One of the main things that both seasoned and novice business owners have in common? The need for financing to help grow and build their companies. If you’re a Canadian business owner and you’re looking to take your business to the help level, we can help. We’ll leverage our years of experience to match you with a lender who meets all your needs and can get you the loan you need to succeed.
Since there are so many different costs to consider as a pet store owner, it’s better if you don’t have to search through your sofa cushions, looking for enough extra money to see your business plan through to its completion. Not only should your store succeed, but you also should never have to worry about getting where you’re going to get your funding from. You’re in luck, Loans Canada has the solution to your money problems! To learn more about what a good business loan can do for you, keep reading.
In order to qualify for a business loan, both the company and its owner must meet certain criteria. The requirements are structured to identify reliable borrowers, those who will be able to repay the loan responsibly. To determine the merit of a potential borrower, lenders will require:
Both you and your business will have a credit score. This score is set forth by the Canadian credit bureaus, TransUnion and Equifax. Analyzing your debt, payments, and other criteria, the bureaus assign you a credit score. The higher the number, the better your credit and the more likely you will qualify for a loan with good terms.
A good measure of the quantity of business your pet store does, revenue refers to the money that your company earns through its regular business operations. It gives a potential lender a picture of how much money you take in before expenses.
Pet stores have overheads, ranging from the animals in their care to the building in which they operate. Cash flow follows the money after expenses. The net amount gives a lender an idea of how liquid your funds are. This is the money that would be used to pay the loan installments, so is naturally an important metric.
Assets are property or valuable items owned by your business. This can be vehicles, real estate, equipment, etc. It gives the lender an idea of what your company owns, which, if needed, could be liquidated and used to repay a loan.
Check out how you can use your business assets to secure a loan.
Especially if the business is structured as a sole proprietorship, the lender will be interested in both the debt of the business and that of the owner. Loans qualification is calculated by (among other things) a measure of debt-to-income. This ratio shows whether you are logically able to repay the debt of the business loan you are seeking. Naturally, it is preferable to have less debt.
Particularly to companies with unique operations such as pet stores, the lender will want proof of concept. Unlike other companies, a great deal of your inventory is vulnerable to a wide variety of issues. This factors into operational costs; and, without a proven history of successful business operations, can make you appear a high-risk borrower. Conversely, more time in business highlights that you know how to turn a profit, making you a more desirable borrower.
| Amount | APR | Term (months) | ||
 | 1k-300k | Fee-Based: Starting at 9% | 12- 60 | Learn more |
 | 5k-300k | 8% – 29% | 6-18 | Learn more |
 | 1k-500k | +5.9% | 3-60 | Learn more |
 | Up to 300k | 8%-22% | 6-12 | Learn more |
 | 5k-500k | - | 6-18 | Learn more |
 | 100K + | 6.05% + | 60 | Learn more |
 | 5K-100k | 15%+ | 12-18 | Learn more |
In order to substantiate the claims you are making about your business, the lender will require specific documentation. By properly organizing and presenting your information, you can showcase your business’ merit, as well as your administrative capacity. Items you will need are:
Financial Documents: Provide any relevant financial paperwork, the specifics depending on the structure of your business. It could be a purchase order, a title to the property of the business location, or other statements highlighting the operational merit of your company.
Tax Returns: For sole proprietorships, you will need to supply both personal and business tax returns. These showcase that you declare all your income, pay taxes, and that there are no liens against the pet store.
Bank Statements: Provide these statements for as far back as possible, though it helps to supply them first least the year preceding the loan inquiry. These documents substantiate your claims in terms of revenue and cash flow. The bank statements, in conjunction with your tax returns, paints a thorough picture of your day-to-day and large-scale operations.
Revenue Statements: Especially for businesses that take payment in multiple forms (cash, debit, etc.), revenue statements supply information about the money your company is taking in before expenses. Instead of separately having to track down these transactions by cross-referencing purchase orders and bank statements, you can simplify the process by offering up a revenue statement to the potential lender.
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Perhaps you haven’t been in business for long enough to qualify for a standard business loan. Maybe you determined that the interest rates are higher than you are willing to pay and want to investigate other options. The good news is that business loans aren’t the only financing option for your company. There are other approaches, each with a unique set of advantages for a pet store.
A business line of credit is a form of revolving credit with an interesting set of benefits. Typically, these are offered through a major financial institution, so the business could get one through the bank it uses. The line of credit gives you a set amount of funds accessible. For example, say your pet store gets a $10,000 line of credit and uses $3,000 to pay for inventory. The pet store only pays interest on that $3,000. When it is repaid, the company regains access to the full $10,000. Another draw is that lines of credit can be used toward any expenses, ranging from staff salaries to supplies.
While most companies have a business credit card, it is usually not used as a primary alternative to a business loan. This is due to the high-interest rates and generally low credit limit. However, it is wise to have a business credit card for a couple of reasons. The pet store can use responsible payments with the card to build a good credit profile. Additionally, it can be used for incidentals and online transactions. Keep in mind that it is better to use a credit card as a backup, with another approach being the primary mode of financing.
Check out when you should you a business credit card over a business line of credit.
This type of financing is unique in that it is not technically a loan. A merchant cash advance provides the pet store with money upfront, exchanged for a percentage of the store’s income. Typically, this is automatically repaid as a portion of the credit card payments received. The lender will look at the pet store’s credit card receipts to determine if they have sufficient transactions to repay the advance.
To operate, a pet store requires a fair amount of equipment. Some are smaller in size and can be purchased outright (things like heaters and kennels). Other items are larger and require a loan such as an aquarium. An equipment loan is a way for businesses to finance items used in regular business operations. Instead of using a credit card to finance these items and incurring high-interest rates, you can use an equipment loan to spread out payments over a specific time period.
This type of loan is offered through the Canadian government, offering amounts as high as one million toward business expenses, depending on how the funds are used. Up to $350,000 is available for leasehold improvements and equipment. The CSBFP is designed to incentivize and support small business growth, whether through improvements or expansion. As a pet store, you could use this to expand your services. For instance, if you function as a pet store but want to expand to in-house veterinarian services, this loan is a viable solution.
Great question! There are many other areas of your pet store that can use some financial attention. You could use your business loan to pay for expenses like:
There are a few proven measures to get yourself a business loan at a competitive rate. While they require advance planning, just a few simple steps can offer substantial savings in terms of interest. The key steps include:
As a business owner, you’ve got a ton of different things to consider. So mark one thing off your list and apply today!
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