It's nice to see so many announcements in the media that our financial system is still solid and that our financial institutions are still lending money to business. But the truth of the matter is that credit is still tight - especially for small businesses that don't have long track records. If your small business needs money, here are some sources of small business loans you may not have thought of:
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- Micro Loans - Some financial institutions offer small business loans of under $15,000 earmarked for people who would have difficulty getting a traditional business loan. Alterna Savings (operating in Ontario) is one such financial institution. (Applicants need to have good credit and to have taken training in setting up and running a small business.) Ask your Credit Union or Caisse Populaire if they have such a program.
- Community Loan Funds - Community Investment Funds are non-profit organizations dedicated to helping people who can't get the loans they need to get on their feet from a traditional lending institution. Where to Get a Small Business Loan When the Banks Turn You Down presents examples of Community Loan Funds across the country.
- Womens' Enterprise/Resource Centres - Many of the organizations that work to help women succeed in business offer business loans. I've put together a sampling of womens' organizations across Canada and the loan services they offer in Small Business Loans for Women in Canada.
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Hi Susan,
Great post!
Another potential financing source for small business owners is a service called a “merchant cash advance”. It’s not exactly a loan – it’s more akin to accounts receivable factoring but it can be used by any small business that accepts debit/credit card transactions. The small business sells a fixed portion of its future debit/credit card sales at a discount to the merchant cash advance provider – it’s basically like factoring of future sales as opposed to sales that have already been invoiced. It comes at a higher cost than traditional sources of capital but the repayment schedule is tied to sales volumes and it does not require any collateral. It can be very handy for a business with some sales history that’s looking for the growth capital it needs to take the business to the next level!
One such company I’ve come across is Merchant Advance Capital based out of Vancouver – http://www.merchantadvancecap.com.
Cheers!
Dave