Funding options available to new immigrants will vary depending on the specific needs of a particular business.
Start-up or business financing options in Canada:
Grants
A grant is a sum of money given to a business by governmental agencies or corporations for the purpose of covering expenses, such as research and development, marketing, salaries, equipment and more, grants do not have to be paid back. However, grants can be highly competitive, and each program will have its own eligibility requirements.
Bank loans
Banks have certain criteria that they consider when deciding if they should approve a loan. In securing a loan, it is important to consider the duration of the loan, the percentage being financed, repayment flexibility and the interest rate.
Public funding
Crowd funding is a form of fundraising where a business will ask the public for a contribution, usually in exchange for equity in the company. The followings are type of crowed funding:
- Donation/rewards-based funding: a company will set a fundraising target and ask for donations in exchange for some kind of token or receipt of the eventual product or service to be developed.
- Equity: In exchange for their money, investors get shares in a company
Venture capital & angel investors or incubators
Angel investors and venture capitalists invest money in businesses in exchange for equity. Angel investors will usually fund early-stage businesses, while venture capitalists will invest when the company is already generating revenue and has a stable cash flow.
Business incubators are another option that provides supports in areas such as advisory, networking, and administrative services at the early stage of developments.
Canadian government programs
The Canadian government provides funding for businesses, in particular business and technology innovation.
The Business Development Bank of Canada (BDC) is a crown corporation and national development banked owned by the Government of Canada. They help small and medium sized businesses through financing loans, advisory services and capital. BDC supports entrepreneurs in all industries and at all stages of development and has so far committed $47.8 billion to business owner.
