How to Finance Your New Business Idea

Getting your new business off the ground takes more than just a great idea—it requires a solid financial plan. Whether you’re funding it yourself or looking for outside help, having the right strategy in place is key. Here’s a look at some of the ways to finance your venture and help to ensure you’re set up for success:

Personal Savings

Dipping into your own savings is the simplest way to fund your business. It lets you keep full control without having to answer to anyone else.

Friends and Family

Borrowing from friends and family can get you the cash you need quickly. Just make sure everything’s clear upfront to avoid any misunderstandings.

Small Business Loans

Banks and credit unions offer loans designed specifically for small businesses. These can provide a solid chunk of funding with a clear repayment plan. Take a look at TD Credit Solutions.

Grants

Grants are funds provided by government agencies or private organizations. They are highly competitive and often require a comprehensive application process, but they offer the advantage of not needing to be repaid. Check out Fundica to help you discover government grants and funding.

Business Incubators

Incubators are great for startups, offering not just money but also mentorship, office space, and networking opportunities to help you grow.

Crowdfunding

Online crowdfunding platforms let you raise small amounts of money from a large group of people. It’s also a great way to test and validate your business idea.

Investors (Angel Investors and Venture Capitalists)

Angel investors and venture capitalists can inject significant cash into your business in exchange for equity. Plus, they often bring valuable experience and connections to the table.

The benefits of a business credit card

When it comes to managing your business finances, a business credit card is a smart choice. Using personal credit cards alongside business credit cards can blur the lines between personal and business spending, but a business card is designed to meet your business needs, as well as offering perks like higher limits, business rewards, and easier expense tracking. Here’s why it’s great option:

Higher Credit Limits: Business credit cards typically offer higher limits than personal credit cards, giving you more flexibility to cover larger expenses as your business grows.
Relevant Rewards: Earn rewards that are tailored to business expenses, like cashback on office supplies or travel perks, helping you get more value from your spending.
Simplified Record-Keeping: Keeping your business and personal expenses separate makes bookkeeping and tax preparation much easier.
Builds Business Credit: Using a business credit card responsibly helps you build a solid business credit score.

What you need to know about small business loans

How do you know when it’s the right time to consider a small business loan or line of credit? You may look to financing options when planning a big purchase, like new equipment or property, expanding your business, or if you need extra cash to cover short-term cash flow gaps. Here’s the difference between the two:

Business Loan: Ideal for one-time big purchases or expansions, like buying equipment, making leasehold improvements, or purchasing/refinancing real estate.
Business Line of Credit: Perfect for ongoing cash flow needs, like buying inventory, covering payroll, or bridging the gap between payments and repaying suppliers.

A business loan is usually for larger, one-time needs, while a line of credit gives you flexibility for day-to-day expenses. With a loan, you reduce the balance over time, but with a line of credit, you can borrow, repay, and borrow again up to your credit limit.

When you’re ready to apply, make sure you’ve got a solid business plan, financial statements or projections, and a good credit history. Being prepared will boost your chances of getting the financing you need.

What you need to know about small business loans

Building Credit: Establishing a credit history in Canada is key to securing financing down the road. Start by opening a Canadian bank account, getting a credit card, and making sure you pay your bills on time to build a strong credit score.
Understanding the Financial Landscape: The Canadian financial system and regulations might be different from what you're used to. Take some time to learn about the local business environment, your tax obligations, and the funding options available for newcomers.
Accessing Newcomer Support Programs: Canada has various programs and resources designed to help newcomers start and grow their businesses. Look into government grants, loans, and mentorship opportunities that are tailored to your unique needs.
Networking and Community Integration: Building a local network is super important. Get involved with community organizations, business groups, and other entrepreneurs to gain insights, build partnerships, and become part of the Canadian business scene.

By keeping these points in mind, you’ll be better equipped to navigate the Canadian business landscape and set yourself up for success as a newcomer. Visit the new to Canada small business homepage to learn more.

Ways TD can help

At TD, we're dedicated to helping small businesses thrive at every stage. Here’s how we can support you in securing the funding you need to grow:

Fundica: Discover a wide range of government grants and funding opportunities tailored to your business through our partnership. Learn more.
Canada Small Business Financing: A government-backed loan or line of credit can help you finance the purchase of equipment, property, or other business needs.
TD Small Business Loan Calculator: Estimate your loan payments and explore your financing options with our easy-to-use loan calculator. Try it out.
TD Start-Up Costs Template: Plan and track your initial business expenses with our detailed start-up costs template. Get started.
Black Entrepreneur Credit Access Program: TD offers specialized support for Black entrepreneurs that focuses on providing more equitable access to credit and tailored financial solutions Learn more.
Women Entrepreneurship Loan Fund: TD collaborates with Women's Enterprise Organization of Canada (WEOC) which provides women-led businesses with the financing needed to grow their businesses. Explore your options.
Industry Expertise and Account Managers: Speak with one of our dedicated account managers who specialize in small business. Whether you’re looking for advice or specific solutions, our experts are here to help. Connect with us.

We’re here to back your small business every step of the way, helping you navigate the financial landscape and achieve your goals.

Talk to a TD Small Business Banking Specialist or Account Manager to get support

Connect with our dedicated team of specialized Regional Managers who can provide support based on your banking needs.

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