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Use these tips to identify sources of money to grow your service-based business in Canada.

Creative ways to finance your service business

Accessing capital to start or grow a business can be challenging for all entrepreneurs, particularly those with service-based businesses. Your biggest asset is likely your intellectual capital rather than bricks and mortar.

You’re not alone if you struggle to raise funds. Most business owners tend to self-finance, which limits their growth potential.

How can you find that elusive pot of money to bolster your business development? Think creatively and look at internal and external opportunities to find the cash you need to fuel growth.

Internal sources

There are many creative ways to find some money inside your business. 

Travel smartly

If your service involves travelling to visit clients, use those trips to research new markets and opportunities for growth. This will minimize business development expenditures.

Working through local partners in foreign markets can be a good strategy to reduce your travel costs after you have established relationships and agreements.

Use a credit card wisely

Charge travel and day-to-day expenses (like office supplies) to your business credit card to help slow down your cash outflow.

Some cards offer a 25-day grace period to pay the balance without interest.

Consider leasing office equipment rather than purchasing

Getting the gear you need to improve or increase production is important for growth. But paying for equipment from your cash reserves can jeopardize your company’s ability to meet other financial obligations.

Check with your account to see if leasing rather than buying equipment it is the best scenario for your particular business.

Negotiate astutely

Build in start-up payments and progressive payments from clients, especially for long-term projects. In other words, don’t wait until the end of a multi-month contract to invoice a client. Get some money along the way.

While you’re at it, try negotiating longer payment terms with your suppliers or potential suppliers. Negotiating wisely both with clients and suppliers will improve your cash flow.

External Sources

If you are looking to raise a greater amount of capital, through banks or other sources, the key ingredient is a solid business plan. You can find many excellent business plan templates online.

Here are some financing options you can pursue.

Your bank

Like most entrepreneurs, the first place you will turn if you want to access credit is to your bank.

As a service firm, you need to be proactive in selling your business strengths, especially when you have no tangible assets. It’s important to be prepared, not only with your business plan, but also with a good credit rating and a clear explanation about the purpose for the funds.

Work with your small business banker to ensure you select the right borrowing solution, from an operating line of credit to a term loan or lease financing.

By developing a relationship with a banker who understands your business, you can get valuable advice on things like loan structuring and what to do after you’ve landed a big contract.

That advice is just as valuable as the capital itself.

Family and friends

Often referred to as “love money,” this option involves asking people close to you to invest money or lend money to your business.

Perhaps there is someone in your immediate family or among your relatives or friends who would be willing to invest in your business venture. You could offer them a better return on their investment than they would get elsewhere.

Be as professional in dealing with them as you would strangers. Present your business plan, detail your financial request, and outline any repayment terms. Put the final agreement in writing.

Angel investors

Private investors with surplus funds to invest in new ventures typically come into play if you are seeking substantial sums of money.

Finding them requires some research. The best sources may be through your professional contacts, such as your accountant, lawyer, insurance agent, and financial advisor.

Angel investors should not be confused with venture capital, which is another financing source.


Federal and provincial governments offer loan, guarantee, and grant programs to support various aspects of business growth.

Visit the Canada Business Network to explore programs that may support your particular business.

Ask your colleagues

Other entrepreneurs will have ideas for financing your business growth.

Consider joining one of the many business networks or associations that exist across the country in order to meet and network with other entrepreneurs.