Six Ways to Finance Buying a Business in Canada

Six Ways to Finance Buying a Business in Canada

Owning your own business is extremely satisfying and it is the chance to design the life you have always wanted to live, on your terms.  If you are considering owning your own business, it is important to determine how you will finance the business.  There are a number of ways to get financing your business depending on your current financial situation.

Let’s review the six most popular ways to finance a business:

  1. Canada Small Business Loans – Small business loans are available for small businesses operating in Canada with gross annual revenues of $10M or less.  These loans are dispersed through all major Canadian banks.  Loans can be used to grow small businesses in a variety of categories – for a full list of categories and requirements click here .  At A R Business Brokers we work with specialists who can get the process started – get in touch with us today.
  2. Business Development Bank of Canada (BDC) – the BDC provides loans to small businesses in two categories – under $100K and over $100K. BDC also provides a number of support and educational services for small businesses to aid in their development and growth.  To view the entire list of services provided click here  At A R Business Brokers we work with BDC to find the right path for you – get in touch with us to get the process started.
  3. Personal Finances – if you are fortunate enough to have the personal finances to manage your own business this is the best way to go! Having this financial freedom allows you to establish your own rules and to allocate funds without loan approvals or restrictions.  If you are going this route, ensure you have the capital to cover expenses and a revenue stream from the business that will replenish the funds you have invested.
  4. Equity Financing – if you have the assets that will give you access to equity one option is to utilize the equity to fund your purchase. Equity also gives you the freedom to manage your finances without loan terms and conditions.
  5. Vendor Take Back (VTB) / Seller Financing – Financing offered by the sellers is common place to finance businesses.  The seller will provide up  25%-50% of loan value to fill in the gaps for the buyer as the buyer arranges their finances. 
  6. Private Investors / Angel Investors – Private Investors will aid in financing a business and will set up payback schedules in a number of different ways.  You have the freedom to negotiate the terms and conditions with your investors and work out a payback schedule that can include shares in the company or loan payments or any other arrangement that both parties agree to.

To understand the financial needs of your business it is advised to have a conversation with a professional Business Broker.  Contact the experts at A R Business Brokers to determine how to get started. Contact us today at www.aldrin.ca