1 – We look FIRST at organic growth opportunities , that is, growth naturally created by self-generated revenues, primarily the company’s revenues.

Organic financing, or internal financing, refers to financing methods that come from a company or organization's internal resources. This means that instead of relying on external sources of financing, such as bank loans or investors, the company uses its own profits, assets, or reserves to finance its operations, projects, and expansion.

2 – If these are not enough, we then look at the options of subsidies, sponsorships, and even competitions and scholarships (there is a directory: the Annuaire des Subventions au Québec). You would be surprised to see how many there are!

Grants are funds provided by government agencies, non-profit organizations, foundations, or public or private institutions to individuals or organizations to carry out specific projects. Grants are awarded through calls for proposals and positive responses to these calls. These proposals must describe the project, its objective, its budget, the expected results and the impact on the community or society.

Scholarships can be offered by universities, academic institutions, private organizations or government agencies. There are also specific scholarships for underrepresented groups or particular initiatives.

Sponsorships are forms of funding offered by companies or private organizations to individuals, events, sports teams, or projects that can offer visibility or brand value in exchange. Sponsorships can take different forms, such as sponsoring events, supporting athletes or artists, funding community or social projects, etc. In exchange for the sponsorship, the company can benefit from media exposure, brand visibility, recognition among the community or target audience, and the opportunity to connect with potential consumers.

3 – If self-generated income is insufficient and subsidies are not possible, we look at interest-free or low-interest loan options, offered by governments, the entrepreneurial ecosystem or some banks. Interest-free loans, also known as zero-rate loans or zero-interest loans, are forms of financing where the borrower does not pay any interest on the amount borrowed.

There is of course the possibility of peer-to-peer loans (interest-free loans to friends or family, for example), based on trust and personal relationships, with generally flexible repayment terms.

Furthermore, it is important to note in this section that although interest-free loans do not involve the payment of interest, they may still require repayment of the borrowed capital according to terms agreed between the borrower and the lender.

Here are some other options to evaluate:

Zero-interest microcredit (interest-free loans to small entrepreneurs or low-income individuals who wish to start or expand a small business).

Some government programs offer interest-free loans to support certain sectors or to help people in need access affordable financing.

Non-profit organizations or foundations can offer zero-interest loans to support social initiatives or social entrepreneurs.

Interest-free community loan programs to support members seeking to improve their financial situation, or to launch projects of collective interest.

4 – If these first three options do not meet the needs, we look at fair market value loan options, that is, a loan with a preferential interest rate to which a risk premium is added. They can be offered by banks, private investors, or governments, among others. It is from this option that the notion of “cost” for the company begins, the interest on the loan becoming an expense to be paid for it. This cost, as a general rule, is lower than the following option.

5 – Finally, there is equity investment . This involves private investors such as angel investors, venture capital firms, other government avenues or through the entrepreneurial ecosystem. Equity investment is the purchase of ownership interests in a company (shares), with the aim of becoming a shareholder and participating in the company’s profits. This type of investment involves the purchase of shares, which gives the shareholder the right to claim a portion of the company’s assets and a share of its profits. Ultimately, this is the most expensive type of financing because the equity investor is granted a portion of the increase in the company’s value, which can be significant if it is well managed and developed.

Regardless, whether you opt for a bank loan, a grant, or call on a private investor or even a close relative, each of these sources has specific requirements – check with your CPA. Forewarned is forearmed.