Placing all your investments in a single place is never a wise business strategy. If you branch out your sources of financing, you also get better chances to get a suitable financing which can sustain your particular requirements. Always remember that bankers do not view themselves as your only source of money and displaying that you have sought or utilized different financing options show lenders that you are a practical entrepreneur.
Whether you choose a bank loan, government grant, angel investor or a business incubator, be informed that each of such sources comes with particular demands. It is important for you to know these demands and the advantages offered by each option in order to pick the best one for your needs. At Resourceful Capital Financial Corporation, we know just how important it is for you to select the best financing option for your business needs, so we make sure to have you covered.
The following is the overview of common financing sources that you will want to know and understand:
- Personal Investment
When applying for loans, you are investing some of your personal money, either in cash form or collateral on some assets. It simply proves to a banker that you are providing the long term commitment into your project. Make sure to be open about investing your money because it is a way to convince potential investors to invest in your project.
- Love Money
This is the form of money borrowed by the spouse, family, parents or friends. The banker will consider this as the “patient capital” – the money which will be later repaid as the business profits elevate. When looking to borrow love money, it is crucial to be informed that:
- Friends and family hardly ever have too much capital
- They might like to get equity within your business, so make sure not to provide this away.
- Conducting a business relationship with friends or family should not be lightly taken
- Venture Capital
One of the first things that you have to remember is that such source of funding is not essentially for every entrepreneur. From the very beginning, you must be very informed that venture capitalists look for technology-centered companies and businesses with high development potentials within sectors like biotechnology, Information Technology (IT) and communications. Many of the venture capitalists are getting an equity position within a company so as to assist it execute a promising yet higher danger project. It involves losing some equity or ownership in your business to the external party. In addition to this, venture capitalists also anticipate an excellent return on their provided investment, normally produced when a business begins selling its shares to people. Make sure to choose only investors who can bring relevant knowledge and experience into your business.
Resourceful Capital Financial Corporation has a team of venture capitalists that support strategically high-end companies situated within the promising market. Similar to the majority of venture capital firms, we get involved in startups with high development potential, choosing to concentrate on primary interventions if a company requires large financing amount to get recognized within its market.
Generally, angels are wealthy persons or retired executives of a company who directly invest in small businesses owned and operated by others. These people are normally the leaders within their individual field. They do not just share their network of connections and experience, but their management and/or technical knowledge as well. Angels are bound to finance the business’ early stages with investments ranging from $25,000-$100,000. Business venture capitalists sought bigger investments in the range of $1,000,000.
In return for having risked their money, investors will reserve their right for supervising the management practices of the company. In tangible terms, this normally includes having a place in the board of directors, along with the guarantee of transparency. Angels likely maintain a low profile. In order to meet them, you have to get in touch with particular associations or search sites on angels.
- Subsidies And Grants
It is not always simple to carry innovations to the light to encourage government agencies in providing assistance to Canadian firms. You might have contact this funding in order to aid in covering expenses like development and research, salaries, marketing, productivity improvement and equipment. Technically speaking, a grant is the sum of money given to a business conditionally, which you do not need to repay. In addition, when you have been granted from a certain government source, it’s not unusual to acquire further funding from a source when you meet the requirements of the program.
Obtaining grants may be difficult. There might be firm competition as well as the criteria for awards are normally stringent. Normally, majority of grants need you to complement the funds that you’re being rewarded with and such amount greatly varies, based on the granter. For instance, the research grant might need you to locate only 40 percent of the overall cost. Normally, you will have to give:
- A thorough project description, which include the location
- Explanation of your project’s benefits
- A complete work plan with total costs
- The details of related background and experience on major managers
- Accomplished application forms if appropriate
Also known as accelerators, business incubators normally concentrate on the modern sector through providing help for new businesses in different developmental stages, but then, there are also some local economical development incubators that are concentrated on areas like job creation, hosting & sharing services, and revitalization.
Normally, incubators would invite upcoming businesses as well as other fledgling firms to allocate their premises, along with their logistical, technical, and administrative resources. For instance, an incubator may distribute the utilization of its laboratories allowing a new business to expand and analyze its products more affordably prior to starting with production.
Normally, the stage of incubation could last up to two years. When the product becomes ready, a business normally leaves the premises of the incubator in order to get into the phase of industrial production and be on its own. Businesses which receive this form of support normally work in modern sectors, including information technology, biotechnology, industrial technology, or multimedia. Businesses which were backed by the incubator have a better rate of success of more than five years.
- Bank Loans
This is the most typically used funding source for medium-sized and small businesses. Think about the fact that each bank provides different advantages, whether it is customized repayment or personalized. It is a great idea to look around and locate a bank that meets your particular requirements, including providing value-added consulting services.
Resourceful Capital Financial Corporation provides startup financing to entrepreneurs. Also, you might be able to delay the key payments for as long as 12 months. Such form of financing has been designed for firms in the distribution, services, tourism and manufacturing.
Private Lenders in Canada
Fisgard Capital Corporation
- Interest rates start at 5.99%
- No minimum loan amount and $5,000,000 for maximum loan amount
- Maximum of 2-year term
Alta West Mortgage
- Interest rates of 7 to 18%
- $10,000 minimum loan amount and $2,500,000 maximum
- 25-year amortizations or 1-year interest-only payment
The Money Source
- Interest rates of 12 to 16%
- $10,000 minimum loan amount and $250,000 maximum
- 1- and 2-year, interest-only or blended payments
Capital Direct Lending
- 50 to 20% interest rates
- $10,000 minimum loan amount and $1,500,000 maximum
- 1-year team or may be longer with increase on rate
Resourceful Capital Financial Corporation can be your best source for starting or financing your business. So, make sure not to hesitate to get in touch with us for further questions about our services by calling 1-888-882-0786.