Log In
Get Started
EN

Please note that Merchant Growth's Canada Emergency Business Account (CEBA) Refinancing Program has now ended and the forgiveness incentive deadline has now passed. Businesses who have not yet paid back their CEBA loans have until December 31, 2026 to do so.

 

The pandemic brought about a great deal of uncertainty and stress, particularly for small business owners in Canada. Luckily, the Canadian Emergency Business Account (CEBA) program provided some relief and stability during those exceptionally challenging times.

On December 4, 2020, business owners were granted an increase on their original $40,000 CEBA loan. They received an additional $20,000. Now that the loan is coming due soon, the federal government is providing a further economic benefit to small businesses; a loan forgiveness benefit of up to 33% of the loan - so long as it’s paid back by March 28, 2024 for businesses that previously made a refinancing attempt with the financial institution that provided their CEBA loan by January 18, 2024.

The question now is: How can small business owners repay their CEBA loan with little cash on hand or limited ability to borrow?

Merchant Growth financial experts provide a breakdown of the CEBA loan, its forgiveness benefit, and how you can repay the loan with the help of our CEBA Refinance program.

What is the Canada Emergency Business Account (CEBA) Program?

In the first year of the pandemic, the government of Canada enacted a COVID-19 Economic Response Plan that provided over 750,000 Canadian businesses with interest-free loans through the CEBA program. The purpose of CEBA was to provide eligible businesses with the means to pay for:

In October 2020, the government announced that it was joining forces with Export Development Canada (EDC) and financial institutions to expand the program to allow for an interest-free CEBA loan amount of $20,000 with loan forgiveness.

CEBA Loan Repayment Terms

Before jumping into repaying the loan, it’s important to review the terms. Businesses who received a $40,000 (or $60,000 CEBA loan with the additional $20,000) and who repay the balance by March 28, 2024 (as long as they made a refinancing attempt with the financial institution that provided their CEBA loan by January 18, 2024) will gain loan forgiveness of up to 33%.

Each CEBA loan has a forgiveness amount based on the total amount a small business received ($40,000 or $60,000):

Note that as of January 19, 2024, there is a 5% annual interest charged to the remaining balance. Only interest payments are required to be paid monthly, with the outstanding principal due by December 31, 2026. Businesses looking to take advantage of the March 28th extension are still responsible for paying interest.

Making the CEBA loan repayment may be difficult for your small business, depending on how things go during this unique and uncertain time. If that’s the case, Merchant Growth can create a structured and customized payment plan to help you pay off your CEBA loan amount by the March 28th deadline, thereby benefiting from the forgiveness program

Options for Repaying a CEBA Loan

If a small business owner would like to repay their CEBA loans, there are a few different routes that can be taken. In all cases to qualify for the forgiveness extension businesses have to have made a refinancing attempt with the institution that holds their CEBA loan by January 18th.

Use Available Funds

For businesses that have the available funds to pay back their loan, this is certainly an option. However, given the value of the amount that needs to be repaid, this could cause a significant shortfall to the business’ cash flow, that could otherwise be used for other business expenses.

Use a Traditional Financial Institution

While this may be a good fit for certain small business owners, given the overall volume of small business owners who need to pay back the loans, and the corresponding surge in demand, while some businesses were able to secure refinancing via a bank prior to January 18th, there remains a large volume of businesses unable to secure funds this way. Banks still have more rigid eligibility requirements as they do with other types of business financing, and they simply were not be able to approve or fund all applicants.

Use an Alternative Lender

Refinancing your CEBA loan with a company such as Merchant Growth allows you to take advantage of the forgiveness program, in particular for businesses that were unable to secure bank funding, all while avoid the long waiting times from the banks for a credit decision when it comes to applying and receiving funds.

Merchant Growth's CEBA Refi Program: Here to Support Businesses

At Merchant Growth, our goal is to help as many businesses as we can take advantage of the forgiveness incentive. Because we understand that the $20,000 forgiveness incentive can have a real impact on the longterm success of a business, in particular those that operate with thin margins.

That's why we've been regular advocates for awareness for non-bank lenders to ensure businesses are aware of al the options available to them, in particular with $20K on the line and a strict deadline last approaching. We've already been able to support thousands of businesses ensure they do not miss out on the forgiveness incentive, and for those that are eligible for the deadline extension, we invite you to get in touch and take advance of the savings being offered by the government.

Learn more about the experience of businesses's that have refinanced their CEBA loan with us.

The Merchant Growth Experience

At Merchant Growth, we believe that getting funding should not take away from actually running your business, and this is a principle that is also fundamental to our CEBA Refinancing program.

That’s why we offer a fully self-served, online application where you can fill out your personal and business information, confirm your identity, and be presented with the offers available to you all in a single process. However, should you have any questions, concerns, or issues come up as you are applying, our team is here to help you.

If you’re ready to move ahead with applying, to have the process go as smoothly as possible you should have the following information on hand:

During the application process you’ll be presented with three different offers that you can choose from that best meet your needs.

Join Merchant Growth's CEBA Refinance Program

Eligible CEBA small businesses can apply for our CEBA Refinance program, aka “CEBA Refi”. It lets you:

Contact us to learn more!

