Capital Expenses and Funding Options for Small Businesses
Capital expenses are something that all small business owners must deal with sooner or later. Hardware, software, equipment, infrastructure, machinery, and more all come with huge price tags, and not every entrepreneur is ready to make those payments.
So how are these business owners expected to fund these purchases? If you’re not inheriting the money from a long-lost relative, winning the lottery, or appearing on Dragon’s Den and getting a deal, where are the funds coming from? You can’t just not buy these necessities and hope everything works out for the best. So, where do you go?
This list will have the answer. Check out our list of funding that is available for small and medium-sized businesses across the country. There’s a good chance you’ll find some programs that will work to get you past these issues and benefit your business.
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Canada-Wide Incentives
Regardless of your sector, field, or size, there are some fantastic programs available across the country to help you with the funds you need to make the purchases to improve your business. Many are repayable but come with plenty of flexibility and great terms.
Agriculture and Agri-Food Canada - Canada Dairy Processing Investment Fund: Capital Investment Projects
If you’re a dairy processor, you can get funding to help buy new infrastructure or equipment, improve your manufacturing technology or process, or modernize and/or expand your facility, and more. Non-profits and for-profits of small and medium sizes can qualify if non-profits manufacture the product for sale and the products of for-profits result in broad benefits.
Canadian Heritage Canada Cultural Spaces Fund
Non-profit organizations should take advantage of this grant program if they need to renovate or build for the purpose of arts and heritage in any form, such as preservation, exhibition, creation, or presentation. You can qualify for half of the costs of renovation or construction to be covered and even to purchase any specialized equipment to do so.
Agriculture and Agri-Food Canada Advance Payments Program
This loan guaranteed can be what you need to make a big, necessary purchase for your agri-food or agriculture business no matter whether or not you’ve qualified for a grant or have been able to apply for another incentive. Provided that you are a cooperative, corporation, or partnership, with the majority of the shareholders being Canadian, you own whatever you produce and are responsible for marketing it, and you are a Canadian citizen or permanent resident, you can access these funds.
Agriculture and Agri-Food Canada: Canadian Agricultural Loans Act Program
This is yet another funding program made for farmers and producers. Farmers can access this loan program to develop, start, or improve their farms, and cooperatives can use this to process, market, and distribute their products. Both can use the funds on capital expenses such as buying buildings or land or build or improve existing buildings. You will have to make a business proposal directly to a credit union, chartered bank, or Caisse Populaire since Agriculture and Agri-Food Canada do not deliver the program themselves.
Farm Credit Canada (FCC) Equipment
Through FCC you can find the financing you need with the option to either purchase your new equipment outright or buy it after leasing it first. This gives you access to the new equipment that you really need right away. Working with FCC means that you can have no administration fees, low down payment, and terms that are flexible.
Farm Credit Canada (FCC) Environmental Solutions
If you are looking to purchase new equipment that will allow you to switch to renewable sources of energy, this program from FCC is for you. Upgrading to clean energy can save your business money. The terms are very flexible and include benefits such as deferred payments and interest-only payments.
Farm Credit Canada (FCC) Women Entrepreneur Program
Women entrepreneurs who are in the agri-food, agriculture, or agri-business sectors can access funds dedicated by FCC to help finance purchases needed to start or grow a business. This is a loan with low down payments and flexible terms.
Farm Credit Canada (FCC) Credit Lines Advancer Loan
If you’re a farmer looking to make capital investments for your agriculture business, the Advancer Loan may be suitable. You will pay interest on the outstanding amount, but benefits include reduced payments compared to a bank, interest-only payments, and the option of variable or locked-in rates.
Farm Credit Canada (FCC) Land and Buildings
This loan program can help with expanding buildings or land for your farm. As with other FCC programs, you will have flexible terms and payment options, with no set minimum or maximum funding amounts.
Farm Credit Canada (FCC) Farm Transfers
This program offers funding to expand or build your farm through a land transfer. It can support transferring ownership to the next generation or expanding operations. Sellers receive guaranteed payment, and buyers may not need a down payment.
Business Development Bank of Canada (BDC) Xpansion Loan
This loan from the BDC offers flexible terms, including postponed payments, to help businesses make important purchases. Personal assets are protected.
Business Development Bank of Canada (BDC) Wholesale Financing: Indirect Financing
This program funds leasing and finance companies so they can support more small and medium-sized businesses. It is mainly tailored to larger finance companies but also supports smaller businesses.
Business Development Bank of Canada (BDC) Wholesale Financing: Syndicated Financing
This program helps provide funding to businesses by participating in existing operating lines of credit and term loans with other lenders.
Business Development Bank of Canada (BDC) Indigenous Entrepreneur
Indigenous entrepreneurs can receive financing for fixed assets, working capital, or exporting. A portion of the loan interest is donated to a registered charity of your choice.
Business Development Bank of Canada (BDC) Commercial Real Estate Financing
This loan supports purchasing buildings or land, offering up to 25 years to repay, postponed capital payments, and protection of personal assets.
Business Development Bank of Canada (BDC) Business Transition Custom Financing
This program helps finance the purchase of an established or high-growth business with solid financials and management.
Business Development Bank of Canada (BDC) Equipment Purchase Financing
This program provides funding to purchase new equipment such as technology, machinery, or vehicles, including installation, shipping, and training.
Business Development Bank of Canada (BDC) Small Business Loan
Small and medium-sized businesses with at least 24 months of revenue can qualify to fund assets such as equipment, software, or intellectual property.