Aboriginal Entrepreneurship Program: Access to Capital

The Aboriginal Entrepreneurship Program (AEP) provides access to capital and business opportunities to Indigenous entrepreneurs and business owners in Canada. The AEP stream provides annual, ongoing funding to Indigenous entrepreneurs through the network of Indigenous Financial Institutions (IFIs) and Métis Capital Corporations (MCCs).

Aboriginal Financial Institutions (AFIs)

AFI’s are specialized lenders that provide financial services to Indigenous entrepreneurs. In British Columbia, AFI’s include:

• All Nations Trust Company (ANTCO): Offers various financial services and programs to support Indigenous business development, including micro-loan programs and resources for Indigenous women entrepreneurs.
• Nuu-chah-nulth Economic Development Corporation (NEDC): NEDC provides accessible loans, flexible financing and business advisory support to First Nations. NEDC serves a diverse list of clients across several industries from first time business owners to Nation-owned enterprises.
• Tale’awtxw Aboriginal Capital Corporation (TACC): TACC delivers financing and funding programs to Aboriginal entrepreneurs in the Coast Salish territory. 
• Tribal Resources Investment Corporation (TRICORP): TRICORP’s provides financing for business activities which increase the number of permanent jobs, reduces unemployment and facilitates business ownership among First Nations people.

These institutions are part of the National Aboriginal Capital Corporations Association (NACCA) network, which has provided over $3.2 billion to support economic development across Canada. 

First Citizens Fund Business Loan Program

Th First Citizens Fund program provides business loans to Indigenous entrepreneurs in British Columbia. Delivered by All Nations Trust Company (ANTCO) in partnership with four Aboriginal Capital Corporations, it supports the creation and expansion of Indigenous-owned businesses. 

Haida Gwaii Community Futures Loan Program

Haida Gwaii Community Futures offers a range of business loans from $500 to over $2 million to support new startups, expansions, social enterprises, and community-owned businesses on Haida Gwaii. They provide tailored financing solutions for all islanders, including youth, First Nations, and entrepreneurs with disabilities.

New Relationship Trust – Equity Matching Initiatives

The Entrepreneur Equity Matching Initiative (EEMI) supports new or expanding First Nation businesses and communities in BC by providing matching equity through BC Aboriginal Financial Institutions. 

Questions?

If you have further questions about your small business financing options, call us at 1.800.643.7014 ext. 112 or send us a note and our Client Services Coordinator will be in touch.

Disclaimer: The funding sources listed on this page are provided for informational purposes only. WeBC does not administer these programs and cannot guarantee eligibility, funding availability, or program intake dates. Each program has its own criteria, deadlines, and application process. Please refer to the official websites for the most up-to-date information and to confirm your eligibility. Additional funding opportunities may also be available beyond what is listed here.

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You’ve probably heard about grants for start-ups, but the truth is they are very rare. Not only is the pool of funding small, but the application process and reporting requirements can take a lot of your time – time that could be better spent building your business.

If you’re looking into grants, here’s an important tip: you should never pay for grant information. Before spending any money, double-check with the Better Business Bureau to make sure the service is legitimate.

At WeBC, we don’t offer grants, but we do provide small business loans to help you grow. We lend based on the viability of your plan and the strength of your vision, so you may qualify with us even if you haven’t with other lenders.

IMPORTANT NOTE – WeBC is NOT connected to the Small Business Finance Centre or The Centre.

Grants and Funding Sources for BC Businesses

There are funding sources and grants for specific purposes, for which you may be eligible. The websites below contain more information on some available sources.

To help navigate through various programs, we recommend visiting the Business Benefits Finder (Government of Canada) and Work BC Loans and Grants (Province of BC), in addition to the list below.

Click on each topic to view the list of programs.

Questions?

If you have further questions about your small business financing options, call us at 1.800.643.7014 ext. 112 or send us a note and our Client Services Coordinator will be in touch.

Disclaimer: The funding sources and grants listed on this page are provided for informational purposes only. WeBC does not administer these programs and cannot guarantee eligibility, funding availability, or program intake dates. Each program has its own criteria, deadlines, and application process. Please refer to the official websites for the most up-to-date information and to confirm your eligibility. Additional funding opportunities may also be available beyond what is listed here.

The post Grants and Funding Programs for BC Businesses appeared first on WeBC.

“Oh, I’m not good with numbers.”
“I’m not sure… My bookkeeper takes care of all the money stuff.”
“We just got last year’s financials from the accountant (now 11 months old), let me see if I can find them…”

Answer: A lot! It’s the equivalent of the client putting their fingers in their ears and yelling, “LA LA LA LA LA!”

And yes, I get it. Not everyone went to business school, and it can be intimidating to try to learn more about your finances. You’ve got more important things to do, right? Like increasing sales, dealing with suppliers, and handling a staffing shortage—you know, running your business? 

But here’s the thing—If you don’t know the numbers behind your business, you’re not really running a business, it’s running you.

It’s nearly impossible to grow your business without knowing the financial nuts and bolts as you scale up because you don’t know what you’re working with. It’s like trying to make something for dinner without knowing what’s in the cupboards. 

In today’s business skills post I am going to cover some key reasons you should make an effort to understand your financials, how often you should review them, and how you can put a plan into action. 

For more on the actual nitty-gritty details on how to improve your financial knowledge, check out our guide: Financial Management for Small Business.

Why should you make an effort to understand your business finances?

Data entry vs. financial management

Some entrepreneurs are pretty hands-off when it comes to financial management. They rely on their bookkeeper to enter the expenses and revenues into accounting software and rely on their accountant to prepare the financial reporting and taxes and review it with them once a year. 

These activities are important pillars of your business, but if you limit your financial management to this level of data entry and annual reporting, it can leave a giant gap. What really makes your data meaningful is when someone actually looks at the numbers on a real-time basis, analyzes them, and uses that information to inform decision-making and business strategy. 

This is the difference between data entry and financial management. The good news is, you don’t need to be a numbers whiz to understand your numbers. You just need to be curious and have the right people to help.

Why you need to make time for financial management

Okay, so you know you should be spending more time watching your finances. Here are some (hopefully) compelling reasons to invest the time.

It will give you information for decision-making:

Financial management can help you:

• Track your margins: Over time, your expenses can start to creep up (especially in today’s inflationary environment). By watching your finances, you will have a better idea of how much profit you are making from each unit you sell, which will help you decide whether you need to increase your prices.
• Monitor trends: Sometimes it can be easy to go into autopilot with some things, like paying invoices and signing off on payroll. If you look at your financials regularly and compare them to past performance, you can monitor trends and identify when a change is needed. Perhaps your ingredient costs are way up? Or has your phone bill increased? Catching this earlier will give you more time to react and adjust. Likewise, maybe you notice from your reporting that certain times of the year are busier than others—how can you capitalize on that trend for next year?
• Understand your ability to make new investments: Perhaps you are dreaming of opening a new location or hiring another staff member. Before you take the leap, your financials will be a great source of information to tell you if now is the right time.  

It will help you understand your cash needs:

Arguably, the number one financial issue faced by most entrepreneurs is balancing cash flow. You may have had a record month in sales, but if you also just placed a big inventory order and paid your taxes (oh, and don’t forget you had to fix a leak in the ceiling), you may find yourself out of cash. 

This is one of the main reasons entrepreneurs should make time for financial management. By reviewing your actual and forecasted cash inflows and outflows on a regular basis, you can plan for future cash crunches and make arrangements to bridge the gap in advance (like calling your lender for a business loan or line of credit).

It will help you stay friends with your lender

Having your financial information at your fingertips will help you maintain good relationships with the partners you want good relationships with. For example, if you want to apply for a loan, your lender is going to expect up-to-date financial statements. 

