Loan Assistance and Debt Solutions for Lethbridge Companies

Getting a business loan in Lethbridge can be challenging. In smaller cities, a lack of local funding sources means that many small and medium-sized companies cannot get access to the capital they need to grow the business. But there are several sources of capital beyond just the bank that many small and medium-sized businesses may not be aware of. Here are some of the more common sources of capital that business owners in Lethbridge and other Canadian cities can leverage:

• Banks - as already mentioned, banks are the most obvious and most frequented source of capital for growing businesses. Unfortunately, the low-risk nature of banks makes many businesses ineligible. This source also comes with strict repayment terms and often requires guarantees to protect the bank should the business default on payments or go bankrupt.
• Private Capital - Like banks, these firms provide capital to small and medium-sized companies with a proven track-record and with plans for growth. But unlike banks, these firms can adapt their terms and conditions of borrowing to meet the specific needs of small and medium-sized businesses. A great example of private capital is mezzanine debt which has a lower cost of borrowing than equity and less stringent terms when compared to bank business loans.
• Public Capital - In the case of public companies, this form of capital comes from selling shares through a North American (or potentially and overseas) stock market. Equity is generally considered to be the most expensive form of capital because investors demand a return of greater than 25%.
• Venture Capital - This is a form of capital usually provided to young growing companies with an innovative new product or service that has the potential to show big returns. Venture capitalists generally demand a very large share of a young company in exchange for several million dollars worth of investment capital.
• Angel Investors - Another form of capital that aims to support new companies. Unlike Venture Capital, Angel investors invest in companies that are in a much earlier stage. And while they may invest less money at this early stage, they generally require much higher returns than any other form of capital to accommodate the extremely high level of risk associated with start-ups and new companies (especially in the technology sector).
• Working Capital - While seemingly obvious, this form of capital can be tapped if a growing company can find ways to decrease costs without decreasing it's revenue stream. Or conversely, a company may find ways to increase its revenue without increasing costs which can provide the capital needed for growth. This is generally very difficult for companies in manufacturing, wholesale and business services so options such as mezzanine debt are often sought out where no cost savings or increased revenue can be found.
• Government Grants - The recent recession saw governments all over the world create a number of grants and funds to help small and medium-sized businesses continue to support the local and national economies. Many of the funds that were created have not yet been exhausted and were designed specifically to help a company grow.
• Government Business Loans - Much like banks, governments often provide loans to small and medium-sized businesses. Government loans can be difficult to obtain at the exact level needed for a business because the government usually places arbitrary caps on the amount of funding a single business can receive and over what time period. The advantage of government business loans is that they may have lower interest rates than bank loans and less stringent repayment terms.

If you need help getting access to capital of getting a business loan, our representatives are available to meet with you on location in Lethbridge.

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