There is no universal formula to finding financing for your business. Each lender or investor will have different requirements – not all options will be available to you. Their criteria might include credit history, management ability, stability of the business, or quality of the business plan. Some financing is only available to businesses in certain sectors, activities, or geographic regions.
What lenders and investors are looking for
Every lender and investor will have different criteria you must meet before they will finance your business. Make sure you understand exactly what each one needs. Your job is to persuade the lender to give you money – make sure you have a compelling, memorable presentation.
See the Canada Business Network for an extensive guide on how to secure equity financing from investors.
At minimum, make sure you have:
- A strong credit score
- The right combination of education and experience for your business – how long have you been running this business? What relevant experience or education do you have that will help your business be successful?
- A business plan – your lender will want to see it
- Focus on writing and understanding your financial statements
- Understand the type of business you're running – is it low risk or high risk?
- A clear list of loan details:
- How much money you want to borrow
- How long you need to repay the loan
- What you will be using the money for
- How much money you are personally investing in your business
- A good relationship with your lender:
- Find out what services they offer
- Give the manager all the information they required as quickly as possible
- Be on time with all documents, payments, and meetings
- Borrow only what you need, only when you need it
- Make realistic repayment commitments
Make sure you talk with your accountant, lawyer, financial advisors, and/or business consultants before you enter into any financial agreement.
Understand business terms and key financial ratios
When you're working with investors and lenders, you will run into complex financial terminology and financial ratios you need to understand. Use the BDC's Demystify Your Banker guide (PDF) to make sure you're speaking the same language.
Want to know more?
If you still have questions, talk to our team. We'll help you find the answers you need.Contact us