If those aren’t available, you might have a hard time accessing financing. Likewise, once you do get a loan, your lender will expect regular reporting—and it’s always a good idea to stay in your lender’s good books.

It will help you manage payables and receivables

Staying on top of your finances will also help you keep strong relationships with other partners, such as your suppliers. By reviewing your finances regularly, you can monitor payments to your vendors that have gone unpaid and strategize on how to settle the account. You can also keep on top of who owes you money and can follow up to inquire as to when you can expect payment.

How often should you review your finances?

Most entrepreneurs already do an annual review—but aside from that, how often you review your finances will depend on the nature of your business and the timing of your revenues and expenses. Every entrepreneur should be sitting down to review the books at a high level at least every month, with a deeper dive on a quarterly basis, and a very deep dive on an annual basis. 

Here are some other considerations:

• Weekly review: If you are a volume-based business like a restaurant or retail store—you absolutely should be looking at your sales on a weekly basis. If you’re working with cash and credit cards, you will already be doing settlements at the end of each day—so find a way to track that information. Your point-of-sale system may already provide reports for you, so use them! Also, be sure that you understand what’s included in your reporting. Does it include shipping and GST? That’s not revenue, so take that into account.
• Monthly review: On a monthly basis, all businesses should take the time to make sure all revenues and expenses are up to date and prepare a report that tracks your most important metrics. Many of your fixed expenses will be paid on a monthly basis, so this level of reporting will give you a full view of that month’s performance. This review doesn’t have to take a lot of time, and the more you do it, the faster you will get at doing the monthly review.
• Quarterly review: The next level of review is quarterly. This is the time for you to meet with your accountant (if you have one) to discuss higher-level trends and results and decide whether the results necessitate a change in strategy. Go back to your goals for the year—are you on track based on how things are going so far? If not, what are the highest potential opportunities to get back on track?

How can you get started to improve your financial management today?

Compile your data

Good financial management starts with good financial data entry. Maybe you are great at entering your revenues and expenses into an excel sheet already, or maybe you keep all of your receipts in a file somewhere for entry by your bookkeeper. That is a great start! However, for you to get the most out of that data, you also need a way to compile and look at the data in a way that is timely and meaningful. 

Use accounting software

This is why it’s so critical to consider using accounting software—AND (crucially) to learn how to pull reports from it.  If you are using excel, you are probably missing out on the powerful ability of software to slice and dice and compile your data. It can handle all the arduous tasks that you might be doing by hand. And how much money are you saving by not having a $20 subscription? How much is your time worth?

If you are working with a bookkeeper, chances are they already have you set up on accounting software. That’s great! That means that you can start using the software too. Ask your bookkeeper to walk you through the process and pick a few key reports to look at. Make a calendar date with yourself to pull these reports, and then look at them. This investment in time will be well worth it.

Choose your financial advisors wisely

Lastly, the most important resource you will have on this journey are your financial advisors, so choose them wisely. Before you choose a bookkeeper or accountant, make sure they have an understanding of your particular industry—this can make a big difference. 

Make sure you feel comfortable with them—you should feel okay asking a ‘silly’ question, and they should be able to communicate with you without using too much finance jargon. You also want to make sure that they will be available to you when you need them. Some financial professionals focus on working with small and medium-sized businesses, which can be a better fit than going with a large firm that may not be able to provide the support you need.

The most important thing is to get started! I hope this information helps give you the confidence to take a more hands-on approach to your finances. Just remember to stay curious!

The post Financial Management: Learn the language and get in tune with your business appeared first on WeBC.

Before developing a policy, examine your business goals. You may want to limit the number of customers to whom credit should be extended based on the frequency or volume of their orders and payment history. If your business has serious cash flow problems, you may not want to extend credit at all. As well, you will want to ensure your collection processes generate the results you hope to achieve.

Consider the following before setting your Credit Policy:

• Why do I want to extend credit?
• What do I want to achieve by extending credit?
• What costs are associated with the policy in terms of cash tied up?
• Is my business such that I even need to extend credit?

Credit policies should be directed toward some business goals. You cannot set rational credit objectives unless you know where your business is headed.

Remember, credit is the same as having your business extend an unsecured loan to its customers. Ask yourself if you can afford to extend such credit. Avoid borrowing from the bank and paying interest to support cash flow shortages caused by slow-paying customers, as this is bound to cause you further serious cash problems.

Before you extend credit to your customers, you need to know how much your business can realistically afford. The answer to this will depend on your cash flow. If you have enough cash flow to support your business or a surplus, you may want to relax your credit policy, which will translate into higher Receivables. On the other hand, if you are constantly in a cash crunch, a strict policy should be considered.

Think of a Credit Policy as your way of making your customers pay you when you want them to. Again, how you set it up should depend on your cash flow as well as what’s normal for your industry and your own business objectives.

Factors to consider:

• Research what is normal for your industry. This can be your yardstick.
• The better you know your customers, the more likely you are to offer them credit.
• The bigger your customers, the greater the potential for them to dictate a credit policy that ties up large chunks of your cash, or significantly hurts your business if the customer fails to pay.
• How is your cash position? The stronger it is, the better your ability to support a credit policy.

This blog is an excerpt from WeBC’s Financial Workbook for Small Business, available for download at go.we-bc.ca/LearningGuides

Other Resources to Further Your Financial Knowledge

“Financial Fitness” is one of our most popular training series, and now it’s available On-Demand! Part of our SMART Program series, these courses are designed to help you understand key concepts, work through interactive case studies and complete activities that apply the learning to your own business. “Financial Fitness” also includes a whole chapter on Credit and Collections! Learn more >>> 

The post Should you offer credit? appeared first on WeBC.

DOUBL offers bras customized to individual body measurements, using smartphone scanning technology. Their bras stand out by offering a custom fit that can be ordered from home, eliminating the need for in-store fittings.

As the business grew, Jessica and Bryn recognized they needed more financing to grow the business. They were ready to launch production of their product but needed additional capital to purchase the pattern-making software, train their patternmaker and increase their working capital. Even though Bryn has worked in brand management at the Fortune 500 company Unilever, and Jess has worked in buying and merchandising at major fashion brands like MEC and Herschel, as a start-up they struggled to get a loan from a traditional lender. They reached out to WeBC to complete their funding puzzle and worked with our Business Advisor, Kelly, to access the WEOC National Loan Fund. 

That same month, they also began participating in WeBC’s  Investor Speak™ program, which teaches women to better communicate the value of their business to investors so they can secure Venture Capital.

Through the Investor Speak™ program, Jess and Bryn learned to integrate new language into their daily speech patterns through ongoing practice sessions on WeBC’s Investor Q&A platform. They mastered the art of reframing negative questions into positive ones, which enhanced their grant applications, pitches, and overall communication strategy.

Since participating in the program, Jessica and Bryn have secured significant grants and prize money at pitch events, including the Desjardins GoodSpark Grant worth $20,000 and winning the Futurpreneur Growth Accelerator Pitch Competition worth $10,000. It also helped them attract customers and boost revenue, with a notable achievement of generating $60,000 in revenue within a month.

Around the same time, Jessica and Bryn launched a Kickstarter campaign to raise additional funds and build awareness of the brand and product. They raised over $32k of their intended $10k on the platform representing over 250 bras sold. The DOUBL co-founders have leveraged many programs from the small business support network, including the League of Innovators and Coralus, and Jessica is a member of the Startup Women Advocacy Network from Startup Canada, which is a collective of women entrepreneurs who champion and advocate for women business owners across the country.

Client Q&A

Q: What gave you the idea to start DOUBL?

