All businesses require financing. Whether it’s internally-generated via ongoing cash flow, or obtained externally in some manner, money is the lifeblood of any enterprise. This year’s PROFIT 500 survey asked Canadian entrepreneurs what obstacles they’ve faced with regards to financing, and how they’ve tackled them. One theme that sticks out is that companies that are growing rapidly cannot achieve their targets without significant financing.
For other businesses, the major banks are either key partners or reluctant to lend, particularly if it’s a small enterprise. Importantly, financing for lots of companies on the PROFIT list isn’t just about approaching financial institutions for loans: vendor credit seems to play a big role for some of the businesses surveyed. And for others? If there’s no ready access to external financing, the owners have had to use personal funds to keep the company growing.
In what follows, we’ve chosen a selection of quotes from respondent entrepreneurs about how they’ve obtained financing for their business and the challenges they’ve encountered.
“We have built a solid relationship with our banker. We have used them to finance all of our major capital investments.”
—Pro-Ply Custom Plywood, Vaughn LaVigne, CEO
“We depend on our vendors for credit so are diligent about paying them on time. In return, we have experienced preferential rates and service which helps us maintain the required profit margin levels in a very competitive environment.”
—Lantrax Logistics, Rod Wainwright, CEO
“Financing is difficult for a small business. Unfortunately, the best method has been personal funds from the owners.”
—CarData Consultants, John Domsy, CEO
“Cash crunch due to rapid growth. We had to be very strategic where we invested our capital.”
—D & D Vehicle Sales, David Drever, CEO
“Our biggest challenge was to obtain a large operating line from chartered banks in order to maintain a comfortable cash flow and run our operations. We addressed this challenge by providing the banks with our excellent business plans, accurate projects in-hand, and our future projects with their actual, achievable projections.”
—Mississauga Bus, Coach and Truck Repairs, Mahendra Mahadeo, CEO
“Banks won’t lend.”
—Spoke O’Motion, Myles Cullen, CEO
“It has been difficult to get funding without going the venture capitalist route. We didn’t want to give up any part of our company, but we still wanted to continue to grow at the rate that we had in our first 5 years”
—Venue Kings Ticket Brokers, Anthony Beyrouti, CEO
These tips are just a small flavour of what’s in the full PROFIT 500 guide. For the complete list of companies that made the cut, check out this link. The whole PROFIT 500 package can be accessed here, and includes rankings, profiles and comments from keynote speaker Amber MacArthur and panelists such as Kirstine Stewart and Harley Finkelstein from Shopify.