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A comprehensive guide to getting a business loan in Alberta 

Whether you need $10,000 or $50,000 – Alpine Credits is the best alternative for personal loans in Alberta

a businessman using a laptop at a table

Alberta’s economy is growing and a big part of that is due to local entrepreneurs establishing new and unique businesses. From bakeries to clothing stores, every kind of business will need to be kickstarted with some financial support. Both new and existing business owners have many ways they can access funds to bring their ideas to life or grow an existing business.  

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Understanding business loans in Alberta 

Alberta is known for its oil and agricultural industries, but businesses outside of those industries are big contributors to  the province’s economy. Because a business is a significant investment, lenders provide entrepreneurs with ways to access capital to launch their companies.  

Business loans can be considered as a type of personal loan. You can certainly use a personal loan for your business, especially if you don’t have credit history. However, applying for a business loan will lead to more opportunities. Business loans are used for several purposes, including

  • asset purchases 
  • startup fee payments 
  • franchise purchases 
  • website costs 
  • employee and advisor compensation 
  • working capital supply 

You may need only one business item, such as a marketing fund, or you may need to accomplish multiple tasks that need financial support. Normally, business loans can fulfill the needs of your business more than personal loans can since they can be larger loans.  

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Eligibility criteria for business loans 

Being eligible for a business loan is different from being eligible for a personal loan. While personal loans depend on your personal financial history or creditworthiness, business loans require evidence of a stable business with steady cash flows. The company’s financial history plays the most prominent role in the approval for a business loan and the lender may need to verify: 

lenders will want to know that the business can repay the loan without any stress. The lender may require you to submit your bank statements, financial or tax returns to demonstrate the company’s revenue streams.

some types of loans may require your business to have been operating for a certain amount of time before you can qualify for the loan. In general, the longer you have maintained your company with stable cash flows, the better your chances of approval. 

a business plan is especially important when you’re applying for funding to launch the company. The business plan describes your vision as enders want to know how you’ll use the money and how you plan to generate the money to recompensate them.

when you apply for a loan, you’re also asking for a specific amount of money. Be sure that the amount of money is reasonable in proportion to your company’s size. 

The minimum requirement for each factor is different depending on the lender and what kind of loan you’re applying for. Likewise, lenders may look at additional aspects, like your personal financial history to determine your eligibility for a loan.

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How to apply for a business loan in Alberta 

Applying for a loan for your company operates similarly to applying for regular loans. The method to getting your loan may vary slightly according to each individual lender, but in general, you can assume the following steps.

young businesswoman on her phone with boxes behind her

before applying for the loan, determine if you and your business can manage additional payments associated with a loan

for the best result, you’ll need to prepare a business plan to demonstrate the roadmap of your business to your lender. The plan should include how you plan to use the loan, your business model, your target market, and the revenue projections

the government, banks, and alternative lenders will all have something different to offer. The government may have specific grants, alternative lenders may have larger loan amounts, and the bank may have lower interest rates. The one you choose should have your company’s best interest at heart.

some lenders will be transparent about what to prepare for your loan application. In other cases, getting your documents in order will happen simultaneous to the application step.  

the lender should have application forms on their website. If you prefer, some lenders may have in person or phone options for their applicants.

upon approval, make sure to evaluate the offer to determine if it’s right for you and your business. If you find that it fits your needs, accept the offer. You’ll soon receive your money in your bank account.

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Choosing the right loan for your Albertan business 

The Government of Alberta provides entrepreneurs with several options. Each kind of loan is available at different locations and are applicable in certain contexts. Finding the right loan requires comparing various lenders and their offers. Interest rates, loan amounts, and purpose of the loan will all depend on who you collaborate with.  

The Government of Alberta and the Government of Canada offer many grant options for entrepreneurs who want to launch their business ideas. The following grants and funding are just a few examples of what is available.

In Alberta, the federal government has some special funding possibilities for existing and potential businessowners.    

  • Agriculture Financial Services Corporation (AFSC)—Canada relies heavily on Alberta’s agricultural industry, so they provide commercial loans for those who want to open a business on their farm. 
  • Business Innovations Canada—while not a specific funding program, the Government of Canada provides resources based on your specific needs. When you input some details about your business, the webpage can tailor certain funding options for your business.  

