Venture Capitalists
Venture capitalists are companies and individuals that have excess capital and are looking for an investment opportunity.
A venture capitalist will take a share (equity) in your company, and you in turn give up partial ownership of
the business. The
Business Development Bank of Canada (BDC) may assist small and medium-sized
businesses in this manner.
Types of Financing
Term Loans
A term loan is most often used to purchase equipment. The advantage is that the repayments of the loan are matched
to the income that the equipment generates, and the schedule is matched to the equipment's life expectancy.
Typically, the interest rate of a business loan is fixed.
Lines of Credit
A line of credit allows you to draw money as you need it, typically for day-to-day expenses. You apply for it as
you would a loan. The interest rate fluctuates because it is tied to the prime lending rate.
Credit Cards
More than 70% of small-business owners use credit cards for small purchases, as a temporary source of cash, and to
cover immediate expenses. A credit card gives instant credibility because suppliers are assured they will receive
payment.