Equity Financing

In this case, the government invests in your company, much like a venture capitalist or angel might. The key difference is that the government is often more interested in economic stimulus and less anxious about the return on the investment - so there's less pressure on you to deliver short term profits to them right away.

An example of equity financing would be Subordinate Financing from the Business Development Bank of Canada (BDC). Subordinate financing can be seen as a cross between debt and equity financing. As with debt financing, although you require cash flow to pay back the loan, the repayment terms are usually much more flexible than regular debt financing. Available cash flow could be used as repayment instead of the depreciating company assets.

The attribute that subordinate financing shares with equity financing is the fact that the BDC is able to partake in the growth of your company through receiving stock options or royalties. This will be determined by the agreed upon terms between you and the BDC.

Here are some criteria for eligibility for small and medium businesses:
1)    Have a strong management team;
2)    Show proof of a profitable business;
3)    Have excellent financial controls;
4)    Be able to showcase a competitive advantage.

The only enterprise not eligible for subordinate financing would be start-ups.

Find out if you qualify for Equity Financing

Do you qualify? Call now...

1-866-682-7067

Obtain business funding for your Canadian small business. Call 1-866-682-7067 or write
Centre for Small Business Financing, 1500 Bank St, Room 425, Ottawa, Canada, K1H 1B8.

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