Wednesday, 3rd November 2021 | Small business financing Canada

How do Canada small business loans work?

Understanding how a Small Business Loan Works can help you secure one easily. Read our blog to know everything about Small Business Loans in Canada and how Capital is the perfect choice for securing your business loan!

Every small business will need to acquire financing at some point in order to remain competitive in its market. Perhaps there are growth plans in the works, or a new marketing strategy needs to be funded. Small enterprises in Canada rely heavily on loans to stay afloat. This article delves into the workings of Canada’s small business loan programs and how iCapital can help small businesses with easy loan approvals.


What Is A Small Business Loan?


A loan is a type of debt that a small business takes on. The borrower receives a sum of money from the lender, which is frequently a corporation, financial organization, or government. In exchange, the borrower agrees to a set of terms, which may include finance charges, interest, a repayment schedule, and other stipulations.


What Is A Small Business Loan Used For?


Small business loan fixed assets and cover day-to-day working and operational capital expenses. Cash flow, equipment upgrades, inventories, renovations, staffing, marketing, tax payments, and supplier payments are all examples of this.


Documents Required to Qualify for Small Business Loans


Various documentation may be required to validate your information when applying for a small business loan:


Plan of Action

By giving a copy of your business plan to the lender, you can demonstrate why you need a loan and how you plan to use the funds. This paper will assist you in gaining the lender's confidence.


Bank Account Statements

Lenders may want to check your company's cash flow.


Balance Sheet

Your lender usually requires this to assess your complete liabilities and assets.


Income Statement

Your income statement will show your lender what your expenses are, as well as your cost of goods sold and net income.

Returns on Income

This will be used by your lender to verify that the income you stated matches what you reported to the CRA. Any differences may endanger the approval of your application.

Financial Records of Individuals

Some lenders may request a copy of your credit report to assess your financial situation. A “good credit score” depending on the type of loan is defined as:

  • Short-term Business Loan - 550

  • Equipment Financing - 600

  • Small Business Administration Loans (SBA) - 640

  • Bank Loans - 700+

Purchase Information

Some lenders might also want to review information pertaining to the assets you wish to purchase, purchase agreements, and sales contracts in effect.

What Is The Cost Of A Small Business Loan?

The amount that the lender will charge determines the loan's cost. The amount, or interest rate, will be determined using the current Canadian index rate, your estimated credit risk, and the loan term duration. A long-term loan with a strong credit score will cost less in interest than a short-term loan with a bad credit score.
The interest rate may be fixed or fluctuating. A fixed rate does not alter during the life of the loan. A variable rate is based on the Canadian index rate and will fluctuate as per the index rate.
Fees may be charged before, during, and after the lending transaction. Application, cheque processing, paperwork, late payment, prepayment, and returned payment are all examples of fees.

In Canada, Where Can You Acquire A Small Business Loan?

Established Banks

Small firms frequently borrow money from large banks as they prove to be a common source of capital.

Credit Unions

Credit unions are financial cooperatives that offer their members standard banking services. As they are not-for-profit, they can at times provide better loan rates compared to a regular bank.

Microloans

Microloans are designed to assist small firms that are facing difficulty obtaining finance from a bank or credit union. Normally, the sum is less than $50,000. Microloans frequently come with limits on how the money can be spent.

Community Loan Funds

Non-profit organizations that provide loans to local initiatives and develop entrepreneurship in the community are supported by community loans.

Canadian Small Business Financing Program

Small businesses and start-ups with less than $10 million in gross revenue can apply for financing for land improvements, renovations, and equipment through the Canada small business loan program, which is run in partnership with financial institutions.

Lenders On The Internet

Alternatives to typical bank loans include online lenders. Online lenders like iCapital differ from banks in terms of measuring creditworthiness, their approach to processing a small business loan, and the technology used.

Why iCapital is Your Choice Lender

iCapital is one of the most trusted online lenders in Canada. We help you secure loans quickly without having to go through cumbersome and time-consuming paperwork. We’re also here for companies in industries unable to secure a loan from a bank or those rejected on the grounds of credit score. 
Since 2007, we’ve been committed to helping small businesses expand their business with easy loan approvals within 48 hours. Our technology and security are top-notch, keeping your money and account safe from hackers. We follow a 100% automated process that eliminates the scope of any human errors. Contact iCapital at (877) 251-7171 today to know more about small business loans and how we can help you secure a loan quickly.

