Business loans are largely saturated in urban areas in Ontario. If your business is going to be located in a fancy neighborhood, banks will be tripping over themselves to offer you a loan. However, if your small business is located in a rural area in Ontario, obtaining a loan can be tricky.
Rural areas have to struggle with prevailing stereotypes that these locations are bad for business. Rural regions also have a reputation for lacking infrastructure and consumer demand for a business to be profitable. However, these are mere stereotypes. While they can be true for some businesses, these notions are not true for all rural Ontario small businesses.
It’s not impossible for your small business to obtain a loan without changing the location to a big city. Here are several tips that will help rural Ontario entrepreneurs obtain business loans:
Find a Good Government Loan Aimed at Rural Businesses
The Canadian and Ontario governments have taken extensive measures to promote business growth in rural areas. There are multiple government-issued low-interest loan options for rural businesses that your small business might qualify for. The Ontario government currently has three government programs to this effect: the FedDev Investing in Business Innovation program, MaRS Regional Innovation Centres program, and the Community Futures Development Corporations program. The CFDC program specifically targets start-ups in rural Ontario. Qualifying candidates can receive loans worth up to $150,000 at low interest rates. Your business location must be in rural Ontario to qualify.
Seek a Business Loan Specifically Provided for Your Industry
It’s easier and more affordable to obtain industry-specific business loans than generic business loans. For example, if you are going to start a farming business in rural Ontario, you can apply for a loan from the Canadian Agricultural Loans Act program. Likewise, if you want to get funds for a tech or medical start-up, look for specific government or private sector loan options for that industry. Your chances of obtaining a loan would be higher.
Request a Loan from a Local Bank or a Credit Union
Do not depend solely on a national bank to give you a small business loan. A local bank located at or close by to your rural location will be more likely to fund your venture. Therefore, find all the banks and credit unions in your town and the immediate surrounding area. One of them will certainly approve your small business loan request.
Have a Good Business Plan
Do not neglect developing a good business plan to obtain your funds. Because your business will be located in a rural area, you will need this plan more than urban entrepreneurs. Include all the necessary information all business plans must have, such as the demand, industry trends, competition, and projected earnings. In addition, include a section detailing how your business could help the community. Say if your business could create jobs and provide tax revenue for the local government. Small businesses that uplift rural communities are highly regarded in the loan approval process.
Yes, it can be challenging to get a loan for a small business in rural Ontario. But, it’s not impossible. You must dedicate yourself and research your options. Reach out to your local government or the Ontario provincial government for advice and support. Exhaust your government loan options before seeking private sector loans.