Here are a few things to “check off” before you approach potential financial partners:


  • Ensure that your business plan meets the needs of potential financial partners. Often times, entrepreneurs will develop a business plan, but not structure it in a manner that meets the needs of early stage financial partners. Ensure that you have covered all of the relevant categories by reviewing business plan tips and templates that are available on the websites of most financial institutions. Financial partners have specific needs when it comes to early stage businesses, so make sure that you understand what they are to ensure that your business plan covers all of the bases. If you know someone who has experience with business plans and financing, it can be helpful to have them read and critique your plan in advance of approaching a potential financial partner.
  • Cash is king. Potential financial partners are particularly concerned about the estimated cash flow of a new business venture, as they are being approached to lend money to the company. As a result, it is important to develop a realistic financial projection that includes an Income Statement, Balance Sheet, Cash Flow Statement, and assumptions to support the projection so that potential financial partners can understand the amount of cash that the business will generate and when. This will help to determine whether or not repayment can be made in accordance with lending guidelines.
  • Do the math in advance. You will want to have a good understanding of your business’ cash flow as well, so that you can ensure that it will generate a sufficient amount of money to meet your personal income requirements. Will your business be your sole source of income, or are there other sources of income that could help to offset cash shortfalls during the business start-up stage? Also, how long do you expect it will take for your business to generate sufficient cash flow to cover its expenditures? If it is a relatively short period of time (i.e., less than one year), you might be able to get by with a small line of credit; however, if the time period is longer and the dollar amounts are more significant, obtaining a loan in the absence of cash flow to support repayment could be a challenge. The specifics can vary significantly, depending on the type and size of the business, so take the time to run the numbers and consider your options.
  • Look into grant and business start funding. Since it typically takes a period of time for new businesses to generate sufficient cash flow to support loan repayment, there are often various business start-up programs and grant opportunities available to assist entrepreneurs in getting their ventures off the ground. Your provincial government’s website should provide information about the programs in your area (don’t forget to check federal and civic websites too!) that might help you to bridge the gap in the start-up phase prior to cash being generated from operations.
  • Consider financial partners with more flexible repayment terms. Banks and other financial institutions certainly have a role to play in supporting our business economy, but their guidelines may limit what they can provide to businesses in the start-up stage, particularly due to their lack of track record (i.e., level of risk) and cash flow. You may be aware of investors who have an interest in helping young businesses get started; they are sometimes called “angel” investors. If you do choose to investigate this option, be sure to seek out the necessary expertise to help you to understand and cover all of the important details, especially from an investment and a legal perspective.


This is an exciting time, so try to balance the ups and downs with good information. Seek out other entrepreneurs in your area as well, to get a sense of how they were able to get their business started from a financial perspective. Learn from their experiences (both good and bad) where you can.

A business advisor known for her practical and solution-based approach, Jenifer Bartman assists companies in transition, including early stage, financing, growth, and succession/sale of business. Her areas of expertise include strategic and business planning, financing readiness, executive coaching, marketing, and succession plan development and implementation.