Small Business Funding Challenges
Did you know that one of the top reasons why small business owners in Canada end up failing within the first few years of starting up is due to the lack of funding?
What would happen to your small business and your idea if you needed funding and did not have any? What would you do if your small business needs funding?
Common Thoughts About Small Business Funding
When the topic of small business funding comes up, most people think one of two ways:
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- This is impossible. I am just a small business, why would somebody want to fund me?
- I do not know any investors. Plus, they only fund big companies.
While the majority of people do think this way, those who tend to think outside the box and seek assistance are usually more successful and are able to find funding.
Available Funding Sources
Funding is available for small business owners from multiple sources if one decides to dig a little deeper:
- Family and friends
- Personal credit cards, loans, or lines of credit
- Business loans or lines of credit from banks
- Private investors
- Government funding programs
- Crowdfunding
If you realize that your business needs funding so that you can survive and overcome certain obstacles, searching and applying for funding before you need it is usually recommended.
Most people cannot simply say they need funding and receive it the next day. Planning ahead and having a well-developed business plan will help identify your needs and prepare you for them.
While multiple sources of funding for small business owners do exist, people are still skeptical and worry about borrowing money from the above-mentioned sources.
Government Funding for Small Businesses
Most articles explain different sources such as borrowing from banks, investors, using crowdfunding services, or asking for help from friends and relatives. However, there is little to no mention of government funding for small business owners.
This is surprising considering that there are nearly a thousand government funding programs from all levels of the Canadian government. These programs exist to support entrepreneurship and boost the economy through job creation.
Finding Government Funding Programs
Getting your small business funded is not always easy. The Government of Canada has hundreds of funding programs across the country, and not all funding agencies are familiar with one another or the details of each program.
In many cases, funding programs are specific to location, industry, or a particular funding need.
When looking for funding, be sure to search for programs close to home or those that fund your location. Look for programs that support your specific industry and the exact purpose you need funding for.
If you apply to the wrong program, you are simply wasting your time, as you will be denied funding.
Government funding programs all have set criteria and qualifications that must be met in order to qualify. Some requirements are common, such as location, industry, and funding needs. Others may require you to invest your own money, hire specific types of staff, or be in business for a certain number of months.
Learning more about each funding program can help you determine which ones are right for you.
Different Types of Government Funding Programs
The different types of government funding programs include low-interest or no-interest loans, government-guaranteed loans, government grants that are non-repayable or partially repayable, tax breaks, tax credits, and more.
Planning for Funding
Knowing that funding is available, your next step should be to figure out what you need funding for, how much funding you need, how it will benefit your business, and when you need it.
Once you have done that, applying to these programs to ensure your small business funding needs are covered should be the end goal.
The final piece of advice is not to wait until the last minute to apply for funding. When you realize that your small business needs funding, it may already be too late.