As a small business owner, one of the most significant challenges you may face is securing financing. Luckily, there are various financing options available, one of which is a business line of credit. In this blog, we will discuss what a business line of credit is, the types of business lines of credit, how to apply for one, and its uses and advantages.

Types of Business Lines of Credit

A business line of credit (LOC) is a financing option that allows small business owners to access a predetermined credit limit, which they can draw on as needed. There are two types of business lines of credit: secured and unsecured.

Secured Line of Credit

A secured line of credit requires the borrower to provide collateral to secure the loan. This collateral could be anything from inventory to property or equipment. Because there is collateral involved, a secured business line of credit typically has lower interest rates than unsecured lines of credit. However, if the borrower defaults on the loan, the lender can seize the collateral to recover their losses.

Unsecured Line of Credit

An unsecured line of credit does not require collateral to secure the loan. Instead, the borrower's creditworthiness and business finances determine the credit limit and interest rate. An unsecured business line of credit typically has higher interest rates than secured lines of credit because the lender is taking on more risk.

Business Term Loan vs. Business Line of Credit

A business term loan is a lump sum of money that a borrower repays over a set period. On the other hand, a business line of credit allows borrowers to access funds as needed, up to their credit limit, and only pay interest on the amount borrowed.

A business term loan is ideal for long-term investments, such as buying real estate or equipment, while a business line of credit is better suited for short-term business cash flow needs, such as inventory purchases or managing accounts receivable.

When Should a Business Consider a LOC?

A small business line of credit can be a lifeline for companies in need of short-term working capital or facing seasonal fluctuations in cash flow. For businesses with seasonal patterns, a line of credit can help manage cash flow during the off-season and ensure operations continue to run smoothly. Also, if unexpected expenses arise or time-sensitive business opportunities present themselves, a line of credit can be a flexible financing option to access funds quickly.

A business line of credit can provide the necessary working capital to bridge gaps between receivables and payables, help purchase inventory, or meet payroll needs. It can also help build your business credit score and demonstrate to lenders that you are a reliable borrower. For these reasons, a line of credit is a valuable tool for small businesses looking to navigate financial challenges and take advantage of opportunities for growth.

Who Offers Business Lines of Credit?

Banks and credit unions are traditional sources of business lines of credit. However, online lenders, like Merchant Growth have become increasingly popular in recent years. These lenders offer a streamlined business line of credit application process, making it quicker and easier for small businesses to access the funds they need to succeed.

How To Apply for a Line of Credit

To apply for a business line of credit, you need to provide information about your business financials, such as revenue and expenses. Lenders generally will also want to review your credit score and history to determine your creditworthiness.

If you are applying for an unsecured line of credit, the lender may require a personal guarantee from you, the business owner. This guarantee means that you are personally responsible for repaying the loan if the business is unable to.

To improve your chances of being approved for a line of credit, make sure you have a solid business plan and financial projections. You should also work on improving your credit score and history, paying off any outstanding debts, and reducing your debt-to-income ratio.

Want to learn more about how to get approved for a line of credit? We provide all the information you need to get approved.

What You Need to Know Before Opening a Line of Credit

Before opening a line of credit, you should understand the terms and conditions of the loan. This includes the interest rate, repayment schedule, and any fees associated with the loan. You should also be aware of any penalties for late payments or exceeding your credit limit. Make sure you read the fine print carefully and ask questions if you don't understand something.

Another important consideration is to avoid borrowing more than you can afford to repay. A line of credit can be a valuable tool for managing the cash flow in your business bank account, but it can also become a financial burden if you borrow too much and can't make the payments.

How To Keep Your LOC

To keep your line of credit, you must make your payments on time and stay within your credit limit. Late payments can negatively impact your credit score and result in additional fees and penalties. If you find that you're struggling to make payments, contact your lender right away to discuss your options.

It's also important to use your line of credit wisely. Avoid using it to pay for personal expenses or to make long-term investments. Instead, use it for short-term cash flow needs or to take advantage of time-sensitive business opportunities.

Tips for Using Your Business Line of Credit

Here are some tips for using your business line of credit:

  1. Keep your credit utilization ratio low: Your credit utilization ratio is the amount of credit you've used compared to your credit limit. To maintain a good credit score and keep your line of credit, aim to generally keep your credit utilization ratio below 30%.
  2. Plan for repayments: When you borrow from your line of credit, make sure you have a plan to repay it. Set aside funds to make payments and avoid using your line of credit for expenses you can't afford to repay.
  3. Use it for short-term needs: A line of credit is designed to help with short-term cash flow needs, not long-term investments. Use it wisely to avoid getting into debt.
  4. Keep your lender informed: If your business experiences any changes, such as a drop in revenue or unexpected expenses, let your lender know as soon as possible. They may be able to work with you to find an updated agreement or arrangement that works for both parties.