 

 

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Cybersecurity Strategies for Small Businesses

 

As we embark on a new year, the ever-evolving digital landscape presents opportunities and challenges. In 2024, one of the paramount challenges demanding attention is the persistent threat of cyber attacks. 

Safeguarding your business against these threats is not just advisable—it's imperative. Let's explore the crucial cybersecurity strategies every small business should adopt for a secure and prosperous journey throughout 2024.

Understanding the Landscape

The IBC’s 2023 Cyber Security Survey revealed a concerning trend among small businesses. Despite over 60% considering their size immune to cybercriminal attention, small businesses with 1,000 or fewer employees experienced a surprising 43% of yearly cyber attacks in 2023.

Crucial Cybersecurity Strategies for Small Businesses

Educate Your Team

Empowering your team with effective cyber threat identification skills is essential. Regular training sessions can equip them to recognize phishing emails, use strong passwords, and identify potential security risks. A well-informed team serves as the first line of defence against cyber adversaries.
Ensure your training addresses these common security issues:

1. Phishing attacks: Deceptive tactics to trick victims into sharing sensitive information or deploying harmful software.

2. Malware attacks: Cyber threats involving malicious software executing unauthorized actions.

3. Ransomware: Malicious software designed to deny access to files, demanding a ransom for decryption.

Employee Training and Awareness Programs

Acknowledge that your employees are not just integral to your business—they are the first line of defence against cyber threats. Regular training and awareness programs inform your team about the latest cyber threats and preventive measures. Cultivate a culture of cybersecurity awareness where every team member actively contributes to the protection of your business.

Strengthening Your Digital Shield

Crafting an impenetrable shield for your small business involves developing good cybersecurity habits through daily practices:

1. Regular Software Updates: Keep all software, including operating systems and security applications, up-to-date to patch vulnerabilities.

2. Security Audits: Conduct routine security audits to identify and rectify potential weaknesses in your systems.

3. Password Policies: Enforce strong password policies, promoting the use of complex, unique passwords.

4. Require long, varied passwords for sensitive accounts.

5. Enable two-factor authentication for added security.

Invest in Cybersecurity Technology

As cyber threats advance, upgrading defences is crucial. Invest in state-of-the-art cybersecurity tools like antivirus software, firewalls, and intrusion detection systems to serve as your digital guardians, actively monitoring and thwarting potential threats.

Proactive Preparedness

Craft a comprehensive incident response plan that includes:

1. Communication Protocols: Clearly define communication channels during a cyber incident.

2. Data Backup Strategies: Regularly back up critical data to minimize the impact of potential data loss.

3. Mitigation Steps: Establish procedures to mitigate potential damage during and after a cyberattack.

The Stakes Are High

In 2023, small businesses accounted for a significant portion of annual cyber attacks, emphasizing the need to view cybersecurity not as an expense but as an investment. Cybersecurity is not a luxury—it's a prerequisite for sustainable success. As you navigate the intricate web of business operations in 2024, remember that a secure foundation is key to achieving your goals. Despite the challenges in the digital realm, informed decisions and proactive measures can help your business emerge stronger and more resilient than ever.

The Top 10 Small Business Trends for 2024

As small business owners, anticipating the shifts that shape success is always on your agenda. In the ever-changing business landscape of 2024, specific trends will be crucial to staying relevant and thriving. Let's recap the top 10 trends that should be on your radar for the coming year:

 

1. Tech Integration for Maximum Efficiency:

Small businesses are unlocking the power of technology to streamline operations. From intuitive software to smart automation tools, embracing these innovations can enhance efficiency, trim costs, and keep you at the forefront of your industry.

2. Sustainability and Climate Change:

Sustainability is not just a buzzword; it's a game-changer. Small businesses are discovering the benefits of eco-friendly practices, not only for the environment but also for their bottom line. Going green can set you apart and resonate with conscious consumers.

