5 Ways to Fund Your Business

May 15, 2019
9 minute read

Your business is starting to come to life, and now you’re thinking about either getting it off the ground or expanding. Navigating the world of business funding can feel overwhelming. You can use your savings, which many business owners do, but there are other ways to raise funds to help your dream become a reality, fast-track growth, and increase profitability. 

Maybe you’re looking at renting more space to increase production, trying to secure advertising dollars, business insurance, or purchasing raw materials to fulfill a big order. You need money to do this, and you’ll need to figure out how to raise that capital to fund your business. 

Here’s a list of five avenues of funding available to a variety of businesses in Canada.  

What does funding mean in business?

While business funding can happen in a variety of ways, its core definition is when funds are procured for the purpose of starting, running, and/or growing a business. There are many ways entrepreneurs can find funding for their business, from their personal savings or loans to business grants and investors. 

5 types of business funding

In business funding, often the market in which the business is situated will impact the type of business funding available. But before you start applying for business funding, it’s essential to set your business up for success. 

Make sure your company meets the funding requirements

Apart from personal savings and family loans, almost all funding options are specific to a business type. This can be anything from a startup requirement to a not-for-profit. There are funding types that require a certain threshold of revenue in the last fiscal year or maybe even catered towards entrepreneurs working in the field of research and technology. 

Create a business plan

It can’t be emphasized enough that creating a business plan is an essential part of success. A business plan is a document that outlines all aspects of your business, from marketing strategies to projected finances. It generally includes an executive summary that is usually required for funding purposes, although some funding organizations or individuals may ask for a complete plan. 

A business plan can set you up for success by providing tangible milestones and a solid path to profitability, even for new startups. It also helps with financial planning, which can be a challenge for new entrepreneurs. 

Research and make a list

No matter what you’re trying to achieve with your business, research will almost always be an integral part of that. With funding, researching all options available can be daunting. Thankfully there are a lot of ways to go about this. 

Your local business community

The great part about local business communities is that they are no longer restricted to geographical location. With online networking, business communities can span the country, giving broader insight into many different aspects of business, funding included. 

Internet search and databases

This may seem obvious, but an internet search can produce a lot of valuable information. Using keywords like “startup funding,” “business funding,” and even your location, whether that’s provincial or federal. There are also databases, such as Crunchbase, for various types of funding like investors and grants.

Once you’ve compiled some information, create a list of possible funding options to investigate further. Some funding options, such as government programs and grants, have application deadlines. Creating a spreadsheet can help keep track of these deadlines. 

1. Business incubators

Incubators and accelerators are specialized types of resources that are geared specifically to help business owners prepare for when they look for investors. An incubator helps entrepreneurs formulate solid business ideas, work with a business plan, and generally work on a flexible schedule until the business idea or product is ready to pitch to investors. Accelerators do precisely what they sound like: accelerate the growth of existing businesses. 

There are databases such as MaRS Startup Toolkit that can help you find information on potential incubators.

Some examples of business incubators are:

2. Grants and government funding programs

Grants are ideal because they are money awarded to successful grant applicants that they don’t need to pay back. They are basically an investment in your business or business idea that the granting organization wants to see come to fruition. 

The federal government runs various grant and funding business programs for specific industries and communities. These