An article by Susan Ward suggests that every small business in Canada has to seek funding at any given period of its operation in the market. Small businesses need funding to start a new business or to expand existing businesses. However, Ward (2011) observes that search for funding by small businesses may sometimes be time consuming and hectic. In order for a small business to secure funds in Canada, it should take into consideration 10 issues recommended by Ward.
1) Sources of Funds
One of the factors to be considered by small businesses is the main sources of funds in Canada. The article suggests that the sources of funds in Canada may include banks and credit unions. However, the most prevalent source is personal savings. Since there is a financing program in Canada for small businesses which is implemented through banks, Ward suggests that banks should be a preferable place to obtain funds for small businesses.
2) Financial Sources are Few and Far Between
The second thing suggested in this article is that an entrepreneur should understand that small business financial sources are few and far between. Therefore, entrepreneurs should be smart while they are looking for grants. They should learn how to get people to lend them money.
3) Using a Business Plan
A solid business plan is also a good consideration for small businesses in Canada to secure funds. Funding institutions need to know that the money being borrowed is used in viable businesses. A strong business plan will serve this purpose.
4) Ability to Generate Enough Income
The business should also reflect the fact that the business is able to generate enough returns for the funding institution to get something out of the loan.
5) The Entrepreneur Should Contribute Financially
Another important consideration for small businesses in Canada as suggested by this article is that the entrepreneur needs to be ready to contribute financially. This can be through offering his/her assets as collateral. A small business seeking for funds should also consider its size and age.
6) The Size of the Business
The size of the business determines the cost needs of the business while the age determines the trust the banks will have on the business. Small and new businesses are more likely to attract more funding.
7) The Type of Industry
The industry within which a business operates also determines the level of funding for small businesses. Some industries in Canada attract more funding than others.
8) Entrepreneur’s Financial History
The entrepreneur’s financial history also influences the amount of funding a small business is able to get (Ward, 2011). An entrepreneur is his own business in terms of finance. Finance institutions will scrutinize the financial base of the entrepreneur before awarding him funds.
9) Availability of Women Funding
The ninth issue that is suggested as a point of consideration in Canadian small business funding is the availability of more women funding in Canada. There are a lot of funding options for women engaged in small businesses in Canada.
10) Starting Small
Finally, Ward contends that a business doesn’t have to start with a lot of funding. She suggests that a small business can start small but end up to be a multinational corporation.
