Financing for Indigenous Business Owners and Entrepreneurs

Are you an Indigenous entrepreneur? Do you own a business that operates within the Indigenous community? Are you looking for the right funding, but would prefer to work with a specialized lender that understands the specific concerns or issues you may have?

We have some good news! Loans Canada can connect all Canadian business owners and entrepreneurs with the financing they need. Keep reading for all the information you need about applying for and securing a business loan in Canada.  

Read this to learn all the small business vocabulary you need to know.

Financing For Your Business

There are a number of different financing types that are readily available to Indigenous business owners and investors, and each can serve a different purpose. These financing options include, but aren’t limited to:

• Small business loans for all purposes
• Federal and Provincial Government Financing
• Merchant cash advances
• Commercial mortgages and leasing
• Equipment and heavy machinery financing
• Debt consolidation loans and programs

Businesses That Qualify For Financing

As long as you can demonstrate an effective business strategy to the lender you’re applying with, any enterprise can qualify for loans and other financing options, including, but certainly not restricted to:

• Grain, livestock, fruit and vegetable, and other agricultural producers
• Hunting, fishing, camping, and outdoor sports retailers
• Restaurants, cafes, bakeries, and other food/beverage services
• Pet and animal-related businesses (groomers, veterinary clinics, pet stores, etc.)
• Transportation and shipping based companies
• Wellness spas
• Medical supply distributors
• Physiotherapy, dental, podiatry, and other medical practices
• Mobile health clinics
• Community centres, charities, and other nonprofit organizations

Putting Your Business Financing to Good Use

While you might think that a business financing is solely for the purpose of getting your company up and running, there are actually a ton of ways you can use it. For instance, when your business is backed by the appropriate financing, you can:

• Pay and provide benefits for all your staff members
• Take on additional staff upon business expansion
• Buy new furniture, tools, and office supplies
• Buy or lease the latest equipment and/or machinery
• Make your workplace safer (emergency exits, fire alarms, proper ventilation, etc.)
• Repair, renovate, or otherwise maintain any part of your workplace
• Lease or purchase additional space or open secondary work locations
• Rent spaces and acquire permits for charity/nonprofit events
• Pay and renew your business license and other required documentation

Click here to learn how you can expand your small business with new capital.

The Business Financing Application Process

When you apply for business financing, what lenders need to confirm is that your enterprise will be successful enough for you to repay the funding they’ll potentially be offering you. As we mentioned, preparing an effective business strategy is one way of doing that. You should also ask them what personal and financial documents are required, then update and organize those documents accordingly. To confirm your financial ability, your lender may also inspect elements such as:

• The income you generate on a monthly and yearly basis
• The value of any assets (house, car, etc.) you might be offering as loan security
• Your financial records (payment history, current debts, bank statements, etc.)
• Your employment record
• Your credit report, score, rating, and history
• Your cosigner’s financial and credit-related profile (if any)

Note: While offering up assets as collateral or finding a cosigner are both optional, either element may help you secure business financing, as well as better interest rates. especially when your own credit and finances are insufficient.

The Importance of Your Credit

As we said, certain factors relating to your credit may be used to confirm your financial strength when you apply for financing. That’s because your credit health and financial health go hand-in-hand, one factor affecting the other in various ways. Here are a few examples of where each credit component fits into the application process:

Credit Score – This three-digit number ranging from 300-900 is one of the first components that most lenders examine as a basic way of observing your credit health. The closer your score is to 900, the better your approval odds and interest rates will be. Typically, a score of 680 or higher will give you “good credit” and the best approval results. A score of 560 or lower gives you “bad credit” and will have the opposite effect.

Looking for a bad credit small business loan? Try reading this.

Credit Rating – This is a grade each of your credit accounts will receive while activated. Each account is labeled with a letter corresponding to the credit type:

• “I” means the credit is “installment-based” (personal loans, short-term loans, etc.)
• “R” means the credit is “revolving” (credit cards, etc.)
• “O” means the credit is “open” (lines of credit, student loans, etc.)

Each account also receives a number between 0 and 9, referring to how you’ve been managing the account. The closer your rating number is to 1, the better:

• “0” means the account is currently active, but unused.
• “1” means you’re paying the account on time or within 30 days of the designated payment due date.
• “9” is the worst rating, meaning the account hasn’t been paid and is therefore in collections or bankruptcy.  

For a more detailed explanation of your credit rating, check this out.

Credit History – With this factor, lenders can see how you’ve been handling your accounts over a predetermined number of years, which includes your credit types and payments toward those accounts. The longer history you have of timely and full payments over a variety of credit products, the healthier your history looks.

Credit Report – Your report is a detailed file that contains all the above components and is another way that lenders can confirm your ability to handle potential credit. It also contains your personal details, such as your name, address, social insurance number, and other such details that validate your identity.

Note: Not all lenders look at your credit when you apply. However, as the business financing option you’re requesting might be risky, a credit check may be mandatory. Always try to improve your credit before you apply. Remember, the better your credit looks the more creditworthy you’ll be declared.

Click this link for information about small business loans without credit checks.

Giving Back and Looking Forward

Remember, there are countless benefits that come with securing the right type of financing for your Indigenous business. While building your enterprise is one of the main benefits, you’ll also have to potential to:

• Make a contribution to those around you – Giving where you can is essential to helping any community grow. Operating your own business will not only benefit you and your loved ones, but you may also be employing other community members and helping them do the same.
• Help other small businesses gain success – Every business takes significant effort to get off its feet. Once you’ve managed to do that for yourself, you can also one-day use part of your profits to invest in the small businesses around you. Your funding will be greatly appreciated and going toward a good cause, particularly if you’re investing in a nonprofit organization. Becoming a business entrepreneur can help other parts of your community thrive.  
• Make connections that further grow your business – Like any business venture, Indigenous enterprises often have difficulty getting the social and financial attention they deserve. However, by getting proper financing and pushing your business to the next level, you’ll be showcasing you and your community’s prowess to other business entrepreneurs across the country. Getting your name out there in the business world and making the right connections is an important first step toward lasting success.   

The Business Loan You Want

If you’re an Indigenous entrepreneur looking for specialized funding from a lender that will work with you, you’ve come to the right place. Loans Canada can help match you with the right lender based on your wants and needs. Get started by filling out an application today!