Startup Financing for Canadian Women Entrepreneurs

by David Dierking

3 min read

In 2016, The Bank of Montreal conducted a survey in conjunction with The Beacon Agency and Carleton University on Women, Entrepreneurship, and Risk. Of the women who participated in the survey, 80% believed that women face greater obstacles than men when acquiring loans from banks.

According to the study, “Lack of access to capital prevented many women from growing their businesses or slowed the process of growth because they had to self-finance their growth.”

Even though women in Canada have come a long way in terms of equality in the workplace, the evidence suggests a gender gap still exists with respect to the treatment of female business leaders or entrepreneurs. However, if you or a woman you know wants to start or expand a business, there is some good news.

New Doors Are Opening for Female Entrepreneurs

An announcement from Startup Canada and Evolocity Financial Group demonstrates that new doors are opening for women in business, especially entrepreneurs and small business leaders.

The initiative introduced a new Women Founders Fund to provide micro-grants to aspiring female entrepreneurs to help them get started or grow operations. This financing source was created specifically to address financial barriers for women across the country.

There are other grants, loans, and mentorship programs available to women looking to start or expand a business in Canada. In most cases, you only need to do a little bit of research to find out if your business, or business idea, matches the criteria for any given program.

Here is a quick, nonexhaustive list:

  • Atlantic Canada Opportunities Agency Women in Business Initiative
  • Paro Centre for Women’s Enterprise
  • Microlending for Women in Ontario
  • Entrepreneuriat au féminin
  • WEI’s Women’s Enterprise Initiative Loan Program
  • Royal Bank of Canada entrepreneurship programs for small business owners
  • Startup Canada Women Founders Fund by Evolocity Financial Group

Traditional Financing Options

Your startup business can always get a leg up from traditional financing options. In fact, even if you are planning on using a nontraditional female-focused program, it is a good idea to look for various other alternatives to demonstrate to potential lenders and equity partners that you are proactive and creative.

If you have been successful in another career path or with another company, or if you are fortunate enough to come from a wealthy and giving family, you can always look to personal investment funds or what bankers sometimes call “love money,” or patient capital.

You can also source capital from angel investors or venture capitalists. An angel investor is normally a wealthy benefactor who directly invests in small companies. In return, the investor may ask to counsel or supervise management practices, including holding a seat on your board of directors if you have one. Look to the Canadian Angel Investment Network for potential angel partners.

Venture capitalists are similar to angels, except they tend to be more institutionalised and highly focused on companies with high growth potential. While an angel investor might begin with smaller investment amounts between $50,000 and $200,000, a venture capitalist is more likely to look for $500,000 plus or $1 million plus investments. Oftentimes, the goal of the venture capital partnership is to take the target company public, meaning it sells ownership shares on the stock market, or resell it to a higher bidder.

You might also look to grants and subsidies that are not focused on women entrepreneurs specifically, but with which your business could still accelerate growth. Grants can be challenging to win, and they often come with restricting terms, including how the money must be allocated. Even so, grant money does not have to be repaid and doesn’t require you to give up ownership interest.

You can also receive startup funding from a bank. Bank loans are the most common source of funding for new or expanding small businesses. If you are interested in applying for a bank loan, do your research to ensure you pick the correct bank for your needs and you know how to tackle the application process.

Finding the Right Accounting Partner

QuickBooks is proud to partner with and assist female entrepreneurs. QuickBooks accounting products are specifically designed to help small businesses find their bearings, manage payroll and client accounts, master tax time, and organize financial goals.

These are the kinds of skills and competencies that can make the difference when you apply for grants or loans, or try to source an equity partnership. Third parties want to know you can get your bills out quickly and collect receivables efficiently. You want to be able to show that you know when you’re making money and when you’re not. Raising capital is much easier when you can generate financial reports any time and show you know how to run your business.

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