Uses for Your Business Line of Credit

A business line of credit can be used for various business expenses, including:

  1. Inventory purchases: One of the most common uses of a business line of credit is to purchase inventory. This can be especially helpful for businesses that experience seasonal fluctuations in demand, allowing them to purchase inventory when it is needed most, without tying up too much capital during slower periods.
  2. Payroll: Maintaining steady cash flow can be a challenge for many businesses, particularly when it comes to managing payroll. A line of credit can be used to ensure timely payment of employee wages, even during times when cash reserves are low.
  3. Marketing campaigns: Marketing campaigns can be expensive, and the costs can add up quickly. A business line of credit can help fund promotional efforts, such as advertising or social media campaigns, without putting a strain on your business's finances.
  4. Equipment purchases: Purchasing new equipment or upgrading existing machinery can be a significant expense for many businesses. A line of credit can help you invest in the necessary equipment to improve efficiency, increase production, and drive growth.
  5. Rent or lease payments: Rent or lease payments are fixed expenses that businesses must budget for each month. A line of credit can be used to cover these costs if there is a temporary cash flow shortage or unexpected expenses arise.
  6. Accounts receivable management: Managing accounts receivable is essential for any business to maintain steady cash flow. A business line of credit can help bridge the gap between the time you invoice your clients and when you receive payment, allowing you to manage your cash flow more effectively.

Advantages of a Business Line of Credit

There are three primary advantages of a business line of credit:

Flexibility

A line of credit allows you to access funds as needed, up to your credit limit. This can be especially helpful for managing cash flow during slow seasons or taking advantage of time-sensitive business opportunities.

In addition to providing businesses with quick access to cash, a business line of credit also allows them to manage cash flow more efficiently. Since funds are available as needed, businesses can use the line of credit to cover unexpected expenses, such as emergency repairs or unforeseen payroll costs. This can help to maintain business operations and prevent disruptions in cash flow.

The ability to draw on a line of credit quickly can be crucial when taking advantage of time-sensitive business opportunities. By having funds available when needed, businesses can act quickly and make the most of opportunities as they arise. The flexibility provided by a business line of credit is an invaluable tool for managing finances and keeping businesses running smoothly.

Lower Interest Rates and Fees

In general, business lines of credit tend to have lower interest rates than business credit cards and some other methods of financing. The reason for this is that lines of credit are typically secured by collateral, while credit cards are unsecured, meaning they carry more risk for lenders.

Credit cards also often come with additional fees, such as annual fees or transaction fees, which can add to the overall cost of borrowing. However, it's important to note that interest rates and fees can vary depending on the lender and the specific terms of the line of credit or credit card. Therefore, it's important to compare the rates and fees of different financing options before deciding which one is right for your business.

Improved Credit Score

Another benefit of using a business credit line is that it can help improve your credit score if you make timely payments. This is because your credit score is determined by your credit history, including your payment history. By making timely payments on your line of credit, you can demonstrate to lenders that you are a responsible borrower, which can increase your chances of credit approval for other forms of financing in the future, such as loans or credit cards. Additionally, having a good credit score can help you secure better interest rates and terms on future financing.

Merchant Growth is Your Go-to Source for Business Financing

If you're a small business owner in need of financing, Merchant Growth can help. We offer a variety of financing options, including business lines of credit, fixed financing, and more. Our online application process is fast and easy, and our team is here to help you every step of the way.

A business line of credit is a valuable financing tool that can help small businesses manage their cash flow and take advantage of time-sensitive opportunities. Before opening a line of credit, make sure you understand the terms and conditions, use it wisely, and make payments on time to keep your credit in good standing. And remember, Merchant Growth is here to help with all your business financing needs!

Starting a small business often requires taking on debt. Whether it's borrowing money to purchase inventory, equipment, or real estate, or using credit cards to cover operating expenses, debt can be a valuable tool for growing and improving a business. However, not all debt is created equal, and it's important for small business owners to understand the differences between good debt and bad debt.

In this blog post, we'll explore the key distinctions between the two, as well as provide practical advice on how to make sure you're making good debt choices and minimizing your company's bad debt. By the end of this post, you'll have a better understanding of how to navigate debt in your own business and make informed decisions that support your financial goals.

Bad Debt vs. Good Debt: What's the Difference?

Debt can be either good or bad depending on the type of debt and how it is used. Good debt is generally an investment that increases the future net value of the business and your future net worth, while bad debt is a liability that can damage the financial health of the business. Let's take a closer look at what differentiates the two.

Good Debt

Good debt is a type of debt that is used to finance investments that will increase the value of the business. These investments can include things like purchasing inventory or equipment, buying real estate, or financing a new project. The key feature of good debt is that it is an investment in the future of the business.

Good debt can provide numerous benefits to small businesses. One of the key advantages of good debt is that it can increase cash flow by financing investments that generate revenue for the business. For example, taking out small business loans to purchase new equipment or expand a product line can help increase revenue and improve the business's overall financial health. This increased cash flow can also allow businesses to take advantage of new growth opportunities that may have otherwise been out of reach.

In addition to increased cash flow, good debt investments can provide stability and growth potential for the business. By making strategic investments in the business's future, such as hiring new employees or investing in new technology, businesses can improve their long-term financial outlook and position themselves for success. Good debt investments can also help businesses weather unexpected financial challenges by providing a cushion of financial stability.

Bad Debt

Bad debt is a type of debt that does not contribute to the growth or financial stability of the business. Instead, it is a liability that reduces the future value of the business. Examples of bad debt include:

The risks of bad debt include:

Ways To Help Make Sure You're Making Good Debt Choices

Now that we've explored the differences between good debt and bad debt, let's dive into some practical advice on how to make better debt investments for your business.

