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As the old saying goes: "you have to have money to make money." So what do you do if don't have any money but you want to start a company? You do the same thing you would do if you wanted to buy a house or a car and didn't have the full amount up front. You would take out a loan. Business loans are unique in that there exists the possibility that after taking one out you might end up with more money than you started with, which is never the case with a home mortgage or a car loan.
All banks offer business loans precisely because of this potential for extra moneymaking, however, with the potential for increased profit also comes the potential of larger disasters, so there is more risk inherent in taking out a business loan than in buying some land or other assets. This is as true for you as it is for the bank, because even if your business fails you will still have to pay back the bank.
When you approach a bank or lender for a business loan, the lender will need to be reassured that you will indeed be responsible enough to succeed and pay off your loan. To give them this reassurance, you need to put together a business plan. Your business plan should include information about your target market, your budget requirements and start up costs, and at what point you expect the business to be "in the black" or making money.
If you can't get a bank to give you a loan, there are other options. The Government of Canada as well as many provinces and individual municipalities recognize that new businesses are good for the economy and offer loans and tax incentives for new businesses trying to get set up. Check out Industry Canada's Small Business Financing Program (read here)to see if you qualify, and research what's on offer from your city or province.
Not everyone will qualify for government loans, however, as they tend to be targeted at specific industries, neighborhoods, and minorities that need a little help. If you're rejected by both the banks and the government, there's still a way to fund your business idea. You can seek investments from the private sector. This could include your relatives banding together to help you out or venture capitalists.