Jessica: In our second year of Business School, we took a new venture creation course focused on launching new businesses. We both had an entrepreneurial spirit and in that class, we had to develop a business idea. This was back in 2015. Uber had recently gained popularity for revolutionizing the taxi industry through the use of innovative technology, completely redefining the way we hire cars. It got us thinking about other industries that had seen minimal change over the last century, and apparel, particularly bras, stood out.

After graduation, Bryn and I stayed close friends and would visit each other often. During our evenings and weekends together, we continued discussing our ideas and kept a close watch on advancing technology. By 2020, technology had progressed enough that we felt ready to give it a shot. Coincidentally, the pandemic had given us some extra time on our hands, so we decided to incorporate our business and get started.

Q: What makes DOUBL unique?

Jessica: Our bras are the first designed precisely to fit your body measurements—your bust, back, and shoulders—all from a smartphone scan. This means you can get a bra tailored exactly to you without leaving your home.

Q: What inspired you to take WeBC’s Investor Speak™ program?

Jessica: We’ve been “investor dating,” so to speak, for quite a few years because our research and development stage took us a long time. During that period, we focused on preparing for investment, joining accelerator programs, and expanding our network, so that’s why we joined the program.

One of the most interesting aspects of the program was learning that women often face more negative-leaning questions from investors compared to men. We therefore learned how to respond in aspirational ways and redirect the conversation to focus on the value we were delivering as a business. 

We learned how to shift that language to turn these negative leading questions into aspirational responses. And, honestly, it was just such an unlock for us. I feel like it completely shifted the way we applied for grants.

Since then, although there have been multiple factors contributing to our success, we’ve secured some substantial grants and won prize money from pitch events. The program was incredibly beneficial to our journey.

Q: Were there any key takeaways from the program?

Bryn: One of the best parts of the program—and probably something we should do more often—is the practice aspect. It’s one thing to learn new words to incorporate, but it’s another to truly integrate them into your everyday speech and have them become natural to you. Many of the issues we face are systemic, which means changing how we think on a deeper level.

There’s a practice component built into the program that I found valuable. It’s very smart and adapts based on your responses, even continuing for up to a year after the program ends. I’ve blocked out time on my calendar to keep practicing.

Q: You have such a unique product. How are you encouraging people to adopt it?

Bryn: Since we have such a unique business, we are also taking a unique approach to our go to market. We’re hosting bra parties, similar to Tupperware parties, so women can connect with their community and share about DOUBL.

We don’t have inventory, so we’re not asking people to buy inventory and sell it.
It’s really more if you love the brand, you can host your friends and we give everybody discount codes and swatch booklets so they can touch and feel all the materials before ordering.

Jess: We’ve been hosting a lot of community events to engage more authentically with our customers. We’re fully ecom, so customers don’t get that same opportunity to shop in-store. We’ve been hosting pop-ups and partnering with lots of other female founders on sip and shops, which has been really fun.

Our goal is to create a forum to have these conversations about boobs and bras.
Every time we have an event, somebody comes up to us and says ‘This might be too much information, but…’ 

We realize it’s such a personal thing for women. Everybody has a story and it’s just a matter of providing them the outlet to have those conversations and show them that they’re not alone. We want to create a community of feeling heard and seen and safe.

Q: What advice would you offer aspiring entrepreneurs looking to launch their own business?

Bryn: I think it’s crucial to start as early as possible. It’s an iterative process, so the sooner you can begin getting feedback from potential customers, the better. This feedback is important because you don’t want to work on an idea in isolation and launch it fully developed without understanding what the market is saying. 

There are statistics indicating that the primary reason businesses fail is because people give up. 

The best advice I’ve ever received is to hold tightly to the problem you’re solving while remaining flexible with the solution.

I think Jess and I have done a good job at addressing a pain point for the majority of women and we want to solve that problem, but we’re taking in the feedback around the bra and how to make it better.

Another thing we’ve learned in the journey is the importance of focusing your efforts and remembering you can only do so much, even with two people.

Where to find DOUBL

Website

Instagram

Facebook

TikTok

The post Jessica Bosman and Bryn Davis Williams, DOUBL Kelowna appeared first on WeBC.

I saw a problem in the market around pill and supplement organization. It was just being targeted towards elderly people or polypharmacy end of life and completely ignoring the younger demographic of people who require support with their health and wellness and their supplement management.

Dealing with her own health challenges, such as fertility issues and hormonal imbalances, Kate recognized the need for a better solution for managing pills and supplements. Kate’s personal journey merged with her professional expertise in branding and healthcare to found Loba Wellness.

Some of these stats are actually mind-boggling: 50% of people under the age of 35 suffer with a chronic illness; one in six struggle with fertility; one in eight with mental health. A lot of that has to do with Women’s Health and the majority of Loba’s users to date have been women. With Loba, we really wanted to create a positive sentiment around taking your pills and supplements, especially for people who are struggling in these areas where there can be stigma.

Kate’s vision was to empower individuals to manage their health proactively through a streamlined pill and supplement organization system. Loba pairs with their app, allowing users to manage their schedule, set reminders, add pills, log information, track habits, and more.

People are turning towards more integrated care and naturopathy. They’re really being the steward of their own health, so our audience is investing proactively in their own healthcare and a lot of them are of a younger demographic.

After developing a relationship with WeBC through their business loan program, Kate was encouraged to join the Investor Speak™ program, where she found invaluable resources for pitching and handling investor questions.

WeBC’s Investor Speak™ program helped her improve her communication skills and secure more follow-up meetings with investors. This strategic support proved instrumental as Loba Wellness expanded its reach and impact.

Today, Kate continues to drive Loba Wellness forward, aiming to forge partnerships with B2B enterprises and supplement companies to enhance health management and promote holistic wellness practices.

Client Q&A

Q: What inspired you to start Loba?

I’ve always been interested in more integrative approaches to health and bringing Western and Eastern medicine together to try to achieve the best possible health outcomes for myself and the people around me. Acupuncture, massage therapy, energy work, and of course, supplementation are all very interesting to me.

On a personal level, I was dealing with women’s health issues, including polycystic ovarian syndrome and uterine fibroids. I worked with my doctors and began looking into naturopathy and these other modes of health and alternatives to try and sort out my health.

All of this was the catalyst of my own need for a management solution where I could organize my pills for the week ahead, and not have to take an entire week’s worth of pills with me to dinner to be able to stay consistent.

I wanted something that looked beautiful in my space because I didn’t want something on my counter that made me feel like something was wrong with me. This was crucial for someone like me, deeply invested in health, wellness, and aesthetics. I decided to incorporate my personal needs with my experience in health and technology.

We found a way to incorporate technology and what we know about the psychology of building healthy habits into the solution that ultimately became Loba.

Q: What is the biggest lesson you’ve learned being an entrepreneur?

I’ve always understood the importance of resilience in entrepreneurship, but starting a successful service-based business was a different challenge altogether. Transitioning to a tech startup with both hardware and software components added another layer of complexity.

The ecosystem is much more challenging and demands even greater resilience and grit, especially as a woman entrepreneur.

You hear about funding opportunities and venture capital for women entrepreneurs, but you don’t really understand how big that gap is until you’re living in it.

Learning to prioritize resilience and grit, and building strong support networks and sustainable practices, have been my biggest learning.

Q: What inspired you to take the Investor Speak program?

As a client of WeBC through their loan program, I developed a relationship with their team. It was during my second meeting with Melanie Rupp that I first learned about the Investor Speak™ program. After she contacted me, I decided to apply for the second cohort.

Building relationships with the team at WeBC made me feel understood, especially regarding the challenges women entrepreneurs face. When they recommended the program to me, I felt confident they had my best interest at heart. I knew participating would be worthwhile.

Q: Were there any key takeaways from the program?

The platform and technology were so helpful for my learning. Being able to go on and practice not just our pitch, but how to handle questions and objections from investors was the most valuable thing for me as a part of that program.

We were able to actually practice live, then read back transcripts and have our responses scored based on whether we used aspirational words, objection words, positive language, or negative language. It was really helpful in both affirming how I’ve handled Q&A in the past, but also flagging things and helping me to train them out of my language.

I was in the program at a time when I was pitching very actively—three to five pitch meetings a day. The learnings from that program directly contributed to my success in securing second and third meetings with investors, and move beyond the initial intro calls.

The biggest learning for me was understanding the psychology of language when it comes to what investors are looking for. It’s much more specific than one might think in the use of certain words and certain terms which typically result in more investment. Having access to that data to inform my responses and how I pitch was a big takeaway.

Q: What advice would you offer aspiring entrepreneurs looking to launch their own business?

My advice for someone starting their own business would be to be very clear about their purpose and have passion for what they’re doing. At the end of the day, the problem that you’re trying to solve is going to get you through the hard times. Always realign with your purpose and look at the bigger picture of the impact that you can have as a business.

Where to find Loba Wellness

Website

Instagram

TikTok

Facebook

The post Kate Bouchard, Loba Wellness, Vancouver appeared first on WeBC.

EQUITY

Equity can be a confusing word because it means different things to different people. 

Lenders want to see that business owners are contributing and investing in their own company, therefore, every lender looks for the business owner to be investing some of their own money into the business. At WeBC we call this your equity contribution, but other lenders might call it an owner investment, or capital contribution, among other terms.

Equity could be cash that you’re investing in your business now, or it could be cash that you’ve invested in the business some time ago, for example, when you purchased business equipment or supplies. It could also be cash that someone has gifted to you. If you are an existing business, equity can also include profits that you’ve made in past years that you retained in the company (Retained Earnings).

Having equity is important to business viability. Starting a business that is 100% debt financed is VERY RISKY and makes it very difficult to secure a business loan.

At WeBC, the guideline for our business loans is that your equity contribution must equal 25% of total debt of the business. 

For example, let’s say you want to start a shoe store and it’s going to take $100,000 to get started.  We would look for you to contribute $25,000 (25%) of your own money and borrow the remaining $75,000 (75%).

Equity calculations can get quite complicated, especially if you are an existing business. If that’s your situation, we will ask to look at your balance sheet (if you have one), as this is where your equity will be recorded.

There are some limited situations where we may consider less than 25% equity. If you meet all of our other requirements but are a little low on the equity requirement, you should give our client services a call and ask to speak with a Business Advisor so we can talk about your specific situation.

SECURITY (aka Collateral)

People often confuse Equity and Security, but they are different things. As we just learned, Equity is how much money you have (or will) contribute to the business, and Security refers to assets that are pledged to the loan just in case something goes wrong and you aren’t able to repay the debt.

In general, lenders look for some security or collateral to support the loan.  In the context of financing, security and collateral mean about the same thing. For example, if you have a vehicle loan, the lender uses the vehicle as collateral and if you don’t pay the loan, the lender can collect that vehicle and resell it.  That is, of course, in a worst-case scenario.

So, collateral is things or assets that you pledge to the lender.  If something unfortunate or bad happens in the business, and you can’t repay the loan then the lender can go and get those assets and resell them and apply the proceeds to the loan balance. Business assets such as equipment, or personal assets such as vehicles, boats, houses and cash, would all count as collateral.

Some lenders look for 100% collateral or security. As a developmental lender, WeBC offers both secured and unsecured loans, although we always encourage you to pledge security if you have it available, as it can get you a lower interest rate and improve your changes of getting approved.

For our secured loan program (for any loans over $50,000), we require the borrower to pledge assets worth at least 30% of the loan value. 

For our unsecured lending program, also known as the Equal Access to Capital Lending Program, we can provide loans up to $50,000 without any security or collateral. To qualify for this program we look at the following:

• You must have a strong business plan
• You must have a credit score of 650 or higher
• You must be applying for $50,000 or less.

We take a holistic approach to lending and provide ongoing support throughout the duration of the loan. If you’d like to learn more about equity and security, as well as our business loans for women, connect with us in one of our free Business Loan Info Sessions.

The post Explained: Equity and Security appeared first on WeBC.

Aki’s concept for Save da Sea emerged while she was managing her family’s Japanese restaurants. In 2018, she shifted to a vegan lifestyle and began looking for plant-based seafood, both for her own consumption and for her customers, but she couldn’t find a quality product. 

Determined to fill the market gap for seafood alternatives, Aki crafted her own recipes and introduced plant-based seafood products to her family’s restaurant menu. The new options were met with overwhelming positive feedback and soon became a favourite on the menu! Aki took the plunge and decided to launch her own business, Save da Sea, and devote her time to the venture on a full-time basis in 2019.

Based in Victoria, Save da Sea specializes in the production of plant-based seafood crafted from whole foods. The products have the same nutrients and flavour as seafood without the toxins and harm to the planet. Save da Sea’s mission is to contribute to the preservation of our oceans by offering delightful and convenient alternatives, and empowering consumers to make sustainable dietary choices.

Currently, their product lineup includes two smoked salmon alternatives derived from carrots, and a plant-based tuna salad featuring jackfruit. In a short time, Save da Sea has made waves in the market and products are currently available in over 500 stores including Whole Foods, Choices, Healthy Planet, Longo’s and Sobeys. In 2024, Save da Sea was featured in the Whole Foods Top Trends report in the Fancy Faux Fish category. 

In late 2022, Aki was using a co-manufacturer in Vancouver to produce her product, when she was approached with an opportunity to take over a food manufacturing facility in Victoria. She turned to WeBC for a business loan and completed her funding puzzle with Coralus. By moving production in-house to their own facility in Victoria, Save da Sea was able to increase their production capacity, improve their margins while creating five high-skilled jobs in food manufacturing on Vancouver Island.

Aki worked with a WeBC Business Advisor to review her cash flow forecast, participated in the Trade Accelerator Program and also accessed the WEOC National Loan Program via WeBC to replenish her working capital. Aki has an extensive group of advisors and investment partners, is leveraging all opportunities in the ecosystem and is on track to expand Save da Sea into the US market this year. 

LOAN CLIENT Q&A

Q: What’s the biggest lesson you’ve learned on your entrepreneurial journey?

A: Growing Save da Sea is the hardest thing I have ever done. People tell you how hard it is to run your own business, but it’s hard to truly understand it until you experience it for yourself. I’m fighting fires every other day, from supply chain issues to increasing costs, equipment breaking down, and retailers delisting your products. But the rewards far exceed the challenges. 

I have an incredible team that is passionate about what we do and that alone gets me excited to do what I do every single day. We have a growing customer base that tells us how much they love our products and how happy they are to be able to enjoy seafood again after not being able to eat it for years. 

Most importantly, we are working on one of the most pressing issues of our time, our oceans face significant peril, with a predicted total collapse of global fisheries by 2048 due to human-led destruction and climate change. By inspiring more people to shift to a plant-based diet, we can help relieve pressure on our oceans.

Q: How has your community played a role in your business’ success? 

A: I am very lucky to have an incredible group of advisors, investors and peers around me that have allowed us to get to where we are today. Having a clear purpose has helped us find folks who are just as passionate as us about alleviating pressure on our oceans.

Q: What has your WeBC loan enabled you to do in your business?

A: WeBC gave us a loan to fund the build of our state-of-the-art facility in Victoria. Getting loans from traditional lenders such as banks for a business of our size is virtually impossible. The funds from WeBC allowed us to invest in equipment to help increase our production capacity thereby reducing our labour cost. This will allow us to achieve profitability by the end of 2024.