1. Understand Your Financial Situation

Before taking on any debt, it's important to understand your own financial situation. Determine your gross monthly income, current monthly debt payments, and debt-to-income ratio. This will help you determine how much debt you can reasonably afford to take on.

2. Have a Plan for the Funds

It's important to have a clear plan for how the debt will be used and how it

will benefit the business. Will it increase revenue, improve efficiency, or provide long-term growth potential? Having a clear plan will help you determine if the debt is a good investment. WIthout a proper plan in place, funds will still get used, but will not necessarily provide as much value to the business, if they are used with intent.

3. Look for Favorable Terms and Experience

You don't have to settle for the first loan offer you receive. There are a variety of factors small businesses should be on the lookout for such as rates, repayment terms, fees (or lack thereof), reputation of the lender, and customer service experience, which matters insofar as feeling comfortable with the information you received prior to funding and also maintaining an open line of communication with the lender during the repayment process.

4. Maintain a Favorable Payment History

Making on-time payments on your debt is crucial to maintaining a good credit score and accessing favorable financing terms in the future. Make sure to budget for your monthly or daily debt payments and prioritize them in your cash flow plan.

Ways To Get Reduce Bad Debt

If your business has already piled up some bad debt, don't panic. There are steps you can take to get back on track and improve your financial situation.

1. Stop Borrowing More Money

The first step in getting out of bad debt is to stop borrowing more money under similar circumstances. While taking on additional debt may help in the short-term, in the long run this still means a higher overall amount of debt that needs to be paid, in addition to all outstanding accrued interest.

2. Prioritize Debt Repayment

Make a plan to pay off your existing debt as quickly as possible. Focus on paying off the debts with the highest interest rates first, while continuing to make minimum payments on your other debts.

4. Improve Your Cash Flow

Improving your cash flow can help you better manage your debt payments. Consider ways to increase revenue, such as expanding your product offerings or using creative marketing efforts to draw in new clients. You can also look for ways to reduce expenses, such as renegotiating vendor contracts or cutting unnecessary expenses.

Merchant Growth - Financing That Pushes Your Business Forward

Debt can be a valuable tool for growing and improving a small business, but it's important to understand the differences between good debt and bad debt. By making informed decisions about debt and following practical advice on how to manage it, small business owners can use debt to their advantage and achieve their financial goals.

With Merchant Growth, you can access financing for a variety of business needs, including equipment purchases, inventory financing, working capital ,and more. Our various financing options are designed to help businesses overcome short-term challenges and achieve long-term growth. Apply today!

Tabit launches partnership with Lenovo to offer Buy Now, Pay Later to B2B customers in Canada

VANCOUVER, BC, March 14, 2023 /CNW/ - Tabit — Canada’s first B2B Buy-Now-Pay-Later (BNPL) solution offered at point-of-sale, announced today the launch of a new partnership with Lenovo. Lenovo will now offer their business customers Tabit’s BNPL payment method through their Tabit integration.

In partnership with Tabit, Lenovo will now offer terms of up to 12 months to their business buyers, including a 30-day option at 0% interest. A first of its kind in the B2B space in Canada, Tabit and Lenovo are helping small businesses access immediate and fully automated financing at the point of sale. This will help businesses relieve cash flow pressure while benefiting from attractive payment terms and a seamless customer experience.

“Lenovo is thrilled to partner with Tabit in providing Canada’s first B2B Buy-Now-Pay-Later (BNPL) solution offered at point-of-sale”, says Carlo Savino, Lenovo Vice President eCommerce - North and Latin America. “With the world’s widest portfolio of technology products, Lenovo can provide solutions, software, and services that small businesses can leverage to fulfill their potential - now with flexible payment options that allow businesses to invest in technology while managing their cash flow”.

In March of 2022 Tabit conducted a survey in conjunction with Angus Reid Surveys, which found that over half (53%) of Canadian small business owners would consider a financing solution at checkout where payment installments are made over time.

“Through our partnership with Lenovo we are proud to be offering an automated financing option for businesses at the point of sale,” says David Gens, CEO of Tabit. “These past few years have been incredibly volatile, whether it be the effects of the COVID-19 pandemic or turbulence in financial markets, and quick access to financing is paramount in helping small businesses navigate these rapidly changing environments.”

Leveraging Merchant Growth’s data and 12-year history of underwriting small business risk, Tabit eliminates the traditional credit risk faced by suppliers, offering a user-friendly application process that can generate approvals in as little as 30 seconds. The result is a mutually beneficial option for both buyers and sellers of all sizes across multiple industries. Tabit gives small businesses the same advantages as large businesses — helping them improve their cash flow and increase their purchasing power — and makes it easier for sellers to convert sales without taking credit risk.

About Tabit:

Tabit is a B2B Buy-Now-Pay-Later solution powered by Merchant Growth. Tabit was founded in 2021 with the purpose of bringing the consumer buying experience to B2B. Through decades of data and a deep understanding of the borrower and lender landscape, Tabit partners with B2B suppliers to provide small businesses with flexible payment options at point-of-sale and eliminates the risk and expense associated with in-house credit management. Learn more at: https://tabit.ai/

About Lenovo:

Lenovo (HKSE: 992) (ADR: LNVGY) is a US $70 billion revenue global technology powerhouse, ranked #171 in the Fortune Global 500, employing 75,000 people around the world, and serving millions of customers every day in 180 markets. Focused on a bold vision to deliver smarter technology for all, Lenovo has built on its success as the world’s leading PC player by expanding into new growth areas of infrastructure, mobile, solutions and services. This transformation together with Lenovo’s world-changing innovation is building a more inclusive, trustworthy, and sustainable digital society for everyone, everywhere.

