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Business Advice from the Experts: Navigating the Funding Landscape with BDC

By Christine Drage
Business Advice From the Experts graphic: background image is three smiling diverse business colleagues having casual sit down business strategy meeting. Text reads: Business Advice From the Experts. Navigating the Funding Landscape

This article is written in partnership with: BDC Logo

As an aspiring entrepreneur with a small business idea, securing the right financing and funding can be a game-changer, but navigating the lending landscape might feel like a daunting task. We connected with the Business Development Bank of Canada (BDC) to answer five essential questions that are top of mind for entrepreneurs.

Whether you’re just starting out or looking to take your small business to the next level, get advice from the experts to guide you to unlock financial success.

What financial advice would you give an entrepreneur looking to start a business?

When planning to start a business, a significant amount of time should be concentrated on finance as many new businesses will require loans or investments to get up and running. Since money is what will move your business forward, you should always know how healthy you are financially. This requires a realistic prediction of cash flow and future cash flow. Being able to effectively budget your expenditures and forecast the quality of future revenue is essential in order to bring financing or investment partners on board with your vision.

At what stage should a business look at funding options?

A business can start looking at funding options once they have a thorough understanding of their financial health. Having healthy long-term sales forecasts, a solid employee base, and a strong supply chain will all aid your application process.

What should businesses have prepared financially before starting a business or looking for funding?

Show you have the skills to manage your business. It’s important to highlight any business education and experience you and your management team have. You should also be ready to discuss where you will get outside advice, such as a mentor, or advisors who will help you in such areas as financial management and marketing.

Do your research. Have clear data showing your projections, assumptions and forecast are realistic.

Prove that you have investors at the ready, in case you need a quick cash injection.

Know your personal credit history and net worth. If it is not strong, work to improve it as much as possible.

What is the most common type of loan you see for small business owners?

Working Capital Loans

Did you know?

A working capital loan is used to finance everyday operations for a business, including sales and marketing, product development, wages, and more.

Source: BDC

What Financial risks would you flag to business owners and entrepreneurs?

Inadequate financial preparation and resources. It’s common for entrepreneurs to neglect financial planning and lowball how much capital they will need to get their business up and running. The result is often inadequate financing to achieve your goals and/or a cash squeeze just as the business is hitting its stride.

To avoid such problems, be sure to prepare financial projections for your new business, especially for the first 12 months. This can also help you secure financing and investments.

Let’s talk solutions for today’s business challenges

Running a business has never been simple, but ongoing worker shortages, interest rate hikes, and inflation are making it even more difficult. Can small business owners overcome these challenges? Absolutely—especially if you don’t do it alone. It takes time to build a network, but working with partners in your ecosystem will help you find the right strategies for your company.