Q: What other kinds of support have been helpful as you grow your business?

A: Recently, WeBC gave us the opportunity to participate in a program called Investoready which helps educate start-up founders on accessing venture capital. 

The program is now complete and we will have the opportunity to pitch our businesses to potential investors which will allow us access to additional capital to help fund our expansion to the US.

Q: What advice do you have for other women entrepreneurs?

A: There are many paths to success, so don’t be discouraged if someone tells you that the path you have chosen is wrong or different. My strategy has been to collect as much advice as possible and then make a decision I feel is best based on the information I have. 

At the end of the day, no one is going to understand nor care about your business as much as you do, so you know best what is the right path for you.

WHERE TO FIND SAVE DA SEA

Website – www.SaveDaSea.com

Facebook – Save da Sea

Instagram – @SaveDaSea

LinkedIn – Save da Sea Foods Inc.

The post Aki Kaltenbach, Save da Sea, Victoria appeared first on WeBC.

As a Business Advisor who has reviewed hundreds of business plans, I’m going to share some of the most important information you should always include and what information you should always leave out of your business plan. 

A note before we get started—WeBC largely works with people who are writing a business plan as part of the process to apply for a business loan. As such, I’m going to cover how to write a business plan that will be read by a potential lender. But even if you’re not planning to apply for a loan, the core elements will remain the same. 

Please see our guide, How to write a business plan for a full list of what we look for in a business plan. 

What should you always include in your business plan?

Background about you and your journey

This may seem obvious, but your reader will want to know the most basic facts of your business, and the journey that has taken you to where you are today. Some people forget this part! This should include:

• How your business started (if you’re an existing business), and how your core offerings and business model have changed over the years
• Your company’s mission, vision, and goals. In other words, where is your business headed?
• Ownership structure and how long the owners have been involved in the business.
• Background information about you and other core employees or advisors. This should show the reader that your team has all the skills and knowledge for the business to succeed. 

Market research 

Most people know they should include market research in their business plan, but a common mistake is to keep the research too high level. For example, it’s good to know how many women there are between the ages of 30-40 in Canada, but how does that translate into sales for your store in particular? Here are some tips to beef up your research:

• It’s all about targeting. Your reader will want to know who your target market is, why they’re your target market, and how you are going to reach them. Check out our guide, which includes the 6 keys to common sense marketing for more on this, or learn more about how to target your marketing in this blog post.
• Whenever possible, try to include some primary market research. This means that you have to go out and gather your own data to show your reader that there will be enough demand for your product. 
• Show that you understand your competition. What do they do better than you? What do you do better than them? It can sometimes be helpful to use a table or competitive matrix to organize this information.
• Be specific about your marketing plan. If your business plan says that you will promote your business using online advertising and you don’t provide additional details, that’s not going to be enough information. You should provide a sensible level of detail that shows the reader that you understand the ins and outs of your marketing channels, how much it will cost, and the sales you expect your efforts will achieve. 

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A breakdown of your financial plan and business model

Even if you’re not writing a business plan to apply for a loan, your business plan should include a breakdown of all the investments you plan to make in the next 1-5 years, as well as a breakdown of how you will make money. 

• If you’re just starting up, or have a big project in mind, your business plan should include details of exactly what you plan to purchase and how much it will cost.
• Once you have an idea of the cost of your plan, you’ll need to identify your sources of funds—where will that money come from: Personal contributions? Debt? Equity investors?
• Lastly, your reader will want to see a breakdown of how you make money. You should be able to provide a summary of things like your pricing strategy, what your target margins are, and how you handle things like discounts or markdowns. 

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What should you always leave out of your business plan?

At WeBC we’ve seen our share of business plans and have some thoughts on what makes a good one. Here are some highlights of what not to include in your plan.

Too much high level market research

I just finished saying that you should include market research in your business plan. Now I’m going to turn that on its head and say that you shouldn’t include too much market research! In particular, you do not need to include pages and pages of high level research about your industry. You do not need to spend money on expensive market research reports or pay someone to prepare analysis for you. For the most part, the market research we want to see is going to be specific to your business only—so you’re the best person to do the work.

Flimsy language

Sometimes when people are writing their business plan there is a tendency to want to tell the reader how great the business is. For example, they may write, “it’s an incredible business opportunity,” or “our products will be the highest quality in town.” Those are wonderful statements, but your reader probably won’t be convinced by words alone. There’s a saying I like, which is “show, don’t tell.” In other words, you will need to show  the reader why it’s an incredible business opportunity, not just tell them. 

For example, you could write “Last year, the only pizza restaurant in town closed down after a major fire. There is now an opportunity to purchase a former fish and chips restaurant and convert it into a pizza restaurant.” This gives the reader more background and shows why it’s a good opportunity.

Unrealistic projections

This is a common one—a business owner starts putting together their revenue and expense projections and next thing you know they are earning enough in their first year to retire in the Bahamas. 

Don’t get me wrong, I want you and your business to be successful and earn as much as you can, but if your projections aren’t realistic, you’re not setting yourself up for success. 

I usually suggest that people create two cash flow scenarios — an optimistic scenario and a pessimistic scenario. Ask yourself what it would look like if your business just covered its costs. What would you need to change in your business model to keep the business sustainable in that scenario?

Weak analysis of risk 

All business plans should include a section that considers the key risks the business could face and how those risks would impact the business. However, sometimes people will provide a laundry list of risks without a real plan for how to manage them. 

A common risk is that you won’t have as many customers as you anticipated. So if that happened to you, what would you do about it?

Too much visual filler 

Everyone loves a nicely designed business plan. If design is your thing, then by all means, make that business plan as awesome looking as you can. But if your pages are more visuals than words (unless they are charts and graphs to present data) then the plan itself may be light on content. Remember, good design won’t be enough to distract from a flimsy plan.

Too many words

Like any other written document, a business plan needs to strike a balance between providing too much information and not providing enough. If your plan is 40 pages long and the pages are walls of text, you may find that your readers have a hard time making it through. They may start to skim or scan your plan instead of actually reading it. 

There’s no magic fix to this, but a good approach is to ask a trusted friend or colleague for their honest opinion. Is it too long? Is it hard to read? If it is, there are many resources online that can help you learn how to thoughtfully edit your work to make it more concise. It’s worth the time and effort. 

There it is! My top tips on what to always include and what to never include in your business plan. Hope you find these tips helpful. 

Looking for more support to create your Business Plan?

Join us starting September 14, 2023, for a three-part webinar series, “Building your Business Plan: Formalize Your Ideas.” Our Business Advisor, Archana Samtani Singhania, will help you through the first steps of transforming your entrepreneurial idea into a viable business venture. Learn more >>>

The post Information You Should Always Include & Information You Should Always Leave Out of a Business Plan appeared first on WeBC.

One of the first things I need to know is how much they’d like to borrow. It’s surprising how many people can’t answer this question! 

Often people want to know how much they qualify for, or just want to borrow as much as they can. As a business owner, this might make sense to you. The more money you can get, the more you can use it to grow. But as a business lender, we need to be confident that you will be able to pay back the loan. We need to understand the full picture—exactly how much you want to borrow, how you will spend it, and how that spending will help drive revenues.  

To get that information we will ask for a cash flow forecast (also known as a cash flow projection), and this is a big part of how we learn about your business and make our lending decisions. In this blog post I’m going to walk through a short guide to putting together a cash flow forecast to apply for a loan. 

What is a cash flow forecast? 

