Financing is Available to You

You can raise new capital to grow your business in several ways:

a. Bootstrapping

Bootstrapping means finding the means within your company to come up with additional funding. For example, you can look at ways at reducing your expenses so that you can use your profits or retained earnings to grow your business, instead of borrowed money.

You can also find new revenue streams and direct the additional profits to your growth initiatives.

• If you own your facilities, consider earning passive revenue by renting out your facility when it’s not in use.
• Allow other companies to advertise on your website.
• Re-position your products or services to appeal to new markets to increase sales.
• Use a discounted pricing strategy or a promotional campaign to increase sales.

The main advantage of bootstrapping is your business will have more equity (as defined by assets minus liabilities) because of your lower debt obligations. A lower debt load also makes it easier to raise additional capital should you need it. However, you want to be careful that you don’t get into a negative cash position by being undercapitalized.

b. Tapping into Private Sources

You can use your personal savings, credit cards, lines of credit, or personal loans to finance your growth, as you might have done during start-up. You can also ask friends and family to help finance your expansion plans. Be sure to keep them informed of how you are using their funds, and set up a repayment schedule.

c. Taking Advantage of Tax Breaks, Subsidies, and Incentives

The provincial and federal governments offer tax breaks, subsidies, and incentives to businesses for initiatives that they feel are priorities. The Government of B.C. tax incentives for small business can be found on the Ministry of Finance website. You can find information on federal programs at the Canada Business website.

You might be eligible for federal and provincial government programs to help you finance your growth. Refer to our Overview of Government Financing document, which provides a description of the funding programs available to B.C. businesses, eligibility criteria, and contact information.

Since the application process varies from program to program, you should contact the coordinator of the program that you’re interested in to find out what the specific application requirements and process are.

d. Applying for Commercial Loans

As an established business, you may have more success with banks. Make sure your business plan is up to date, shows your ability to manage your loan payments, and includes a clear description of your business and contingency plans. Be aware that banks are usually reluctant to make unsecured loans, so you must be willing to put up the collateral needed to get the loan.