Whether you're launching a new business or want to scale an existing enterprise, having access to capital when you need it can greatly impact your ability to turn your business plans into reality.\r\n\r\nLike many business owners, you may not be able to personally contribute all of the funds required to start or scale your business. Small business funding and financing can help you bridge that gap. If you're a B.C. entrepreneur, this article will answer questions you may have before you start applying for small business loans.\r\nLoan eligibility\r\nSmall business loans are typically provided by financial institutions or by local, provincial, or federal governments. Each loan program has its own eligibility requirements, but government loans typically have stricter requirements regarding eligible businesses. Meanwhile, loans from financial institutions are available to most types of businesses that meet the baseline requirements. \r\n\r\nRegardless of which type of loan you're planning to apply for, you'll find a few key eligibility requirements. These are typically:\r\n\r\n \tA detailed business plan demonstrating you have carefully worked through the costs associated with starting or growing your business, and that you have a clear plan for generating revenue and repaying the loan.\r\n \tA credit history report demonstrating you've paid off past loans or credit card balances on time. An excellent credit score increases your chances of getting a loan at a favourable rate. \r\n \tDemonstrated commitment to your business, usually shown through your own personal financial contributions to the business. This shows the lender that you have skin in the game.\r\n \tCollateral against the loan, such as personal assets.\r\n\r\nIn addition to these standard requirements, loans funded by government programs may be designated for certain industries, demographics, or have other eligibility requirements based on the goals of the program.\r\nFunds and financing options\r\nThere are many funding and financing options available to B.C. small business owners, and we’ll give you some tips for where to start your search for funds that your business is eligible for. To get you started, here are a few to look into:\r\nBDC Small Business Loans\r\nThe Business Development Bank of Canada (BDC) is a financial institution devoted to Canadian entrepreneurs offering loans to businesses at any stage of their development. BDC Small Business Loans can be easily accessed through an online application and offer up to $100,000 to eligible small businesses. \r\nB.C. COVID-19 Economic Recovery Funding\r\nGiven the challenges faced by small businesses as a result of the COVID-19 pandemic, the government of B.C. has created the COVID-19 Closure Relief Grant. You may be eligible for this if your small business was ordered to close due to public health orders. If you are not eligible, there is a list of additional COVID-19 relief loans and grants offered by both the provincial and federal governments that you can look through.\r\nUBC Small Business Accelerator Program Funding Guide\r\nYou don’t have to be a UBC student or alumnus to take advantage of the great resources they’ve put together as part of their free online Small Business Accelerator, including a funding and financing guide. You’ll find a list of directories you can use to search for available loans and grants, as well as a list of financing options for specific groups such as First Nations, women, and youth applicants.\r\nHow to apply for a loan in BC\r\nIf you're ready to apply for a loan to take your British Columbia-based business to the next level, your first step should be to identify the loans you’re eligible for. Loan directories are tools that enable you to compile a list of available loans in one place, saving you a lot of research time.\r\n\r\nTwo excellent directories are Smarter Loans for loans from financial institutions and the Government of Canada's Business Benefits Finder. Here, you'll be able to limit your search to loans that are available to B.C. businesses and the type of loans your business qualifies for. WorkBC also provides a list of loans, grants, and other types of financing available to B.C. businesses, along with a list of other incentives and tax credits you may also qualify for.\r\n\r\nOnce you select the loans you want to apply for, confirm that you meet the eligibility requirements and identify the documentation needed to apply, as well as any application deadlines.\r\n\r\nIf you are approved for a loan, it's important to understand the payment schedule so you can make sure it's realistic for you based on your business plan. Find out if there are flexible payment plans, what the penalties are for loan payment deferrals, and how frequently principal payments and any interest payments need to be made. \r\nWhat you can use a business loan for\r\nThere are lots of business-related expenses you might want to use a loan to help cover, including equipment, staff wages, rent or mortgage payments on your place of business, leasehold improvements, office supplies, advertising costs, inventory, research and development, and software, just to name a few. \r\n\r\nHowever, not every loan is eligible to be used however you see fit. It's possible the loan you are applying for has limitations on how the funds can be used. For example, the Canada Small Business Financing Program, which is available to B.C. business owners as a loan through financial institutions, cannot be used to finance inventory, research and development, or franchise fees, among other excluded categories. \r\n\r\nYou can use your business plan to identify the main expenses in your business you require financing for, and crosscheck if the loans you’re applying for can be used for those expenses. For general expenses, businesses may opt to apply for a flexible loan, such as a line of credit (also known as operating credit), which typically has more favourable rates than a credit card and can be used for regular business operations.\r\n\r\nWhether you have a great idea but lack the funds to get it off the ground, or your company is ready to grow, but you need to invest money into expanding your capacity, a loan can help you reach your business goals faster. As a B.C. business owner, you have access to a range of loans from both financial institutions and the government. With a strong business plan, you're already on your way to obtaining a loan that can help you take your business to the next level.