Finding new financing sources
To keep your business alive you may need to reassess your financing mix. As part of your cash flow analysis, think about which projects could be paid for by a loan (rather than cash) and determine the exact amount of money you need.
The typical financing sources, beyond government and bank loans, include:
- Family and friends – This includes contributions by your spouse/partner, relatives and friends.
- Venture capital – Typically will be looking for high-growth businesses and an equity position.
- Angels – Investment is direct by an individual who will often contribute knowledge, networks and expertise to ensure a return.
- Business incubators – Typically are focussed on accelerating growth and provide access to advisory services. They may be tied to local economic development goals, such as job creation through tourism.
- Business development banks – the Business Development Bank of Canada is a key source of financing for SMEs
- Crowdfunding – This is a method of raising funds through the collective effort of individuals. This approach can provide access to a wider pool of potential investors.
If you do secure new financing sources, make sure you fully understand and are comfortable with the terms, conditions and expectations before moving ahead. Stay calm and discuss with a trusted advisor or mentor.