1. WAITING TOO LATE

It’s not when you urgently need money that you apply for financing! Once you’re short on cash and unable to meet your payments and expenses, it’s already too late, you’re up against the wall. “This is a recovery situation, rather than an investment situation,” says Juliette Kehr. “We’re simply not the reference organization in this case.” This situation is not a good sign for investors, because it means you haven’t planned your needs well.

A proper financing process takes time. “Once the file has been pre-qualified, it is passed to the analyst who evaluates compliance according to several quantitative and qualifying criteria, and authorizes a credit pre-approval; then the file is presented to a financing committee, and there is a legal part for the disbursement and the implementation of guarantees,” explains Ms. Kehr.

The process does indeed involve several players. It should be noted that Evol often lends in partnership with other financial institutions, sharing the risks of the file. However, each has specific financing terms and internal processes that move at their own speed. Expect a minimum of 4 to 6 weeks with a well-prepared file, and up to a few months when things require more attention. So plan enough time and a provisional budget when you apply for financing.

2. ARRIVING POORLY PREPARED

Providing a clear vision of your business and a solid financial structure provides a very useful indication of how the financial liquidity will flow once it is released. And who says solid financial structure, says arriving with a detailed business plan and financial forecasts for at least two years. Your accounting must be up to date, with the latest financial statements. "It is better to arrive prepared to avoid surprises and additional delays in back and forth for paperwork!", confirms the analyst. Your file is a guarantee of your seriousness.

Of course, not all entrepreneurs are good with numbers! If you need help putting your project on paper and establishing your business plan, Projet A is a simple and accessible digital platform offered by Evol and its partners (EEQ Entreprendre Ici, Microcrédit Montréal and HEC Montréal) to guide you through the different stages of writing. Previsio , a free tool developed by the École des Entrepreneurs du Québec, can also help you evaluate your financial forecast scenarios.

“When we look at a file, beyond the figures that are indicators of viability and profitability, we look for the WHY: who is this entrepreneur? What is their project? Where do they want to go?”, explains Marianne Auclair. We look at the history, the entourage, the entire business model.” Preparing yourself is also about having a well-defined project, a structured and complete file, but also coherent. You have to have thought about it and be able to argue all the facets of its relevance: state of the market, competition, added value and impacts (which are essential in the context of financing with Evol). There is also a whole personal aspect: your values, your commitments, the solidity of your teams, the strength of your network, the knowledge of your partners. Evol also offers a tailor-made support program throughout the financing to consolidate your business model on 360 degrees.

3. NEGLECTING YOUR PERSONAL FINANCES

“It’s still taboo to talk about the bad grades that tarnish credit files, but the personal balance sheet is linked to the business project,” explains the director. “Showing your credentials and proving by example that you know how to manage your finances demonstrates financial education, understanding, and the ability to manage your business well.” Sound personal financial management is a guarantee of success in the eyes of investors. “If your file is tarnished by mistakes along the way, know how to explain them.”

"Many start-up entrepreneurs have a very significant personal investment in their business project. It is true that this shows that they believe in their project. But you can't always inject everything at the start, you have to know how to balance and plan for the future, in the growth phase. At Evol, an investment or transfer of assets from the entrepreneur is required and the reinjection capacity is analyzed."

You must show that your financial plan is well put together, that the calculation of your financing needs is precise, and above all well balanced and distributed between several sources.

4. HIDE CERTAIN INFORMATION

“There are all sorts of scenarios,” confides Ms. Kehr. “It’s possible that it’s not intentional. There are situations in which we quickly detect distorted realities. For example, someone who comes to us with a need for cash, saying they’re in hypergrowth, but we realize that they’ve been in deficit for several years. Entrepreneurship is a small world, and we have several ways of knowing, including rolling up our sleeves.”

It is better to put your cards on the table from the start in order to get off on the right foot! It is a question of trust in the relationship between the lender and the borrower. Remember, the financier is one of your key business partners and you are establishing a real human relationship with him. Transparency is therefore essential. Open and honest communication about your financial situation fosters trust: disclose your debts, know how to explain a bad credit rating, share your sources of financing and your short, medium and long-term financial objectives. By doing so, the lender will be able to adapt its loan options to your real needs. Trust can mitigate risks and generate better loan conditions when the borrower is reliable and responsible. "Indeed, I can ask for more guarantees if I perceive that the risks are greater," confirms Ms. Kehr.

5. BE FIXED ON THE INTEREST RATE!

Shopping for the lowest interest rate is like feeling like you've made a deal on your mortgage rate! In fact, that's not quite it. "The interest rate is one element among many others in business financing," says Ms. Auclair. "We can't limit ourselves to the rate alone, because there are several financial products on the market, and different terms and conditions that are just as important to consider:

• The term, the depreciation

• The possibility of a moratorium (at Evol in particular, we consider parental or adoption leave)

• Flexibility (fixed or variable rate)

• The guarantees

• The possibility of early repayment

• Annual fees, disbursement fees, etc.!

So go ahead, broaden your horizons, be aware of all the possibilities, get ahead and build your future plan, your business will only be stronger!