Toronto Lawyer - Need a Loan? Have you considered alternative sources of financing?

Are you starting a business? Does your existing business need more capital? Do you have a great idea but need money to develop and build it? Businesses need money and business people need to know how to find it to be successful and profitable. Traditional financial institutions continue to be a valuable source of capital but consider these alternative sources of financing:

Angel Investors (www.angelinvestors.ca): “angels” are private investors who invest capital into promising companies. www.angelinvestors.ca is a website which allows entrepreneurs to submit investment opportunities for a $200 fee and, if acceptable, the organization will present it to angel investors.

Business Development Bank of Canada (www.bdc.ca): BDC offers several financing programs including Co-Vision, which provides term financing of up to $100,000 for new businesses demonstrating long-term viability, and BDC Venture Capital which finances technology-based businesses with high growth potential.

Canadian Youth Business Foundation (www.cybf.ca): the Foundation grants loans of up to $15,000 for eligible entrepreneurs ages 18-34. The Foundation also operates a mentoring program for young entrepreneurs.

Mirco-Credit (www.strategis.ic.gc.ca): Mirco-credit are community based programs administered through organizations such as credit unions and community development corporations which provide financing to targeted low-income earners who would otherwise be turned down for traditional loans. Loan amounts are modest and are generally accompanied by some form of technical assistance.

Self-Employment Programs (www.yes.on.ca and www.tbdc.com): If you are eligible for or collecting EI and have a viable business idea, Human Resources Development Canada funds self-employment programs for an 11 month period to help you develop the skills to succeed in business.

Small Business Financing Program (www.strategis.ic.gc.ca): This program is administered jointly by the federal government and qualified financial institutions. The program lends up to $250,000 to eligible lenders for the purchase or improvement of capital equipment or property. The federal government will guarantee 85% of the lender’s loss in the event of default.

Venture Capital: Venture capitalists provide financing and assistance to companies with high-earnings potential. Please see www.cvca.ca for a list of some members of this industry.

Industry Canada’s website (www.strategic.ic.gc.ca) contains a search engine to locate sources of funding by location, amount, industry and sources. Industry Canada also produces an online guide entitled “Steps to Growth Capital” that will take an entrepreneur through the process of securing capital. The website is a promising start to your search for capital.

This bulletin is intended to provide general information only. This bulletin does not in any way constitute the provision of legal advice and does not in any way create any lawyer-client relationship. If you require legal advice, you are urged to directly contact a qualified licensed legal professional to assist you.