About Merchant Growth: 

Merchant Growth is Canada’s fastest and most friendly financier for small businesses. Their innovative approach to small business financing blends thoughtful customer care, complete transparency, and the latest technology, in order to accelerate the growth of small businesses across Canada. Their mission is to bring Canadian business owners the most convenient and accessible financing experience. Learn more at: https://www.merchantgrowth.com/

For further information:

Sean Watkins | Director of Marketing | Merchant Growth | 416.846.6900 | swatkins@merchantgrowth.com

As a small business owner, there are a couple of things that are always good to keep in mind when starting a new year.

A new year brings many challenges and being organized is key to keeping track of all the changes and solutions that need to be established.

Making a checklist is an excellent opportunity to review what you already have and what you might need to update. Here are some things to consider:

Review Your Website

Having an updated website is a must nowadays since almost everyone expects you to have an online presence where they can easily learn more about you.

Creating a website brings multiple benefits to your business such as: crafting your business’s story, showcasing the people behind the brand, and also showing things that can’t be said with words. (such as product demos and virtual tours).

Having an outdated website can discourage customers from contacting you, so it is important for you to make your website both visually attractive and also user-friendly.

Look at your current website and go over everything you have on display. Make sure to update even the smallest details (if needed) such as your contact information, the services you offer, or any new announcements.

Regularly creating content such as blogs, keeps your website fresh and also allows you to provide additional information to potential customers while highlighting your credibility.

If possible, it’s also good to get an outside perspective by asking a trusted person to go through your website and provide feedback on the content, look, and navigation on your site.

It’s always good to update your website at least once a year to make sure that your website is user friendly and that it mirrors your branding. However, when needed, if there are changes throughout the year it’s important to add these as soon as possible. Such as a change in the contact information or product/services offered.

Update Your Social Media Presence

Like having an updated website, an updated social media presence is also important for your business. You don’t have to be on every single platform, but the ones you do have should have the basics. Here are some examples:

If you have a Facebook account, make sure your business name is correctly spelled, your address should be visible and any relevant posts such as updates/announcements.

If you have an Instagram account, make sure to have your business name somewhere (in case your username is not the same), a link to a website if possible, and your address.

Come up with a regular scheduling posting whether that means once or twice a week, or occasionally more when you have additional information to share, or occasionally less when you’re particularly busy running your busy or have no news to share.

With both your website and your social media, it's always a good idea to take a look at what your competitors are doing both to keep tabs on additional opportunities for your own business, and to help you differentiate your business from theirs.

When updating your social media presence it all comes down to your business needs. If you have a consistent posting schedule, you should do this at least once a month.

Manage Your Reviews

Reviews are a crucial tool for small businesses, they can influence others to choose your business over others, so don’t forget about them.

As a business owner creating a Google Business Profile is a powerful tool that increases your online exposure, even if you don’t have a strong social media presence.

Add your business name, current address, industry description, contact information, and hours of operation. You can also link your website and any related social media platforms to redirect customers to them.

As you can see there is a section for reviews, make sure to encourage people to leave a review, but also be mindful by replying to them, even the bad ones.

Some other options to consider are Trustpilot and Yelp. The more online social proof you gather, the better. Customers go online to look for the best choices for them whenever they are looking to purchase a product or a service. Reviews can help establish credibility and build trust with customers, as these are written by real customers who have used the product or service being reviewed.

Reviews not only provide valuable information for your customers, it also provides valuable insights and feedback from customers. You might have a better understanding of how you can improve your offerings and overall customer service.

This is something that should be done as soon as possible. Try setting up alerts so you get notified whenever someone leaves a review. If you have not started yet this is a great opportunity to start the new year by leveraging your business reviews.

Consider Investing in Tech Tools

If you can invest in technology and this makes sense for your business then you should take the opportunity. Think about which processes take longer for you or which ones can be done with the help of online tools to cut down on processing time and possible expenses. Here are some examples to consider:

Project Management Tools

Email Marketing

HR Management and Accounting Management Tools

Data Backup

Website Monitoring

Any tech tool necessities will look different for every business. Some of them will be impossible to ignore and that is when you might think about investing in them. Nonetheless, it’s important to review your business’ performance on a quarterly basis.

Conclusion

As we navigate this new year, it is important for small businesses to prioritize digital strategies. The digital business landscape is constantly evolving, and keeping up with the latest trends and tools is crucial for business growth. Creating a checklist for your small business will help you prioritize the right tools and strategies that will enhance your customer’s experience and help your business succeed.

Contrary to popular belief, the most challenging time for entrepreneurs is not during the initial stages of starting a business, but rather during the process of scaling for growth.
A startup can often recover from initial mistakes, and the hard work of a dedicated few can make up for certain deficiencies; that said, once growth begins to accelerate, entrepreneurs are pressured to secure funding which can prove to be incredibly difficult without proper financial planning. This problem is especially true for startups and smaller companies who might have not done their due diligence when it comes to planning their financing for an expansion.
In this blog we will cover what scaling means and what parts of your business it affects most, when is the right time to scale, and the financing solutions that can help you scale as efficiently as possible.

