Frequently Asked Questions
Below are some common questions small and medium sized business owners face when seeking to finance their company.
If you have any other questions or would just like to see what financing might be available for your business, please contact us.
The funding market in Canada has many different options available for small and medium sized businesses.
Lenders will typically require some form of application which will require you to disclose information about your business.
This varies based on the process the lender uses, the amount being sought and type of funding.
Some lenders for small loans will be able to approve and turn around financing in a matter of days. Larger, more complex financing arrangements can take weeks or even months.
The best way to finance your business takes several factors into consideration. Such as:
- Are you currently borrowing from a lender?
- How quickly is your business growing?
- Are you in need of long term financing to run your business or bridge financing to get to a liquidity event?
- How much debt and interest cost can your company carry based on projections?
Many finance groups are national lenders, like banks and larger financial firms with a portfolio of clients across Canada.
However, from time to time, it could be advantageous to work with a local source of growth capital or other financing requirements… if we do not have a readily available source of funding in your area, we will work to make new connections through out cross-Canada network of partners.
Businesses that are growing quickly and have to carry substantial accounts receivable can run into significant cash flow problems. This means the potential for missed payables and unhappy vendors or suppliers.
Accounts receivable financing options, like factoring, can provide much needed working capital quickly. Since they focus most of the credit decision on the strength of your customers, it can be easier to qualify for funding.
While most banks will take senior security position when they provide a loan or revolving line of credit, they may allow for secondary financing that is subordinated to their position.
Alternatively, it may make sense to look for replacement financing if the business is in need of additional growth capital and the existing business loan provider is not willing to increase their advances to the company.
Large banks often provide loans at lower interest rates than private lenders. However, it is often more difficult to qualify for bank loans that fit the needs of a business… especially if the company is experiencing high growth or is recovering from a period with low profitability or growth.
Also, larger banks and lending companies tend to have longer credit assessment processes that can take weeks or sometimes months to get the necessary approvals to offer business lending options. This can be OK for companies without a short-term funding requirement.
But, businesses in need of an express loan process will likely be better suited to work with private lenders that can quickly make credit decisions.
While we typically focus on financing opportunities over $500,000, we have established relationships with several entrepreneurial new and small business funding resource across Canada.
Please refer to our Solutions page for more information.
Do you have other questions you would like answered?
Please click on the button below to go to our contact page. There we encourage you to ask questions or request more information about how Funding Canada can help you find the right financing for your business!