3. Flexible Work Models:

The 9-to-5 office setup is evolving. Small businesses are embracing flexible work arrangements—remote work, flexible hours, and hybrid models—opening doors to a global talent pool while fostering a healthier work-life balance for your team.  

Related: A shortened workweek: fad or the future of work?

4. Personalized Customer Experiences:

In an era where personalization reigns supreme, small businesses are customizing customer experiences. From targeted marketing to personalized products and services, understanding and meeting individual customer needs are keys to success.

5. Continued Growth of E-commerce:

E-commerce is not slowing down. Small businesses are seizing the opportunity to reach a broader audience, implement targeted marketing, and offer convenient purchasing options. Investing in a robust online presence is no longer a choice—it's a necessity.

6. Prioritizing Mental Health and Well-being:

A healthy work environment is essential. Small businesses are putting employee well-being first, introducing initiatives like employee assistance programs, flexible schedules, and wellness benefits to create a thriving and productive workforce.

7. Digital Marketing, Content Creation, and Artificial Intelligence (AI):

Stay ahead in the digital era by creating valuable content, engaging with customers through social media, and implementing SEO strategies. Integrate AI to streamline content creation processes, adding a layer of innovation to your marketing strategy. 

Related Article: 7 ways how AI empowers small businesses to achieve more in less time

8. Cybersecurity and Data Protection:

In the digital age, safeguarding your business is crucial. Invest in strong cybersecurity to protect sensitive data and maintain customer trust. Shockingly, small businesses, including those with 1,000 or fewer employees, account for 43% of annual cyber attacks in 2023. This data underscores the need for comprehensive cybersecurity strategies to fortify your defence against potential threats.

9. Innovative Payment Solutions:

How we pay is evolving, and your business should evolve with it. Consider offering various payment options, including mobile wallets and contactless payments, to cater to diverse customer preferences.

10. Agile Business Models:

Agility is the cornerstone of success in 2024. Be responsive to market changes, adapt swiftly to challenges, and capitalize on emerging opportunities. Flexibility in operations and decision-making will give your business a competitive edge.

Incorporating these trends into your business strategy isn't just smart; it's the key to staying relevant and successful. Keep these considerations in mind as you navigate the dynamic landscape of 2024.

The Top 10 Small Business Trends for 2024

As small business owners, anticipating the shifts that shape success is always on your agenda. In the ever-changing business landscape of 2024, specific trends will be crucial to staying relevant and thriving. Let's recap the top 10 trends that should be on your radar for the coming year:

 

1. Tech Integration for Maximum Efficiency:

Small businesses are unlocking the power of technology to streamline operations. From intuitive software to smart automation tools, embracing these innovations can enhance efficiency, trim costs, and keep you at the forefront of your industry.

2. Sustainability and Climate Change:

Sustainability is not just a buzzword; it's a game-changer. Small businesses are discovering the benefits of eco-friendly practices, not only for the environment but also for their bottom line. Going green can set you apart and resonate with conscious consumers.

3. Flexible Work Models:

The 9-to-5 office setup is evolving. Small businesses are embracing flexible work arrangements—remote work, flexible hours, and hybrid models—opening doors to a global talent pool while fostering a healthier work-life balance for your team.  

Related: A shortened workweek: fad or the future of work?

4. Personalized Customer Experiences:

In an era where personalization reigns supreme, small businesses are customizing customer experiences. From targeted marketing to personalized products and services, understanding and meeting individual customer needs are keys to success.

5. Continued Growth of E-commerce:

E-commerce is not slowing down. Small businesses are seizing the opportunity to reach a broader audience, implement targeted marketing, and offer convenient purchasing options. Investing in a robust online presence is no longer a choice—it's a necessity.

6. Prioritizing Mental Health and Well-being:

A healthy work environment is essential. Small businesses are putting employee well-being first, introducing initiatives like employee assistance programs, flexible schedules, and wellness benefits to create a thriving and productive workforce.

7. Digital Marketing, Content Creation, and Artificial Intelligence (AI):

Stay ahead in the digital era by creating valuable content, engaging with customers through social media, and implementing SEO strategies. Integrate AI to streamline content creation processes, adding a layer of innovation to your marketing strategy. 

