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How to Get a Business Loan in Alberta

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Small businesses are a vital part of Alberta’s economy and employment. In fact, there are over 150,000 small businesses located in the province, with small and medium sized businesses making up the overwhelming majority of businesses in the province. The reality of running a small business, regardless of industry or sector, is the need to access capital. When seeking business loans, Alberta based companies should consider all the options available both public and private, as well as carefully evaluate their particular needs and circumstances.

Whether you’re located in a major city like Calgary or Edmonton, further south in Lethbridge or Medicine Hat, or more north in Fort McMurray, the need for small business funding in Alberta affects all types of businesses. In this blog we will review financing options for businesses located in Alberta, including the different types of financial institutions for getting an Alberta small business loan, different types of financing options, how your business can use these funds, and ultimately address how to get a business loan in Alberta and what you will need

 

 

Small Business Funding Alberta: What are the Options Available?

Alberta business loans come in many different formats, sizes, and with varying terms and conditions. Understanding the options available to you will allow you to put your business in the best position for success when it comes to getting the right loan for you and is prudent financial planning for your business.

Traditional Financial Institutions

For most small businesses, a traditional financial institution such as a bank is the first place that will come to mind during your search for Alberta small business loans. Due to their size, banks can offer lower interest rates which makes them an attractive first consideration for most small business owners seeking financing.

The reality that many will face however is lengthy and drawn-out application processes, more restrictive qualifications and parameters to be met, and long periods of time waiting to hear back about approval. In addition to the time that needs to be set aside to make the appointment with the bank, attending the appointment which will most likely be during business hours that you would normally be better off working at your own small business, and time having to assemble any physical documentation that you would need to bring with you.
Furthermore banks are generally more risk averse, which makes it much more cumbersome to get financing from a traditional financial institution.

Friends & Family

Some businesses will turn to friends and family to try to raise funds. When possible this can be a great option due to lower overall cost and avoidance of any of the frustration one may have to deal with traditional institutions.

However the amount of money you will be able to pool will likely be smaller so if you are seeking a bigger injection of funds, there are limitations, and you may find yourself still needing to source additional capital. Furthermore, working with friends and family may ultimately result in greater frustration in, for example, the terms of timeline to pay back the funds if suddenly someone needs the funds to be returned sooner than initially agreed upon. Combining money and personal relationships can be a great solution for some but can be detrimental to others.

Venture Capital or Angel Investor

For certain small businesses, it can make sense for you to offer a percentage of ownership in exchange for capital. The investor may provide additional expertise or have valuable connections to help with your small business’s growth.

However getting outside investment also comes with its own challenges, the first of which is that you are diluting your ownership of your small business. Secondly, you’ll also have other opinions to consider when making important decisions for your business. Thirdly, as opposed to simply having to pay off the associated amount taken with a loan, you’ll now be paying a portion of your company’s profits to this group or individual indefinitely.

Grants

When it comes to getting funds, grants are a great option to consider. The reason being that the difference between a loan or any type of financing versus a grant, is that you don’t have to pay a grant back.

Small businesses interested in grants should do their due diligence in researching the right grant, both on the provincial and federal level as they come with different conditions. This can include being used for an identified purpose (such as for helping, investing in training of workers to develop additional relevant skills, or for technological development), or they can be intended for a particular industry or to create additional opportunities or support a specific demographic group.

If you’ve been fortunate enough to qualify for a grant, whether to help you at the startup phase of your business, or to help in your growth journey, in most cases the unfortunate reality is that grants are a one-time injection of capital. Once you use it, that’s it. The next time you find yourself needing capital you now find yourself back at square one searching for a solution.

Additionally, the grant process is arguably even more challenging than even banks because of demand for the limited availability of the funds coupled with the competition of all the other Albertan or even Canadian small businesses vying for them.

 

 

Business Loans Alberta: Quick and Simple Financing With Merchant Growth

If you’re not eligible for grants, or simply don’t have the time to apply or wait to hear back from a bank only to get turned down, an online business loan such as one from Merchant Growth may be the right solution for your Alberta small business loan needs.

At Merchant Growth, we work with a wide range of small businesses across many industries.