What Does Scaling Mean Exactly?

Scaling a business refers to the process of converting it from a small entity to one that can viably compete in a larger market. When it comes to scaling, there are three primary areas of your business that are involved: product, marketing, and operations.

Product

Scaling a business requires more than simply increasing the production of your product; you need to do so in a manner that is efficient, cost-effective and predictable. To ensure scalability in this way, you must have established, repeatable processes in place that maximize productivity while maintaining the quality your customer base has come to expect.

Marketing

Creating a comprehensive sales and marketing strategy is integral to achieving the greatest possible reach as you grow within your market or expand into new ones. A smart infrastructure allows for more product visibility and higher profits, which is crucial as you invest more money into your company and as scaling increases your costs.
When it comes to marketing spend, a major pitfall is simply increasingly spending without an actual plan in mind. As your marketing spend increases, you should be not only monitoring the results but also regularly adjusting and expanding your strategy. Do not assume that simply spending more money on exactly the same thing will automatically yield proportional results at a higher scale.

Operations

Having a strong operational strategy, particularly as it pertains to your finance department, is essential for success when you are trying to scale up efficiently. You and/or your team should analyze and consider a variety of factors: everything from your operational costs, customer acquisition costs, your markup, actual customer demand, current processes and even your financial reporting. Factoring in all of these elements and more in order to help you decide what types of funding are most suited to your business and where the funds should be allocated.

Is it the Right Time To Scale Your Business?

Deciding when to scale up a startup or a small business can be a critical turning point. Scaling too early can result in cash flow issues and operational challenges, while scaling too late can result in missed opportunities and increased competition.
The right timing for scaling will depend on several factors, including your company's financial stability, the strength of your product or service offering, and the level of market demand.
One of the key indicators of the right time to scale is when your company has achieved consistent and profitable growth. This shows that your product or service has been well received and that there is a sustainable demand for it. You should also have a strong financial foundation, with stable revenue streams, a positive cash flow, and enough reserves to support the increased expenses that come with scaling.

Finally, it's important to assess the competitive landscape. If there is a large demand for the product or service and there is room for growth, it may be the right time to scale up. However, if the market is becoming crowded and competitive, it may be wise to wait or consider alternative strategies.

Funding Options For Scaling Up

Here are the main funding options the finance function of your company should consider when it comes to raising money to scale your business.

Venture Capitalist

Venture capitalist (VC) funding can be a valuable source of investment for scaling up a small business. VCs provide not only financial support but also business expertise and industry connections. However, it's important to note that VC funding often comes with expectations of high returns and potentially significant ownership stakes in the company. It's important to carefully evaluate whether this type of funding aligns with your business goals and company culture before pursuing it as an option.

Angel Investors

Angel investors can be a great way to fund growth. These individual investors are typically high net worth individuals who are looking to invest in promising startups and emerging businesses. Angel investors can provide funding, advice, and valuable industry connections to help your business grow. Unlike venture capitalists, they often invest smaller amounts and are more flexible with the terms of their investment; yet much like VCs, angel investors often expect ownership stake in your company and significant returns in exchange for their investment.

Grants and Subsidies

The Government of Canada offers a variety of grants and subsidies to support small business growth and development. These programs provide financial assistance to businesses that meet certain eligibility criteria, such as creating jobs, developing new technologies, or contributing to economic growth. But while these grants and subsidies can provide valuable financial support, the application process can be time-consuming and competitive.

Business Line of Credit

A line of credit for small businesses can be a flexible and useful option for funding a scale up. It provides access to a set amount of funds that can be drawn upon as needed, typically with lower interest rates than credit cards. Another advantage is that you are only required to pay interest on the amount you have used, which can be particularly useful for businesses that need to manage cash flow fluctuations or invest in short-term growth.

With Merchant Growth, you can get access to a business line of credit in as little as 24 hours, therefore allowing you to quickly put your scale up business plan to action and seize growth opportunities as they present themselves.

Fixed Financing

Companies looking to scale up should also carefully consider a fixed financing solution. Fixed financing can be a predictable and reliable solution for funding the growth of a small business, as it offers a stable interest rate and set repayment terms. The stability of fixed financing allows your finance teams to produce accurate financial data and projections so that you can more clearly map out your scale up business strategy.

Merchant Growth offers fixed financing with minimal eligibility requirements, which is an important consideration for businesses that are just starting to gain their footing in the marketplace.

Merchant Growth Can Help Take Your Business to the Next Level

Scaling is a watershed moment for many small companies, as the quality of their decisions during this phase often dictates their future. It is therefore important to ensure your business is ready to scale and that you choose the right funding option. With simple and tailored financing solutions, Merchant Growth can help you access the funds your business needs to scale up in a way that is both stable and flexible.

For more information on our diverse financing options, contact us to be connected with a dedicated financing advisor. We're prepared to offer you the most user-friendly and convenient financing experience available as we provide your business with the assistance it needs.

Running a small business is not for the faint of heart. Not only do you have to keep track of money coming in and out, but small business owners also need to be aware of how their personal habits and decisions can affect the success of their venture.

