Yesterday, the Bank of Canada once again held its rate at 5%. Many small business owners also spent the winter working to repay their CEBA loans before the January 18 deadline in order to keep the forgivable portion. Financing is therefore expensive at present, and lenders are reviewing files more closely than they did a couple of years ago.
Funding a small startup in Quebec remains entirely possible. It does, however, require knowing where entrepreneurs usually begin and what the person across the desk will examine first.
This article is an overview, not a directory. Programs in Quebec change often, sometimes with every budget. We recommend always confirming the current criteria with the organization itself before planning around any program mentioned here.
Where should you start looking for startup funding in Quebec?
Locally: with your MRC, Accès entreprise Québec and the SADC. Outside Montreal and Quebec City, the first point of contact is often closer than expected. Every MRC has economic development staff, and since the government established the Accès entreprise Québec network, most regions have advisors whose role is specifically to direct businesses to the right resources. They know the local funds and which programs are open this year, and their advice is free.
Many MRCs manage a local investment fund, the FLI (fonds local d'investissement), which lends to new and growing businesses in the territory. There is often a separate fund for young entrepreneurs or for the social economy.
The SADCs, the Sociétés d'aide au développement des collectivités, serve rural areas and small towns. They offer loans, advice and, in many places, a program for entrepreneurs under 40. They are accustomed to small files, and a $15,000 request is well within their usual scope.
We recommend meeting with both before approaching a bank. The funding is one reason; the main benefit is that they will identify weaknesses in your plan before a bank does.
Which other programs can support a new business?
Futurpreneur Canada works with entrepreneurs aged 18 to 39. It offers a startup loan, paired with financing from BDC, and a volunteer mentor for up to two years. The mentorship component is often overlooked, yet for a first business it can be worth more than the funding itself.
Services Québec runs a support program for self-employment (Soutien au travail autonome) for eligible applicants, which can help cover living costs during the startup period. Eligibility depends on your situation, so we recommend inquiring at your local office.
Several other organizations are frequently mentioned:
- Desjardins has programs for young entrepreneurs, including Créavenir.
- Evol (formerly Femmessor) finances and supports women entrepreneurs and other under-represented founders.
- Réseau M, from the Fondation de l'entrepreneurship, matches new owners with mentors.
- The federal Canada Small Business Financing Program lets banks lend for equipment and improvements with part of the loan guaranteed by the government.
Grants, meaning genuinely non-repayable funding, do exist, but they are more limited than many entrepreneurs hope. Most are tied to a specific purpose (hiring, export, innovation, a region's priorities), and many pay out only after the money has been spent. We recommend planning around loans and treating any grant as an additional benefit.
What do lenders read first?
The cash-flow forecast. We teach business planning in the ASP Lancement d'une entreprise at the CFP Calixa-Lavallée, and the section participants tend to rush most is precisely the one lenders read first: the cash-flow forecast.
Lenders look first at neither the mission statement nor the logo, but at the monthly table showing money coming in and going out over the first 12 to 24 months, and whether your bank balance ever falls below zero.
From this table, a lender seeks answers to three questions. Can you repay the loan? Which month is the tightest? Are your figures based on evidence, or are they estimates without support?
How can you make your forecast credible?
Document the source of every assumption. If you expect 30 customers a week, explain why: a comparable business, a foot traffic count, pre-orders, quotes from real prospects. A forecast with modest figures and clear justification is consistently more convincing than an optimistic one.
Include the slow months. A seasonal business in Quebec has a February; show it, and show how you will get through it.
Include your own salary, even if it is modest. Lenders become concerned when the owner appears to live on no income, since they know this is not realistic.
If financial planning is not your strength, seek help with this section specifically: an accountant, your SADC advisor, or a professional who regularly prepares funding applications. This is the document that secures the meeting.
Why does your own contribution matter?
Because it demonstrates commitment. Almost every lender and program will ask how much you are investing yourself: cash, equipment, a vehicle, and sometimes time and work already completed. The amount varies, but the question is always asked.
The issue is not only financial. Your contribution shows that you believe in the project enough to take a risk. An applicant requesting 100% of the funding is asking the lender to carry all of the risk, which lenders will not accept.
If your savings are limited, we recommend starting on a smaller scale. Test the idea with as little equipment as possible, sell to your first customers, and return with a sales history. Three months of real revenue is a stronger argument than any written projection.
In what order should you approach funding?
- Write a short version of the plan. Two or three pages: the idea, the customer, the numbers.
- Build the cash-flow forecast. Rough first, then refined.
- Book a meeting with your MRC or Accès entreprise Québec advisor and with the SADC if you're in their territory. Bring both documents.
- Ask them which programs fit. Write down the names and the deadlines.
- Revise the plan based on their comments. Then approach Futurpreneur, Desjardins or your bank, depending on your profile.
The process takes longer than most entrepreneurs expect: several weeks, sometimes a few months. We recommend starting before you need the money, rather than in the week the lease must be signed.
Finally, transparency is essential in every document. Advisors in a small region communicate with one another, and a realistic plan with a clear request leaves a favourable and lasting impression.