Put simply, a cash flow forecast is a forward-looking estimate of how much money you think is going to flow in and out of your business over time. Most lenders will be looking for a month-by-month forecast, which means you will need to estimate your cash inflows and outflows for each month. There are three main components: Revenues, Cost of Goods Sold (COGS), and Operating Expenses, which we’ll dig into in a minute.

What does a cash flow projection tell us?

Your cash flow projection tells you a lot about your business. It gives you a way to understand your revenues and expenses for one thing, which can help us understand business viability. More crucially, it helps you understand if you will have enough money to do what you’re planning to do. 

That’s why, in addition to understanding your revenues, COGS, and operating expenses, you also need to know your sources of cash (i.e. your own cash contributions, contributions from equity investors, and funding from loans), and any one-time costs that you will incur at start-up, such as leasehold improvements, or equipment purchases.

Put all of this together, and you’ll understand how much cash you will have at any time, and how and when cash is going to be spent. 

• If your projections ever show a negative cash position, that’s a sign you will need to either cut down on your cash outflows (expenses, capital purchases, loan payments, etc.), or increase your cash inflows (revenue, loans, equity investments, or personal cash contributions). 
• If you have consistently positive monthly projected cash flows, that’s a good sign. But if they’re too positive and you’re ending your first year with a huge amount in the bank, that can be a red flag. It’s all about being as realistic as possible.

You may be thinking: “But wait, I can’t see into the future!”

Predicting the future is tough. In fact, it’s impossible! But don’t get hung up on that. No one expects perfection, but it’s critical that your projections reflect a realistic (i.e. not overly optimistic) scenario.

Let’s walk through some tips. 

Sources of cash

The first number you need for the cash flow projection is starting cash. If you are an existing business, you can look at your bank account to see what’s available. If you’re starting fresh, you can think about how much of your own money (or someone else’s) you’re investing into the business. 

Then, you can add any other cash injections in the month they will be received. So if you are expecting a gift from Aunt Martha in May, or for your loan to go through in April, those entries should go in those months.

Projecting your Revenues

Projecting revenues is one of the most difficult parts of preparing a cash flow projection. Put  simply, revenues are the money that you earn for selling your goods or services. 

The easiest way to estimate your revenues is to break your sales down into smaller component parts. This could look like estimating the number of sales you’ll have per hour, per day, or per week. Then multiply that out by the average unit price to estimate revenue for the entire month. 

To estimate how many sales you will have, you can look at similar businesses in your area. How many people per hour are buying a coffee at the shop down the road during different parts of the day? 

Or you can base revenue projections on capacity. For example, if you have three dog groomers working, and they can each handle five dogs per day, you can conceivably groom 15 dogs per day. However, you should always scale the full capacity number back to account for slower days, sickness, and that kind of thing. Maybe you can base your estimates on 80% of full capacity during busy times, and scale that back for times you know will be slower. 

Just remember to give yourself time to ramp up. It will probably take more time than you think to get to full sales. If you’re a start-up, giving yourself a few months with little or no sales will help you understand your cash needs more clearly. You should also account for seasonality—will you have more sales during certain times of year?

Projecting your Cost of Goods Sold

Cost of Goods Sold (COGS) are the direct costs that you incur when selling your product or service. This could include the costs of inventory you are reselling in your store, the cost of coffee beans, cups, and other ingredients at your coffee shop, or the cost of wages and shampoo if you’re a dog groomer. 

In many industries, you can estimate your Cost of Goods Sold based on a percentage of your revenues. For example, if you have a clothing shop and you always mark your product up by a certain percentage (say 100%), it is straightforward to estimate your COGS. For every $100 of revenue, you will have $50 in costs. This means you could estimate your COGS at 50% of revenues. But the best way to estimate your cost of goods sold is to really understand what goes into each product or service you sell. So take the time to break down your offerings to really understand your direct costs. 

Projecting your Operating Expenses

Operating expenses, sometimes also called fixed expenses, are the expenditures you make as a cost of doing business. This can include items such as: 

• Rent
• Utilities
• Management wages
• Insurance
• Professional fees
• Marketing costs 
• …and many others.

Unlike COGS, these expenses are not directly tied to producing your goods or services. So, for example, if you sell more ice cream in August than in December, your COGS will go down in December, but your operating expenses won’t. After all, you still need to pay rent and keep the freezers running! 

Many operating expenses are straightforward to estimate because they are fixed each month. Others may only be incurred sometimes, such as accounting expenses at year end or one-off repair costs when the freezer is on the fritz. 

Now, look at your cash situation

Once you’ve entered your revenues, COGS, and expenses, have a look at the actual cash flow. Are you cash flow positive most months? Are there any times when your net ending cash is negative? If so, how will you fill that hole? Debt? Cutting expenses? This is where the real magic of the cash flow projection comes in. It will help you look down the road and understand when you might see a cash crunch. This gives you time to come up with a plan.

Closing advice

• Don’t be too optimistic: We want your business to be successful, but if your projections are too optimistic, it may make your lender question whether your assumptions are realistic. 
• Consider scenarios: Your lender might want to see different scenarios for your cash flow projection. Whenever possible, build your projections in a way that lets you play around with different variables to see how that changes your results. Not good with excel? Sorry to say there is no quick fix for this, but know that the more time you can invest into understanding excel, the faster you will be with setting up and revising your projections. 
• Use benchmarking tools: Industry Canada has a small business benchmarking tool that provides information about business financial performance. You can look up your industry to get an idea of the revenues, COGS and expenses from businesses like yours. Just remember, there is a lot of variation between businesses, so you should only use this as a tool to help verify your own (well thought out) estimates.
• Consider timing: Another note is to remember timing—if you are a cash business, like a coffee shop or salon, you will get your cash when the service or good is delivered. However, if you invoice for your services, you will receive the cash a little bit later. Same goes for expenses. Maybe you have 60-day terms with your suppliers. That will keep cash in your accounts for longer. Make sure you account for this in your projections.

So there you have it, your quick guide to putting together a cash flow projection to apply for a loan. We hope you will find these tips to be useful.

Looking for more support?

• Check out our free WeBC Cash Flow Projection Template.
• Enroll in our free “Financial Fitness” on-demand course for a step-by-step look at each of your financial statements and how you can use them to make better business decisions.
• Join our free Business Loan Info Session to learn more about our lending program and what documents you need to apply for a loan.

The post Guide to putting together a cash flow forecast to apply for a loan appeared first on WeBC.

At WeBC, we’ve provided business loans to women entrepreneurs since 1995, and we work with other lenders to help women get the financing they need to succeed. As a Business Advisor, I speak with women every day who are exploring their options. Here are some of my top tips for women who would like to access capital in BC.

1. Understand Your Lending Options in BC – Lenders 101

Let’s start at the very beginning by understanding what lending options are available to borrowers. You’re probably aware that there are a lot of different lenders, but who should you talk to first? Generally, I like to break down lenders into three categories.

Lending Option #1: Banks and Credit Unions

Banks and credit unions are sometimes known as ‘traditional lenders.’ These lenders will look at your credit score, personal financial history, and the financials of your business (among other things), and will compare those numbers against their lending guidelines to make a decision. This process is sometimes known as ‘formula lending.’ If you don’t meet their criteria, you are unlikely to be approved. Some banks and credit unions have special programs for equity-seeking groups, but there usually aren’t other demographic considerations. If you are in a good personal financial situation and have strong credit, a bank or credit union might be a good place for you to start your lending journey.