When you're an employee, you are paid regularly and you can use that income however you want. You don't have to worry about how the credit card debt you may have racked up in your personal life will affect your work life; it's completely separate. But if small business owners don't make sound personal financial decisions, they can easily put themselves, and therefore their small business, in dire straits.

While certain companies, such as Merchant Growth, can help with quick small business financing solutions, being aware of the connection between your finances and small business can mean the difference between success and failure. Let’s take a closer look at how your personal spending habits affect your small business.

Issues Bad Spending Habits Can Cause For Your Small Business

Having bad personal spending habits can harm your small business in a number of ways. Here are some of the more detrimental consequences:

Difficulty Obtaining Loans or Credit

High levels of personal debt can severely damage small business owners' credit scores and leave them unable to access loans or other forms of credit. With a deteriorated credit score, lenders would likely perceive small business owners as high-risk borrowers and be less willing to offer loans or lines of credit, meaning small businesses may not have the funding they need to stay afloat and succeed. This is particularly true for traditional financial institutions who have much more rigid criteria when applying for small business loans.

Cash Flow Issues

As a small business, it is essential to be prepared for any unexpected events that occur such as employee resignations, equipment failures, and natural disasters. Without the proper preparation, sudden financial difficulties can set your small business back significantly and potentially even cause it to go into unmanageable levels of debt. While there are certain business factors that may affect cash flow such as inventory purchases, delays in receivables, or payment only upon completion of a project, poor personal spending habits exacerbate the impact of these unforeseen expenses and put your company at risk of going under.

Limited Growth Potential

Bad personal spending habits can be an Achilles heel for small business owners, as ill-advised financial decisions often use up resources that the business needs to succeed in today's competitive marketplace. When small business owners do not manage their money carefully, it can limit their capacity to invest in areas that will help the business grow and expand. Mismanaging funds might be the difference between being able to seize an opportunity that pushes the business forward and being left behind as what is required for success in your industry evolves.

Loss of Focus and Reduced Productivity

Poor personal spending habits can wreak havoc on a small business. Unstable spending can place you in a position of financial distress that over time takes its toll on your mental and physical health. Increased stress and anxiety, combined with the pressure that comes with being a business owner, does not bode well for the business itself. Businesses reflect those who own and manage them, and if your poor money habits are causing you undue stress, it will show in the performance of your small business. Unlike your personal spending habits which only affect you and potentially your family, as a small business owner you are also responsible for your employees financial wellbeing when it comes to salaries being paid in full, and in a timely manner.

Good Financial Habits You Can Work on Building

Although poor spending habits can have serious consequences for your business, the silver lining is that these habits can be changed. Here are some positive financial habits you can build to put your small business in a position to succeed.

Creating a Budget

Having a budget for your small business is essential to it running smoothly. Budgeting offers small business owners the ability to plan and track where they are investing their funds while ensuring that all bills are paid on time, a habit that will help boost your credit score.

Creating a budget also allows you to identify any unnecessary expenditures, so you can make the necessary changes and save more money with cost-effective alternatives. By developing and sticking to a budget, small business owners can stay on top of their finances and maximize the use of the resources they have available.

Building an Emergency Fund

Setting aside money for unexpected expenses is an important element of small business success. Having a dedicated emergency fund can help you handle whatever financial issues may arise, be it an employee quitting, small scale repairs to equipment, or any number of other small scale disasters that can ruin cash flow. Having an emergency fund stashed in a savings account will help you avoid having to turn to costly loans and lines of credit to cover unforeseen expenses, allowing you to turn to these financing options when you are ready.

Keeping Business and Personal Finances Separate

Running a small business means keeping track of a lot of details and commitments. One of the key elements to staying on top of all your finances is to keep your business and personal finances separate.

Not only will this help you stay organized, but it also makes it easier to track expenditures and monitor your small business expenses. Separating personal and business finances will help you get in the habit of investing profits back in the business as well, which will help your business grow in the long run.

Seeking Professional Advice

As a small business owner, it is in your best interest to consult with a professional financial advisor or accountant to ensure that you have reliable guidance and support to make informed decisions about your finances. Doing so can help you develop strong financial strategies that are tailored to your business goals and financial objectives. You will be better equipped to make decisions regarding:

Ultimately, consulting with a professional financial advisor or accountant can make all of the difference when it comes to setting your small business on the path to success.

Merchant Growth Can Help Fund Your Small Business

Whether you need funding because your small business has come up on tough times or because your small business is thriving and needs to grow, Merchant Growth offers a variety of small business financing options such as fixed financing or e-commerce financing. With minimum eligibility requirements, it's easy to secure financing and get your small business moving in the right direction. Get started today!

Merchant Growth Ltd. Acquires Lendified Inc.

VANCOUVER, BC, Jan. 19, 2023 /CNW/ - Merchant Growth Ltd. ("Merchant Growth"), together with its funding vehicle, Merchant Opportunities Fund Limited Partnership, is pleased to announce the acquisition of substantially all of the assets of Lendified Inc. ("Lendified").

Lendified has been supporting small businesses across Canada to finance their working capital needs since 2015. Lendified shares Merchant Growth's philosophy of open disclosure and a strong customer relationship management ethos.

David Gens, Founder & CEO of Merchant Growth notes: "We look forward to welcoming each and every Lendified customer to Merchant Growth, and we are committed to serving our new customers for the long term".

About Merchant Growth

Merchant Growth is a leading Canadian financial technology company that specializes in small business financing. Over the past decade, Merchant Growth has supported Canadian businesses with hundreds of millions of dollars in growth financing. Using an innovative approach that includes the latest technology, complete transparency and thoughtful customer care, Merchant Growth is committed to helping make business financing easy to understand and accessible. To learn more, visit: www.merchantgrowth.com.

SOURCE Merchant Growth

For further information: Sean Watkins | VP of Marketing | Merchant Growth | 416.846.6900 | swatkins@merchantgrowth.com

When a small business is in need of financial assistance to cover its costs or grow in its market, choosing between a business line of credit (LOC) and a business credit card is an important decision.

A line of credit, also known as a revolving credit facility, is a borrowing arrangement in which a bank, credit union or other lender, agrees to extend a maximum amount of credit to a borrower, who can then draw on that credit as needed. On the other hand, a business credit card is specifically designed for business owners to use for business expenses. Like a personal credit card, a business credit card allows you to borrow money up to a certain limit, which you can then pay back over time.

Due to the flexibility they afford, both of these shorter-term financing methods can be helpful for businesses. However, their specific pros and cons make them more suited to certain circumstances. In this blog, we take a closer look at the potential benefits of credit lines and credit cards can provide for your business.

Advantages of a Line of Credit

A business credit line offers several noteworthy benefits.

Flexibility

With flexibility at its core, a credit line allows you to use as much or as little of the available credit as you need and only pay interest on the amount that is actually used, not the total amount. Also, unlike a personal loan, which is typically used for a single major purchase, a revolving credit facility can be reused as long as the drawdown is repaid.

Quick Approval

Normally, when comparing a line of credit to a credit card, one thing that counts against the line of credit is its approval time. With a traditional financial institution like a bank it usually takes longer to get approved for a LOC than it does to get approved by a credit card issuer. However, with the Merchant Growth line of credit for business, small businesses can get funded in as little as 24 hours, effectively turning this negative into a positive.

With minimum eligibility requirements, Merchant Growth can provide funding on a significantly shorter timeline than a traditional financial institution.

Higher Credit Limit

Innovative lenders, like Merchant Growth, are willing to offer higher credit limits to businesses depending on their size and length of time in business. In fact, while the credit limit of a business credit card generally hovers around $50,000, some lenders offer access to lines of credit worth far more. The greater purchasing power a LOC affords therefore makes it ideal for large business purchases. Many times a business line of credit is used in conjunction with a business credit card, as a way to avoid maxing out credit cards, or providing additional credit once there is not more available on the cards.

Advantages of a Business Credit Card

Like lines of credit, credit cards offer small businesses their own set of benefits.

The Option to Have Multiple Cards

Business credit cards are a great tool for businesses where employees may need to make purchases. Providing multiple users with individual cards within the same company ensures that each employee has access to the resources they need, when they need them.

This means employees no longer have to worry about making the purchase and waiting for reimbursement from the business, so everyone can work quickly and get things done in efficient time frames. Plus all purchases can easily be tracked on the credit card statement.

Rewards and Perks

Business credit cards can be a valuable asset to any business looking to get the most out of its money. Some of the perks credit cards offer include cash rewards for every dollar you spend, travel points, access to exclusive discounts and other rewards. Carefully researching the offerings of different credit cards can ensure your business makes the most out of these rewards programs, allowing you to further lower your operating costs and improve your bottom line.

Minimum Repayment

Credit cards give borrowers the benefit of minimum monthly payments, allowing them to pay off part of their balance right away and carry the remainder forward if needed. This can be a great advantage for businesses that need flexibility in managing their finances. Instead of taxing cash flow with large lump-sum payments each month, minimum repayment enables small business owners to allocate more money towards financing other areas of the business such as inventory or staffing.

Additionally, minimum monthly payments allow businesses to spread repayment into manageable chunks by lowering their debt burden while maintaining access to capital when needed.

Build Credit for your Business

As a business owner, having a good credit score is essential to your success, and effectively using a business credit card is a great way to build up credit for your business. By using your business card correctly and paying the balance off promptly each month, you will be able to increase the standing of your business’s credit score with relative ease.

When Are They Practical to Use?

While many businesses use both a line of credit and a business credit card for their needs, these methods of financing each have circumstances where they are more practical than the other.

For businesses with irregular cash flow, like seasonal businesses, a line of credit is ideal because of the flexibility it affords. Businesses can use as much or as little of the available credit as they need, depending on the situation. A line of credit can also be great for growing businesses or businesses that need to make large purchases due to their higher credit limit.

Credit cards on the other hand, are much more useful for small purchases such as gas or day-to-day pieces of equipment or materials that businesses need. Also, because business credit cards allow for multiple users, they are perfect for small businesses where employees need to make purchases on behalf of the business.

Merchant Growth Provides Tailored Solutions

What comparisons such as these reveal is that there is no one-size-fits-all solution to small business financing. Businesses vary based on their industry, their size, and modes of operation, and therefore, financing options should vary accordingly.

Contact Merchant Growth today, and work with a dedicated financing advisor to find the best solution for your business needs.

chevron-down