if you want to avoid severing a relationship over money, but you should always make an effort to explain the risks associated with investing in your business to friends and family.
The acquisition of new assets, the sale of an existing business, the purchase of another company, securing capital for ongoing operations, or expansion are all things that Canadian banks offer loans to businesses. When deciding whether to approve a loan, banks look at a set of criteria. These criteria include the business’s industry, the level of risk, and its financial projections. When obtaining a loan, consideration should be given to the term of the loan, the amount being financed, the ability to make payments over time, and the interest rate.
Investors
Using crowdfunding, a business can raise money by asking the public for donations in exchange for stock in the company. A large number of people investing modest sums into your company is typically the key to a successful crowdfunding campaign. Crowdfunding comes in a variety of forms, such as:
• Reward- or donation-based crowdfunding: A company will set a fundraising target and ask for donations in exchange for a token or a receipt for the final product or service that will be produced,
• In exchange for their investment, investors who use equity crowdfunding are given the right to a portion of a company’s sales or profits.
In exchange for equity, angel and venture capitalist investors invest money in businesses. Unlike angel investors, who typically invest in early-stage businesses, venture capitalists invest when a company is already profitable and has a steady cash flow. These types of investors have the major advantage of providing you with invaluable business advice because their success depends on the success of your company.
You could also think about using business incubators. High-potential companies are frequently invited to share incubators’ spaces where they can access a range of supports, including administrative, networking, and advisory services. They depart from the incubator’s premises to pursue the next stage of growth once the business has advanced, which typically takes a few years.
Canadian government programs
The Canadian government finances companies, especially those that innovate in business and technology.
For instance, the federally funded Canada Small Business Financing Program (CSBFP) offers loans of up to $1 million to support both established and start-up businesses that have made sizable investments.
A crown corporation and national development bank, the Business Development Bank of Canada (BDC) is owned by the Canadian government. By providing capital, advice, and loans, they assist small and medium-sized businesses. The BDC has so far committed $47.8 billion to business owners and supports entrepreneurs in all sectors and at all stages of growth.
Through the organizations it manages for regional economic development, the federal government provides assistance to entrepreneurs. According to the website of the Canadian government, FedDev Ontario, the federal organization responsible for the economic development of Southern Ontario, has received over $1 billion in new funding. Similar to this, the Atlantic Innovation Fund assists companies, co-ops, and research institutions in developing new goods and services, marketing them, and taking advantage of market opportunities.
Provincial supports
Also supported by the majority of provinces are businesses and entrepreneurs. For instance, Alberta offers grants and other forms of funding to promote local economic growth. Among the programs are the Community Initiative Program, which offers funding to support initiatives that improve and enrich communities all across Alberta, and the Innovation Employment Grant, which provides businesses with grants for research and development costs. The same is true for British Columbia, which provides a wide range of small business funding grants for economic development.
Helpful resources
Entrepreneurs can access a variety of useful materials and websites to learn more about funding options on their own. You can locate available supports based on your circumstances using a useful tool provided by the Canadian government called “Business Benefits Finder”. The tool offers a customized list of government financing options for your company, including public funds to support the launch of your business as well as start-up loan and capital investment programs. The tool is available by clicking here.
On the website of the Business Development Bank of Canada, there is a page devoted to articles and useful resources that can help business owners when they are starting their companies and looking for funding, as well as with business strategy, planning, entrepreneurship, marketing, and sales, among other things.
A list of incubators, venture capitalists, and angel investors in Canada is kept up to date by the National Angel Capital Organization, a non-profit membership organization.
Designated organization
A business group that has been authorized to invest in or support possible start-ups. The applicant will be required to:
- Contact the designated organization to find out how to get its support,
- Provide evidence to an organization that you have a business plan that is worth supporting and obtain a letter of support from the designated organization,
- Every designated organization deals with you according to its criteria, in some cases, you may be asked to present your business plan in person or submit a description of the business program. When a designated organization feels that your business is able to reach an agreement, it will provide you with a letter of support. You will submit this letter along with your application. This is the evidence you will require to show that the venture capital fund, angel investor, or business incubator is supporting your business plan. On the other hand, the organization will send a certificate of commitment to the authorities. Your application will be reviewed on the basis of both your letter of support and the organization’s commitment certificate. As your application process progresses further, you may be asked to provide further business details before making a final decision on your application. Your application will be refused if you do not provide a letter of support.
You can read here complete information about Canada’s startup visa.