Financing

Although you may have the desire to go into business for yourself you may be wondering how to finance a venture such as getting into a franchise operation. You may have limited finances but do not give up just yet. This document contains some suggestions about some of the ways you can come up with the financial resources. Remember that when starting the business you need money to live on while you establish your client base, some additional funds for your initial advertising and marketing campaign, and enough money to cover your gas, telephone and administrative expenses. If you are going to incorporate, which is not necessary, that will add a good thousand dollars or more.

You will need around $20,000 to get going. $15,000 for the initial fee and roughly another $5000 for other startup costs.

• You must be of good character.
• You should not have declared bankruptcy before or had a bad credit history. If you have, this may prove to be a difficulty when applying at certain institutions.
• You will need to prepare a business plan. There are many software products available that will help you do this, as well as a template that we will send you when requesting the second information pack.
• You must be qualified. If you are going to go into business you must show that you have the skills to succeed. MCSE, A+ or other recognized technical certification will help you with your case and may even qualify you for certain loan programs.
• You must be determined to succeed at the business and have that desire to do whatever it takes to build your own business. Persistence and perseverance are a necessity.

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This is the preferred way to go into a small business. If you have the financing yourself you will obviously save on the interest you pay to borrow money. If you are just leaving college or University you may be able to sell your business plan to your parents and get some help from them.

Your own bank may be able to offer you several types of loans. These can be at fixed rate or variable rates and usually are from one-year to three-year terms. If your own your home and your spouse works you may be able to obtain a line of credit. To obtain a loan you should talk to your bank manager or the loans officer and take your business plan with you. Arrangements and liabilities are between you and the bank and do not involve Computer Troubleshooters Ltd.

Credit Card

Franchise fees or balance of franchise fees may be accepted on a Visa or MasterCard if your credit limit allows and authorization is approved. This is not a recommended approach because of the high interest rates charged by the credit card companies. It will only be considered as a stop gap measure to bridge financing from another source.

Through the Business Development Bank the federal government provides loans to individuals that qualify for certain programs. To check this out, go to the BDC website at www.bdc.ca., select Products and Services, then BDC Financing. The most likely program that you may use is the Young Entrepreneur Financing Program. The Young Entrepreneur Financing Program is aimed at giving start-up entrepreneurs between the ages of 18 and 34 a solid foundation to build a new business. Term financing of up to $25,000 and 50 hours of tailor-made business management support help to ensure that entrepreneurs with commercially viable business proposals and excellent potential get their businesses off the ground.

Examine the website and if you think you qualify contact your local BDC, which is listed on the same site. Select Local Info on the menu and go from there. Arrange an appointment and take your business plan with you.

This is a personal arrangement between you and the bank. Computer Troubleshooters Ltd. will not co-sign or be guarantor of your loan.

Industry Canada has a comprehensive site targeting those that are considering new business ventures. At http://strategis.ic.gc.ca/sources-f you will find an extensive directory of Canadian financial providers, a powerful search engine of financial providers, information on different types of financing and financial providers, and tips to help you secure financing.

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Last modified: September 10, 2003