Term Financing

In your search for Alberta small business loans a Term Financing Solution provides businesses with quick access to capital, between $5K-$800K in as little as 24 hours! Term financing is unrestricted capital, meaning that you can use it for your business’s particular needs for growth.

Similar to conventional bank loans, with Term Financing your small business receives a lump sum upfront, but rather than monthly payments, the balance is paid back through weekly or daily payments. This solution is ideal for businesses with consistent cash flow due to the predictability of repayment which makes it easier to budget for.

Business Line of Credit

A business line of credit is a great solution for small businesses in particular or businesses that need quick access to cash or have irregular business cash flow because it offers the potential for lower interest rates and additional flexibility. A revolving credit facility that allows business owners to borrow money with repayment terms that are flexible, and with business owners only paying interest only on the amount they have borrowed.

The Line of Credit gives small businesses the freedom to access capital when they need it, repay it when they want to, and borrow again. A Line of Credit offers favorable interest rates and you only pay interest on what you withdraw, so minimum monthly payments can be easily budgeted for. And businesses don’t have to worry about maxing out their credit cards.

Business Loans Alberta: Merchant Growth Success Examples

Merchant Growth is proud to serve our small business customers with their financing needs across the country, and that includes businesses located in Alberta and across the country.

Terra Excel Drones

Terra Excel Drones, from Edmonton, Alberta provides a complete assortment of drone services, drone technology, and drone certifications, in addition to selling drones.

They reached out to Merchant Growth in particular due to their need for financing in a timely manner and to help them avoid depleting their available cash flow while keeping up with current demand and simultaneously planning for upcoming projects.

Read more about Terra Excel’s experience working with us.

Aboriginal Choices

Aboriginal Choices offers individualized and supportive assistive programs for children and their families. They are connected to individuals and families that they work with through the Child and Family Services Agency (CFSA) or a Delegated First Nation Agency (DFNA) in Alberta.
Aboriginal Choices sought out financing from Merchant Growth to help cover unforeseen emergency expenses, as well as due to increasing fuel costs. Funding allowed them to remain operational and continue to take on additional contracts.

Read more about Aboriginal Choices’ experience working with us.

 

 

Business Loan Alberta – What Can You Use it For?

Your Alberta small business loan can be used for any needs your business may have. You may have a specific use for the funds in mind, or you may be considering how funds could help you plan for your business’s future or free up your available cash flow in the short term. Some possible uses for Alberta small business loans include:

  • Cash flow: Small business owners have a lot to manage, and require an appropriate amount of cash flow to make that happen. This includes the necessary daily operational costs including funds to pay salaries and cover bills.
  • Expansion: Whether it’s building out your existing location, adding a patio, or opening another location, smart business growth requires capital to make it happen.
  • Purchasing inventory: Prepare for the upcoming season or restock on your business’s number one seller. Having the funds to purchase inventory now can allow you to take advantage of a promotion your distributor may have or simply allow enough time for production and delivery of the goods.
  • Hiring: Add to your team for your busy season or keep up with demand of your growing business operations by adding one or more additional employees.
  • Marketing: Let people know about your business! Whether it’s to get the word out about a special promotion or new product, or simply increase your customer base, or perhaps you’re ready to revamp your dated website or try your hand at social media marketing. Investing in your business’s marketing strategy can help take your business to the next level.
  • Emergency funds: Even businesses that have funds set aside “just in case” may find themselves in a time crunch for capital, whether it’s for repairing damages to a location or replacing equipment.

Small Business Loans Alberta: What To Prepare

As you begin your search for Alberta business loans there are a few things that you should get organized to help streamline the process as much as possible. This could include:

  • Relevant financial statements such as monthly bank statements, major contracts
  • Proof of ownership
  • Lease or deed to any physical spaces you rent or own
  • Tax documents
  • Business plan

Next Steps: Business Loan Alberta

At Merchant Growth, we’re here to make small business funding easy and accessible. When it comes to getting a quick and convenient small business loan in Alberta businesses can get between $5K-$800K in as little as 24h with our simple minimum requirements of being based in Canada, having a monthly revenue of $10K, and being in operation for at least 6 months. Get started with your Alberta small business loan today!

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