Published October 23, 2024 • 5 Min Read
TLDR
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Showcasing your experiences and successes will build your credibility in the eyes of lenders
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It’s wise to build a relationship with a financial partner before you need to call on them for financing support
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Bring your financial partner into your inner circle so they can work with your extended team and work together towards a common goal
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It’s imperative to have your finances in order before you apply for financing
As a business owner, hard work and persistence brought you to where you are today — but sometimes it takes capital to reach the next stage. While many business owners are intimidated by applying for financing to grow their business, securing funds ultimately comes down to planning: you have to know how much money you need and how it will help you achieve your goals.
RBC recently sat down with new and established Canadian business owners — and their banking advisors — and here’s their advice for entrepreneurs looking to secure the funds to fuel their business’s growth.
Leverage your successes to fuel your business growth
Whether you’re a new business owner or a long-time entrepreneur, you can use your past experiences to showcase your ability to manage business funds. These success stories can demonstrate to lenders and investors that you’re a credible business owner with the skills and vision to effectively leverage funds for growth.
Rebecca Swedlove, franchise owner of Aqua-Tots Kanata, leveraged the success of her swim school’s first location to expand to a second location in Orleans. “Because the first location has been so strong, it helped finance the new one,” says Swedlove’s RBC partner, Joanne Ironside.
Erik Wigger, owner of FullMoon Autoworks, has a similar story. After renting his business space for two years, Wigger’s lease was up, and he was faced with a decision to either relocate or purchase the space. He worked with Diana D’Aoust, his RBC Relationship Manager, to showcase his business’s ability to support the property’s purchase, ultimately securing the funds he needed to drive exponential growth. “Erik has a really strong business mind and proved he had been successfully operating out of this location for some time,” she explains.
Read full backstory: Driving Success: FullMoon Autoworks Founder Has Grown by Being Bold and Being Smart
But needing funds for growth isn’t only reserved for new business owners. Seasoned media entrepreneurs Raja Khanna and Dan Fill of Dark Slope sought funding for a project that would revolutionize the way they produced content. “We went to RBC with the idea to build a giant, multi-million-dollar LED volume wall,” says Khanna, explaining that an LED volume wall is a system of linked high-end LED panels used to display video footage or 3D content behind a production’s actors. They worked with Rebecca Rombeiro, a senior relationship manager for RBC’s Media and Entertainment Commercial Banking Team. “Rebecca didn’t flinch. I think the track record Dan and I have of taking calculated risks and having them work out gave RBC the confidence to support this very capital-heavy build,” Khanna adds.
Read full backstory: How Dark Slope is Pioneering the Intersection of Technology and Entertainment
Know your numbers to prepare for financing
Business is all about numbers — you have to know how much you’re earning and spending, and what you need to achieve your business goals. Before discussing your financial plan with your banker, gather all your business’s financial reports, forecasts and plans.
“I am very detail-oriented,” says Swedlove. “So, when I put my forecasting together, I didn’t miss by a cent. When you have so much on the line, you can’t miss anything. Joanne and I ran the numbers so many times to make sure the financing plan made sense.”
Wigger was just as prepared for his meetings with D’Aoust. “Erik came in with a three-year forecast analysis,” she says. “He put together a business plan, projections and an analysis of the industry, and he can turn back to them to see where he is in terms of his growth. It’s important to know your numbers not just for your bank, but for understanding where you need to be to stay on your path.”
Build a relationship with a financial partner
When your financial partner understands your business and is aligned with your vision, they are better equipped to help you secure financing at the right time. Establishing a relationship with a banker — before you need them for a loan or a mortgage — can help you receive timely financial support.
Wigger had to move quickly to purchase his business unit. Because he already had a strong relationship with D’Aoust, she was able to arrange the financing he needed to close the deal on time. “Diana reduced a lot of worry during a time of big change,” says Wigger. “With her in my corner, I could approach the purchase of this property with confidence.”
D’Aoust also encourages business owners to bring their entire advisory team together, recalling how Wigger let her work closely with his lawyer and accountant. “Some owners like to keep their advisors separate. But when we work together, we’re all trying to get to the same goal,” she adds.
Khanna and Fill’s long-standing relationship with their advisor has also helped them secure financing over many years in the media business. “In our world, there are a lot of tax credits and production financing available, and RBC has been instrumental in getting us access to that.”
Whether you’re looking to expand your business to another location, invest in technology or equipment to improve your operations or expand your products, accessing capital can help you make the next move. With the right planning, preparation and relationships in place, you can put yourself in a position to secure the financing you need.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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