Grants are wonderful, for some important reasons:
But grants are just one type of funding that can be used to start and grow a business!
There are Many, Many Other Types of Business Funding Available
There are literally dozens of other types of funding for Canadian businesses besides grants, and in this chapter we cover 26 distinct funding categories (besides grants) that you might be able to access to start a new business or grow your existing business.
You can think of all the types of business funding as a “universe”, grouped into four “galaxies” (apologies – we were desperate for a metaphor):
Canadian Business Funding Universe: 27 Distinct Types of Funding for Entrepreneurs
In the following sections we briefly define each type of funding:
1. Self-Funding (aka Bootstrapping a Business)
Self-funding, or bootstrapping, a business involves paying for your business as you go – in other words, you’re not borrowing money or taking on investors.
Here are the main ways you can bootstrap a business:
2. Free Funding (Grants & More)
Free funding is just as it sounds: you get free money for your business, with no obligation to pay it back.
What’s the catch? Free money programs, such as government grants, are sometimes hard to find, and tend to be very competitive – because it’s free money!
Here are the main types of free money programs for businesses:
3. Debt Funding (Business Loans & Other Types of Credit)
Debt funding (also called debt financing) involves borrowing money for your business through one of these types of products:
4. Equity Funding (Selling a Stake in Your Business)
Equity funding (aka equity financing) involves selling a stake in your business.
The obvious downside of equity financing is that you don’t retain full ownership of your business (and you might have to listen to your investors!). The obvious upside is that you get an injection of money that you don’t have to pay back, as you would with debt financing.
Here are the main types of equity financing in Canada: