Tips for Financing Your Small Business #financefriday
By: Nigel Soares, Senior Small Business Advisor, Meridian
The old adage “Do what you love and you’ll never work a day in your life” is the mantra many small business owners use to justify the endless time and energy needed to successfully start a small business. And while their passion and energy may be limitless, for many would-be small business owners, their resources are not.
Many people looking to start their own business find that they need start-up capital, whether it’s for purchasing space, equipment or just to establish a healthy cash flow. Securing sufficient credit is crucial when establishing your small business and many people find this process to be an uphill battle.
Let me help guide you with some tips for financing your small business
Create a business plan – A well-crafted business plan is vital for securing financing. Your business plan should outline the following: your business idea, how it fits in the current market landscape, how you plan to make profit, and what your start up budget is. It’s essential that your business plan outline how much financing you require, what the funds would be used for and when you plan to repay the loan.
Look for a variety of financing sources – Funding sources are not just limited to financial institutions. There are a variety of government grants and programs that can help a small business get off the ground. A listing of government grants and loans can be found via the federal government’s Canada Business Network at www.canadabusiness.ca.
Get organized – When meeting with a financial institution to discuss potential lending options for your small business be prepared to bring a lot of financial paperwork with you. In addition to your business plan, you should also bring copies of your personal banking records and statements in order for the financial institution to determine your ability to pay back the loan. Furthermore, it’s advisable to plan for any insurance costs your business may accrue along the way. Just remember to shop around for the best deals – for example if you work in the motor trade industry you could try to get a quote from one sure and then compare their coverage to other providers.
Determine your lending needs – There is a wide range of lending products available to small businesses from operating lines of credits and credit cards to commercial mortgages. A small business advisor can help you navigate your options to ensure you pick the right lending product suited to your needs.
Don’t lose hope if you’re declined – Work with your small business advisor to fully understand why your proposal was declined and they can advise you on how to strengthen your proposal. In some cases, the financial institution may require you to request or smaller loan amount or invest more of your own capital into the business.
More advice and resources for small business owners are available online through Meridian’s Small Business Resource Centre at smallbusiness.meridiancu.ca/. Also, visit Meridian’s new Davisville branch located at 690 Mount Pleasant Road to speak with a small business advisor today. If you need software for your business take a look at the reviews on trustradius.com for example their reviews on API management solutions.