Related Article: 7 ways how AI empowers small businesses to achieve more in less time

8. Cybersecurity and Data Protection:

In the digital age, safeguarding your business is crucial. Invest in strong cybersecurity to protect sensitive data and maintain customer trust. Shockingly, small businesses, including those with 1,000 or fewer employees, account for 43% of annual cyber attacks in 2023. This data underscores the need for comprehensive cybersecurity strategies to fortify your defence against potential threats.

9. Innovative Payment Solutions:

How we pay is evolving, and your business should evolve with it. Consider offering various payment options, including mobile wallets and contactless payments, to cater to diverse customer preferences.

10. Agile Business Models:

Agility is the cornerstone of success in 2024. Be responsive to market changes, adapt swiftly to challenges, and capitalize on emerging opportunities. Flexibility in operations and decision-making will give your business a competitive edge.

 

Incorporating these trends into your business strategy isn't just smart; it's the key to staying relevant and successful. Keep these considerations in mind as you navigate the dynamic landscape of 2024.

Navigating the Holiday Season: 7 Effective Strategies for Small Business Owners to Avoid Burnout

The holiday season, marked by festivities and increased demands, can present unique challenges for small business owners like you. Effectively managing the responsibilities of business operations alongside the personal and professional obligations of the holiday requires thoughtful planning and a dedicated commitment to self-care. Amidst the heightened demands, it is crucial for small business owners to adopt strategic approaches to prevent burnout.

Here are seven effective strategies tailored to help you navigate the holiday season with resilience and success:

Prioritize Self-Care:

Lay the groundwork for a successful and fulfilling holiday season by prioritizing self-care. It is common for business owners to prioritize their business needs over personal well-being. However, neglecting self-care can lead to burnout, impacting both personal and professional realms. Allocate time for breaks, ensure adequate sleep, and engage in activities promoting joy and relaxation. By attending to your physical and mental health, you fortify yourself to handle the additional stress accompanying the holiday rush.

Delegate Responsibilities:

Acknowledge the transformative power of delegation in averting burnout during the holiday season. Recognize that you need not shoulder every responsibility single-handedly. Delegate tasks to capable team members or contemplate hiring temporary assistance during peak periods. Effective delegation not only prevents burnout but also empowers the team, fostering a collaborative work environment where collective contributions drive shared success.

Plan and Set Boundaries:

Creating a comprehensive plan for the holiday season is crucial. Outline key deadlines, events, and promotions well in advance. Clearly communicate operating hours, response times, and any alterations to policies during the holiday season. Setting boundaries manages expectations for both you and your team, fostering an organized and controlled work environment. Meticulous planning reduces stress and minimizes the risk of burnout, providing a structured roadmap for surmounting festive challenges.

Embrace Technology and Automation:

Leveraging technology is a strategic approach to streamline processes and minimize the risk of burnout. Explore tools such as e-commerce platforms, CRM systems, and social media scheduling tools. Automation of routine tasks not only saves time but also diminishes the likelihood of errors. Embracing technology allows you to redirect focus towards strategic facets of operations, ensuring a smoother and more efficient holiday season.

Celebrate Achievements:

Recognize the combined hard work and dedication invested by both you and your team. This acknowledgment serves as a catalyst for cultivating a positive and motivated work environment. Embracing the celebration of milestones, no matter how modest, acts as a powerful remedy against burnout by reaffirming the positive influence of collaborative endeavors.

Establish Realistic Goals:

Setting realistic goals stands as a pivotal component of successful holiday season navigation. Extend goal-setting beyond financial targets to encompass metrics like customer engagement and social media following. Align goals with seasonal milestones, enhancing strategic planning. Learning from experiences during the holiday season contributes to more informed and effective planning for future festive periods.

Foster a Supportive Work Environment:

Cultivate a work environment characterized by support and collaboration to ward off burnout. Prioritize open communication, ensuring team members feel valued and heard. Emphasize teamwork and mutual support, especially during bustling periods. A positive workplace culture enhances resilience, enabling you and your team to navigate challenges with a sense of camaraderie.

By implementing these strategies, you'll not only navigate the holiday season successfully but also maintain a healthy work-life equilibrium for yourself and your business.

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