Despite new, expanded loan options, Canadian small businesses still struggle to get financing

Lauryn Zhukovsky, co-founder of The Upside Inc., recently secured $750,000. The funding, a combination of private capital and a loan from BDC, will go to technology updates, marketing, and a larger warehouse, office and showroom space.The promises for easy and fast online financing for small business owners are plentiful.

“Women-owned businesses are more likely to self-finance, so they will get a home equity line of credit or they will max out their credit cards before they approach a bank,” says Angela Richardson, an accountant and partner at Richardson Miller LLP, and chair of the board of directors at Alberta Women Entrepreneurs.

In his 25 years with the CFIB, Mr. Kelly says he has noticed more businesses try to operate without financing from a bank, relying instead on their own equity or assets, family and friends, or personal or corporate credit cards. “They try to self-finance as much as possible and that can really limit a business’s growth opportunities,” he says.New digital companies aim to address such issues. Cato Pastoll, CEO and co-founder of Loop Securities Inc.

Others startups such as Clear Finance Technology Corp., known as Clearbanc, offer new models for financing. Co-led by Michele Romanow ofin capital, provides cash advances to e-commerce companies that want money for marketing. Customers don’t have to give personal guarantees, give up equity or undergo credit checks.

Arun Kumar, head of small business banking at Bank of Montreal, says the small business segment of the market has been underserved, as banks used either heavy commercial models or simplistic retail models to lend to all small business owners. “If you didn’t fit perfectly into either, you’re basically priced accordingly,” he says.

GlobeSmallBiz We all know this is TRUDEAU’s fault and nothing to do with global financial markets and cautious investors!!!!!

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