Lending Option #2: Developmental Lenders

Developmental lenders usually receive funding from the government to provide loans to small businesses as a way of supporting economic development. Developmental lenders in BC include:

1. WeBC – For businesses owned and controlled by women
2. Community Futures – For businesses in rural areas (i.e., not Vancouver or Victoria)
3. Futurpreneur Canada  – For folks under the age of 40 starting a new business
4. Business Development Bank of Canada – Generally for established businesses, but they have many different programs
5. Aboriginal Financial Institutions – For Indigenous-owned businesses

Developmental lenders work with a lot of small businesses who can’t secure the required financing through traditional lenders, so if you’re not having luck at your bank, a developmental lender should be your next stop.  These lenders can often also offer additional supports to help you on your business journey. For example, at WeBC we have a mentoring program, a skills development program, and a business advising service that are all included as part of your loan care.

Lending Option #3: Alternative Lenders

Alternative lenders can vary from emergency lenders who will give a loan to almost anyone (for a price, of course), to industry-specific lenders who have created specialized loan products to meet specific requirements. Alternative lenders definitely play a role in the lending ecosystem, but I would generally advise entrepreneurs to approach with caution. Make sure you have a clear understanding of the payment terms and conditions, and if something seems too good to be true or comes with high pressure tactics, listen to your gut.If you have a woman-owned business in BC and aren’t sure where to start, WeBC is an excellent first stop. To learn more about lending program, you can check out our bi-weekly Business Loans Information Session (BLIS) webinar, which will provide more information and connect you with a Business Advisor who can help you start putting together your funding puzzle.

2. Understand if you are Eligible for a Business Loan

My next top tip for people who are seeking a business loan is to understand your eligibility with each business lender. As outlined above, there are a lot of different lenders out there, so your next step is to research the different lenders and what their criteria are. You can learn a lot from a lender’s website, but once you’ve determined your basic eligibility, you’re often going to have to connect with a real person to understand if a lending program is a good fit.

Common eligibility requirements include:

• Demographics, especially for developmental lenders. For example, to apply with WeBC your business must be majority owned and controlled by a woman, and to apply with Futurpreneur you must be under the age of 40. 
• How long you have been operating for. For example, BDC will generally only lend to businesses that have been operating for more than a year, while Futurpreneur can only work with new businesses.
• Residency and citizenship, or operating in a specific geographic location, particularly for developmental lenders that are funded by the government.
• Minimum credit score. Some lenders will require you to have a minimum credit score to borrow from them, so it’s a good idea to pull your own credit report from one of the main credit reporting agencies in Canada (Equifax Canada or TransUnion) to check your score and make sure there are no errors on the report. 

Minimum qualifying scores vary from lender to lender and often aren’t generally posted openly, but if your score is in the 700s or higher, you are probably in a strong position to get a loan. If your score is in the mid-600s or lower, you may find it more challenging. At WeBC, the only time we use a credit score cut off is for our unsecured Equal Access to Capital loans; we do not have a minimum credit score for our main loan program. 

Another key eligibility consideration is security and equity – which leads me to my next tip:

3. Understand what security is, and how much you have available

Most people already have an idea of what security is—security is the lender’s claim on a borrower’s assets in case the borrower can’t repay their loan. Usually, specific assets (also known as collateral) are used as security. The lender will register these assets, and if you can’t repay your loan, the lender can sell the assets and keep the proceeds to recover some of the value of the loan. Lenders can often take business assets or personal assets as collateral.

Different lenders will have different security requirements. Some lenders want to be 100% secured, which means that you need to pledge assets to the loan that are worth the same amount that you are borrowing. At WeBC, we generally require you to pledge security that is worth at least 30% of the value of your loan, though there are exceptions.

So, before you talk to lenders, take a minute to think about what kind of assets you might be able to offer to secure the loan—do you have cash, a car, property, or equipment? 

Remember, when a lender values your collateral, they will need to discount it. This means its value as collateral will be less than what you paid for it, and will be less than its current market value (sometimes by quite a lot). You should also keep in mind that lenders usually can’t take an asset for security if there is already a lien on it. So if you want to use a vehicle for security, you can’t still be paying it off—you need to own it free and clear.

4. Understand what equity is and how much you have contributed (or plan to contribute) to your business

The other eligibility concept to understand is equity. At its most basic, equity is the money that you invest into the business. This could be personal cash that you have invested over the years (share capital), or it could be profits that you have reinvested into the business over time (retained earnings). When you apply with a lender, they may ask how much equity you have available to contribute, or they may ask how much equity is currently in the business. 

• If you have an existing business, looking at your balance sheet (if you have one) will be a good place to start to understand your equity position. If you don’t have a balance sheet, you may need to verify your equity investments another way.
• If you’re starting a new business, you’ll need to do some personal reflection to decide how much of your own money you are ready to contribute.  And remember, a personal contribution should come from cash, not from taking out additional personal debt.

All lenders will be looking to see that you have some equity in the business. At WeBC, our guideline is you must contribute at least 25% of the value of your debt as equity (with an exception for our joint loan program with Futurpreneur). So if you are planning to take out $100,000 in total debt, you should be able to contribute at least $25,000 of your own money, or show that you have already invested that amount. If you don’t have any of your own money to contribute to your business, or if you have low or negative equity on your balance sheet, it may be difficult to secure a business loan.

5. Prepare a strong business plan

Your lender is going to need to know a lot about your business before they can make a lending decision, and the best way to communicate that information is with a business plan. Your business plan should lay out the fundamentals of your business, and should inform the reader about where you’re currently at in your business journey, where you are going, and what it will take to get there. 

Check out our free guide, How to Write an Effective Business Plan for more details, but here are a few key questions to make sure you cover in your plan:

1. What problem are you solving? 
2. Who is your target market? 
3. How have you established Proof of Concept? Or, in other words, how do you know that people actually want to buy what you are selling?
4. How are you different from your competitors?
5. Why are you the right person to operate this business?
6. What do you need to execute your plan? (people, equipment, space, etc)
7. What is your action plan?
8. What are the main risks you may face, and how will you manage those risks?

How long should your business plan be? The answer, of course, is: it depends! The trick is to make sure that it includes all of the essential business planning information without going overboard with nonessential information. I have seen excellent business plans that are 10-15 pages, and 30 page plans that are still missing a lot of information. Try to review your plan with an eye towards taking out the ‘fluff’—your lenders will thank you!

Once your business plan is prepared, don’t forget to keep it alive! I recommend having a look at your business plan every few months to see if you’re still on track. If your plans change, take some time to update the business plan—this process may help you identify potential roadblocks or opportunities with your new path.

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6. Prepare a realistic cash flow projection

Along with your business plan, a cash flow projection is the other main way that you will tell your story to a lender. Cash flow projections are very important, so make sure you take the time to be thoughtful and thorough.

Your cash flow projection is a forward-looking estimate of how much revenue you think your business will earn, and what costs you will incur to earn that revenue. Your cash flow projection should also include all the one-off costs associated with starting or expanding a business, such as purchasing equipment or doing leasehold improvements. 

Your lender will look at your sources of cash (revenue, loans, and personal contributions), against your uses of cash (expenses, asset purchases, etc.), to make sure you will have enough money to execute your plan.

A common challenge with cash flow projections is that people are often too optimistic. If your projections look too good to be true, your lender may not be confident in your estimates. My advice is to prepare at least two cash flow scenarios: one optimistic version that shows your revenues and expenses if everything goes well, and one pessimistic scenario that shows the business just breaking even. This provides the lender with valuable information. 

You also need to be able to back up your revenue and expense estimates. If you are an existing business, you can use past financial data to get an idea of what your revenues and expenses will be in the future. If you’re a new business though, it can be more challenging – after all, you don’t have a crystal ball!  

If you’re just starting up, operating expenses can often be verified by doing research and calling your service providers to get quotes. To estimate your Cost of Goods Sold, you can look at industry benchmarks to understand what a good Gross Margin is for your business and how that translates into Cost of Goods Sold. 

Revenues can be a bit trickier to estimate, because no one really knows how much they will earn until they open their doors. However, there are techniques you can use to make an informed guess. For example, you can estimate how many customers you think you will have in a day, and how much you think they will spend per visit. That will get you an idea of your potential daily sales. Then you need to adjust daily sales to account for your busier days and slower days. You also need to consider any seasonal changes to your sales. For example, if you’re in the ice cream business, you might see sales pick up in the summer and slow down in the winter. 

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7. Get your timing right 

When you’re planning to apply for a business loan, it’s important to get the timing right. If you apply too early, your lender won’t have enough information to do a full assessment, but if you apply too late, you may find yourself running into trouble financially, or you might not be able to meet your own timelines. 

A good rule of thumb is before you apply you should have some level of certainty about the main expenditures you will need to make. This means you should have quotes for equipment or major work that needs to be done, and, if you need a location for your business, you should have a specific place in mind, and should have already started talking to the landlord. Of course, you probably shouldn’t sign a binding lease or purchase order before you’ve been approved for the loan you need, but try to get as far along as you can without fully committing.

You should also make sure you understand your lender’s timelines. It can sometimes take a while (especially for developmental lenders) to make a lending decision, so it’s a good idea to work those timelines into your overall plan. Make sure you have enough time to commit to the process, because the faster you respond to your lender, the faster they can get back to you with a decision.

8. Get your ducks in a row

Lastly, applying for a loan can be a lot of work! In addition to preparing the business plan and cash flow projection, your lender will also ask you to gather and send all sorts of other documentation as well. The better organized you are when you apply, the better the experience will be for you and the lender (and it’s always a good idea to keep your lender happy!) 

Here are a few things to get ready:

• If you’re an existing business, make sure you have your most recent year end financials ready to go. Also be prepared to send year-to-date statements showing your revenues and expenses from the date of your last financial statements up until the present.
• If you’re planning to make some big purchases with your loan funds, try to get detailed quotes. This is especially important if your project involves construction work; many clients can be surprised at the difference between the ‘ballpark’ estimate they put together and the detailed quote for how much it will actually cost.
• Make sure you’re available. Your lender will have lots of questions for you, so make sure you have the time to invest in the process. 

Applying for a business loan can be a daunting process, but don’t let that scare you! Lenders are there to provide information and help you through the process. 

And remember, you may need to talk to a few lenders to find the right fit for you—it’s all part of the process. Hopefully the tips in this blog will help you move through the process more smoothly. 

Join one of our free Zoom sessions to learn about our loans program and how you may be able to access $150K to start, buy or grow your business.

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1. Are you eligible for the lender’s programs?

I go into high-level eligibility criteria for the main categories of business lenders in a previous post. This includes factors like your credit history, financial situation, demographic profile and the financial health and overall viability of your business. 

Most lenders have a website with the main eligibility considerations listed, but sometimes there are other criteria that are not covered, or they will need to ask you some detailed questions before they can determine your eligibility. 

It is always a good idea to reach out to potential lenders to make sure you’re eligible to apply (before you get your hopes up!)

2. How much do you need, and when can you pay it back?

Some lenders can lend more than others. If you require a small loan, or you need a financial buffer to help you when you are short on cash,  you might find that a business line of credit is a better option for you than a term loan. 

Lines of credit can be drawn down only when required and may take less time to approve. They offer flexibility because you only need to pay interest on the funds you are actually using. 

If you need a larger amount and would like to pay the loan back over a longer period of the term, a term loan might be a better option. For a term loan, you will be placed on a payment schedule for a number of years. 

WeBC offers business loans for up to 5 years, but other lenders can offer longer terms, which might be beneficial if you are purchasing a major asset. Interest rates may be variable or fixed. If the rate is variable, that means your payment could change over the life of the loan. 

3. When do you need the funds?

If you need loan funds as soon as possible, or if you need funds to cover an emergency expenditure, this may be a key factor when choosing a lender. 

At WeBC, for example, it can take up to 4-6 weeks to make a lending decision, and sometimes longer, depending on your situation. If the loan is approved, it can then take additional time for the funds to be disbursed to you. If time is an important consideration, make sure to discuss that with potential lenders. 

Also, be aware of lenders that promise they can approve anyone for a business loan quickly. These lenders may charge high-interest rates or have other unfavourable terms to make up for the risk they are taking on. 

4. Are you in a specialized industry or do you need a specific kind of loan?

Lenders may specialize in a particular industry or may have loan products that are created specifically for certain needs. There are lenders that specialize in working with farmers, manufacturing companies, e-commerce sellers, or restaurants, among countless others. 

For example, some e-commerce lenders can provide loans that are repaid based on a percentage of your sales, or an agricultural lender might accept seasonal payments due to the nature of a farm’s revenue timing. 

Because these lenders understand their industries, they have developed products tailored to the needs of their borrowers and may be more flexible on some eligibility criteria than a non-specialized lender. 

5. What stage is your business in?

If your business is just starting up, you may be limited in how much you can borrow, and from which lender. Developmental lenders such as WeBC, Futurpreneur, and Community Futures are able to provide loans to new businesses, but you will need to have a strong business plan. 

If you have an existing business, you may have some additional options, but it is often a good idea to start by approaching your current bank for a loan, as they have a history with you and may already understand your business and ability to take on debt.

6. Do you need flexibility in your repayment terms?

Is there a chance that you might want to pay back your loan early? Would you benefit from a period of interest-only payments? If so, these are important things to discuss with potential lenders. 

Some lenders (such as WeBC) can offer a period of interest-only payments, which is especially helpful if you are a new business that is still growing its revenues. Other lenders will expect payment right away. 

Some lenders can also be more flexible than others if you want to pay back your loan early. At WeBC, we do not charge any fees or penalties for early repayment, and you can make lump sum payments at any time. Other lenders may limit your ability to make extra payments or charge additional fees to do so.

7. Are interest rates and fees important factors for you?

Everyone is familiar with interest rates, but many lenders also charge additional fees on top of interest. They may charge a penalty to pay out the loan early or may charge a monthly fee or a one-time administration fee. 

Make sure you understand all of the fees associated with your lender’s products and when they will be charged. Some lenders, like WeBC, offer an interest rate range, and the final rate is determined once your loan is approved. This means that you may not know exactly what your rate will be when you apply. However, we can certainly give you an idea of what to expect. 

Generally speaking, the higher the risk for the lender, the higher the interest rate will be.

8. Would you benefit from having access to advisory, mentoring, or skills development services?

As a developmental lender, WeBC offers wrap-around support, including complimentary business advising, mentoring, and skills development sessions. If you think this kind of support would be valuable to you, make sure you ask your lender what they offer. Some lenders may offer advisory services for a fee, while some are offered as a complementary service. 

9. Do you feel comfortable working with them?

As I said off the top, when you get a business loan, you are often entering into a long-term relationship with your lender. Along the way, you may encounter both good days and less good days in your business, so it’s a good idea to feel comfortable talking to your lender. 

When you meet with your lender, you should feel comfortable asking any questions you have, even if you’re afraid they might be “stupid questions.” Do they answer your questions in a way that you understand? If your lender uses a lot of jargon and confusing language, don’t be afraid to speak up and ask for more clarification. 

If they keep using confusing language or if you start to feel pressured, that might be a sign to talk to a different lender. 

When you’re looking for a business lender, it’s important to make sure you feel comfortable with whoever you are working with, and that the loan terms and support are appropriate for you. Don’t be afraid of reaching out to different lenders, and, if you can, take your time to make your decision. Hopefully, these tips will give you something to think about as you start your business lending journey!

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