Banking and Finance

There are generally three main financing options that businesses in Canada can choose from to raise capital:

  • Debt Financing
    Funding that comes from loans or other investments made to a company from a bank or other external financial source.  Such loans are usually prearranged with scheduled repayment schedules.  Debt financing is so named because it places the company in a debt situation until such time as the loans are repaid.
     
  • Equity Financing
    This type of financing comes from personal funds that are made available for a company.  Such funds typically do not have any claim over company assets, allowing such assets to be used as collateral for any debt financing that needs to be secured.
  • Government Financing
    Funding that is provided by a government agency, usually in the form of grant or other financial assistance programs for specific business projects or for particular businesses operating in certain industry sectors.

For additional information about sources of financing and links to valuable references about investing and doing business in Canada, see:

Date Updated: May 27, 2008
RDP-982