To help your business get a foot into the door, Alberta offers a few loans that get the job done.  

  • Canada Small Business Financing Programto qualify as a small business, your company must make less than $10 million annually. If you qualify, you can use the funding to expand your property or to improve your equipment.  
  • Community Futures Alberta—Alberta has a unique resource that is available only within their province. For those who want to start, grow, or buy a business, Community Futures is a good place to start.  

If you qualify under certain demographics, you may have funding that is available only to you. The government offers special loans to Immigrants, First Nations Peoples, and women.  

  • Alberta Women Entrepreneurs—not only does the Government of Alberta provide funds for women owned companies, but they also provide networking opportunities and consultation. They are also a non-profit organization, dedicated to empowering women in Alberta to start and grow their business. 
  • Aboriginal Entrepreneurship Programs—this opportunity is not limited to Indigenous business within Alberta. If you’re part of the First nation and Inuit communities and want to start a business, you have an exclusive funding choice.

If you’re looking for more general funding, your bank or an alternative lender are good options.  

  • Bank business loans—the most common option for business financing is applying for a business loan through your local bank, which is an option available to people across the country. Depending on how your business performs and how long it has been operating, the loan amount will vary. Although banks have straightforward application processes, they may take some time before you hear back from them.  
  • Home equity loans—another way that you finance your business endeavors is through a loan based on the equity in your home. You can calculate the equity in your home by subtracting your outstanding mortgage balance from the appraised value of your home. Since home equity loans can free up large amounts of money and, the approval  standards for home equity lenders aren’t as strict as the banks’, home equity loans are  a popular option.  

Home equity loans are available for anyone regardless of status. If you own your home, you could be eligible for a loan.

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two businesswomen talking at a table

Managing your business loan 

Once you have received your funding, you can achieve your business goals like upgrading your equipment or hiring more people. While it’s an ex citing stage for your company, be sure to remain diligent in repaying the loan. Just like with personal loans, showing integrity and staying on top of your payments will reflect well on your company’s credit score.  

For the most effective management, you can implement a few strategies. Not only will it provide growth for your business, but you’ll naturally avoid obstacles in the loan repayment process.  

with a specific budget in mind, you can also keep track of your credit. You’ll also improve your business’ overall credit history. When you make a budget, be sure to  adhere to it to avoid new debt.

letting the lender make automatic withdrawals helps keep track of your payments. For the most part, the automation will be set up during the closing of the deal.

it’s good to invest back into your own business with the money that you generate. The investments can include your staff and other processes.

if at any moment you need to adjust your payments, tell your lender right away. Keeping open communication will help avoid any potential problems.

Home Equity Loan Equation
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Conclusion: home equity loans for your business 

As previously mentioned, applying for a home equity loan can be your solution to fund your business plans. If you have paid down at least 25% of your property’s value, you could be eligible for a home equity loan from Alpine Credits. Many grants and loans have certain criteria that you and your business may not qualify for. However, some homeowners in Canada may access their equity in the form of cash, and the amount may even be comparable to other grants.  

Contact a Financial Solutions Specialist at Alpine Credits to learn more about home equity loans. Anyone on the team will be able to answer your questions and may help you determine if a home equity loan is right for you and your company.

a woman calculating numbers

Frequently asked questions

Alberta provides plenty of resources for both new and existing entrepreneurs. The government themselves have put all the information businessowners may need to find the kind of funding that they are looking for.

Business loans have higher standards than regular personal loans because approval relies mostly on the state of your business. By preparing a solid business plan, demonstrating steady cash flow, and having collateral can increase your chances of getting a business loan.

Business owners in Alberta can find other solutions to fund their business through multiple strategies. They can raise money through crowdfunding, applying for personal loans, or ask for support from your family and friends. Entrepreneurs who own homes can also investigate secured loans like home equity loans.

Yes, there are certain programs that are available only to a certain demographic, namely for women, immigrants, and Indigenous people. A few are listed in Alberta’s small business resources page