When you become self-employed, there are new expenses to plan: a new computer, specialized software, a website explaining your services. To cover start-up costs, there are different sources of funding. Because some of them apply to particular conditions, an overview is required.
A suitable down payment
In order to prove your willingness to banks or organizations offering public funding, it is recommended to have a down payment, made from your savings or the money of your loved ones. For example, the Self-Employment Support measure requires a financial contribution of at least 15% of the allowance that will be paid to you in the form of money or property. If your down payment is low and you want to learn good ways to save money, we suggest these five ideas to get you off to a good start.
A bank loan
It is often said that it is difficult to borrow when one is a freelancer. Difficult, but not impossible if you manage your finances well. If it is better to have at least two years of experience as a self-employed person, Jonathan Haziza, director of products, mortgage solutions at National Bank, says that a good credit behavior is primarily sought after: ” no major backlog in the past or in the past on credit card payments, no bankruptcy, the ability to accumulate assets over time or make investments. Whether or not a bank loan is considered, you can nevertheless turn to services designed specifically for the self-employed, such as those of the Mouvement Desjardins or Desjardins Group.Manulife Bank .
Financial assistance from the public sector
Despite the paperwork this may entail, a boost from the government or from organizations dedicated to entrepreneurship is always welcome. A little earlier, we mentioned the Self-Employment Support Measure , which provides financial support “equivalent to the minimum wage rate in effect on a 40-hour-a-week basis”. There are several grant , contribution and financial assistance programs, but some of them are directed at a specific category of entrepreneurs. For example, the Opportunities Fund for Persons with Disabilities supports people with a physical or mental disability by providing ongoing support for the development of their business.
Other examples of public sector financial assistance:
- Montreal Foundation Inc. Scholarship
- Young volunteers
- Youth Strategy for CFDCs and CAEs
If you do not have access to traditional financial services or credit, community credit can be a solution for starting your business. This is a loan of honor, repayable between 6 and 60 months, at a low interest rate, eligible for people with low income. According to the Quebec Community Credit Network , the average loan is $ 6,100 and the loan repayment rate is 92%.
A crowdfunding campaign
Do you have admirers of your work? Why not ask them for a financial contribution in return for a reward? Crowdfunding, also called crowdfunding, has diversified over the years. While Kickstarter and Indiegogoare the best-known platforms, there are others that can meet the needs of the self-employed . Founded in 2013, Patreon allows creators (comics, musicians, illustrators, etc.) to have financial support from their fans on a regular basis. For example, Denis Talbot, former host and former producer of Mr. Net, currently collects more than $ 1,350 a month for his radio show Talbot .
Thanks to a good preparation, it is possible to collect enough money to go to your account. To put the odds on your side, it is best to have a solid business plan in hand. This tool, useful when negotiating a loan, will be the subject of a next post.