Financing New Business in Nunavut When You Have a Bad Credit

New businesses in Nunavut have different financing options available and even start-ups with bad credit and limited credit exposure qualify under some programs.

Government Programs

The Small Business Support Program is the first stop for start-up businesses in Nunavut. Under the Small Business Opportunities Fund, the goal is to offer support and assistance to pilot projects, expansions, and business start-ups. The Entrepreneur Development Fund also assists start-ups and provides training in risk management, tourism safety, business start-up, bookkeeping, and accounting. Under the Small Business Support Program, start-ups are offered services and advisory such as investment placement, bid security, loan guarantees, and loans. These services are available in Baffin, Kivalliq, and Kitikmeot and are offered through business development centre offices.

Private Lenders

Another option is to check with private lenders in Nunavut to see whether you qualify for business financing. Check with major and local banks to find more about their requirements. If you have some asset to pledge as a guarantee, you have better chances for getting approved. This can be anything of value, for example, machinery and equipment, inventory, accounts receivable, business inventory, deposits in bank and savings accounts, cash savings, and anything else. Secured business loans are available from banks, credit unions, and other establishments. There are other funding sources to look into if you have tarnished credit, including peer to peer lending networks and angel investors. Peer to peer lenders offer business and personal loans at competitive interest rates. There are no hidden fees. While the terms and loan amounts vary by lender, the repayment term is usually up to 5 years. The interest rate also varies from 5.9 to 20 percent depending on credit rating. Customers with average and bad credit scores are offered interest rates in the low 20s because they are risky borrowers. Another option is to contact angel investors to check their terms. Also known as angel funders and informal investors, they offer start-up capital to new businesses in exchange for a percentage of the ownership equity. Anger investors are usually entrepreneurs with free capital to invest and usually require a significant percentage in exchange for funding. Finally, you can use a low-interest business credit card with a high limit to cover some of the start-up expenses.

Resources:
https://www.lifeoncredit.ca/top-5-student-credit-cards-for-young-canadians/

https://www.lifeoncredit.ca/bad-credit-personal-loans-in-canada/

https://www.bdc.ca/en/i_am/aboriginal_entrepreneur/pages/aboriginal_fund.aspx