There are many businesses with less than perfect credit that need financing for green projects that are both profitable and good for the environment. The good news is that loans are available through angel investors, peer to peer lenders, banks, credit unions, and other financial institutions, and under different government programs.
Grants and Funding under Government Programs
Canadian businesses are offered green grants and other types of funding for community and home projects. One option is to apply with the Business Development Bank of Canada which provides venture capital, subordinate financing, consulting services, and financing to medium-sized companies and small business owners. Another option is to apply for funding through the Atlantic Canada Opportunities Agency which works with different business agencies. The goal is to stimulate economic growth and development by diversifying local economies and making businesses more innovative and competitive. Funding is also available at the provincial level, one option being the Agriculture Financial Services Corporation. Businesses have access to financing by different government funds and programs such as the Automotive Supplier Innovation Program, Agri-Innovation Program, Advanced Manufacturing Fund, and others. Eligible expenses may include expertise related expenses, non-capital, capital, labor, etc. The goal is to finance cutting-edge technology and advanced solutions to promote innovation and boost productivity. Depending on the program or fund, the scope can be local, regional, and even national. Financing is offered to develop and implement branding and marketing plans, for trade missions, conferences, and trade shows, and to create advertising materials. Businesses are also offered financing for pre-commercialization testing, product engineering, and prototyping.
Banks and Other Sources
Businesses with less than perfect credit are usually offered secured loans for green and community projects, which is one alternative to government financing. Secured loans require some type of business collateral, for example, real estate, deposits and cash savings, equipment and machinery, vehicles, accounts receivable and business inventory, etc. This is one way to access affordable financing but businesses risk losing the collateral in case of default. Unsecured loans are also available but many banks are unwilling to lend to businesses with poor and average credit. If you are a long-term customer and have other accounts at your bank or credit union, you have better chances even if your credit score is less than perfect. Angel investors also offer financing for green projects but require ownership equity. This is one solution for start-up businesses with average credit. There are different types of angel investors, including limited liability companies, businesses, and trusts.
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