You need to spend money to make money.
Tired as this cliché may be, it does hold a certain truth, particularly when starting a small business. Good news! Although it does involve some initial investment, launching a new venture or enterprise doesn’t take a lot of money.
Before considering options to fund your business, consider both the one-time start up expenses and the operating costs you’ll need to keep in mind. These costs represent the initial investment you’ll need to make.
Consider the various ways you can fund your business. These include, but are not limited to
- angel investors
- small business loans
- small business grants
One of these may be all you need, or you may wish to combine funding sources. Alternatively, if you wish to use as little investment capital as necessary to start your business, consider bootstrapping.
Small Business Loans
To apply for a commercial loan from a bank, financial institution or credit union, take the time to identify why you need a business loan. The financial statements you prepare as part of your business plan can help you determine how much you’ll need. Be sure your business plan is complete: it should include several years of past and project financial statements for your business. Your thorough business plan should also include
- a statement of your own experience
- analysis of the market your business will serve
- statements of collateral, which specify the type and value of the assets you will use to secure your loan
Be prepared to present your personal credit history, as well as your business credit history. You can request your credit report from either TransUnion Canada or Equifax.
Still unsure which option is best for your small business? The knowledgeable team at Lift Legal can help you consider each of the options and create a thoughtful plan to set up the capital you need.
Contact us today to learn more.
The information on this blog and website is provided by Lift Legal for educational purposes only. It is intended to give readers a general understanding of the law, not to provide specific legal advice. Information contained in these pages should not be used in place of competent legal advice from a licensed, practising lawyer in Alberta. Furthermore, by using this blog and website, you understand that no lawyer-client relationship exists between you and Lift Legal.