Q: What are the sources of financing available to entrepreneurs who are starting up?

Series: Questions & Answers

19 December 2018

A personal investment is often a must when it comes to financing your new business, but it’s rarely enough. Bank loans are not always the perfect solution either. So, what are the other sources of financing available to support future entrepreneurs? Manaf Bouchentouf, executive director, HEC Montréal shares a few useful examples to help you make an educated decision:

Bursaries and contests

In Quebec, there is an impressive selection of contests and bursary programs organized by institutions and organizations to help entrepreneurs develop their projects: the OSEntreprendre Challenge, honorary bursaries from the Ministry of Economy, Science and Innovation, and several cash prize contests. The money awarded based on specific criteria, has allowed certain entrepreneurs to navigate their projects for a period ranging from a few months to a year. Whether it’s with a sum of $10,000, $20,000, or $30,000, young companies find themselves with enough funds for the year, and this, without taking into account the other sources of financing they have at their disposal.

Municipal and government investments

The Fonds de développement des territoires (FDT) brings support to regions, by generating economic spin-offs, and mobilizing parties to contribute to the rise of entrepreneurship in different cities within the province. PME MTL does their part in supporting businesses at every stage of development—including the startup process—by delivering a network of financing and support experts, loans and grants, and advisory services. When it comes to government loans, the Business Development Bank of Canada (BDC) can lend up to $100,000 to a new business. In addition, Futurpreneur presents financing and mentorship opportunities for young entrepreneurs.

Honorary loans

The accelerator program at the Institute for Entrepreneurship National Bank– HEC Montréal awards cash prizes of up to $50,000 for entrepreneurs supported by startup incubators. They also provide honorary loans, which are not to be mistaken for bursaries, they are simply loans that don’t require personal collateral. A solution that is frequently utilized to meet financial needs during the startup process, and to entice entrepreneurs to develop their projects in Quebec regions.

Risk capital and angel investors

These consist of important sources of financing in Quebec: investors inject capital in fledgling businesses to help them continue their activities. Anges Québec, for example states “we facilitate strategic networking” and “encourage the improvement of investment-related skills”. They offer financing, mentorship and support by working with many important players in the Quebec entrepreneurial ecosystem (ex: incubators, accelerators).

About the author

Florence Thouin

About Florence Thouin

Community Manager

Florence Thouin has a Bachelor’s degree in Communications (cultural and media production strategies) from the Université du Québec à Montréal. Her interest in the world of social networks stems primarily from her love of people and her communication skills. Her desire to understand others and her altruism have always led her to be in contact with the community developing around her.