FREE FINANCIAL CHECKUP
Financial Checkup Prior To Government Funding Search
Before you start any search for funding for your small business in Canada, be it to borrow money from your friends, family, the bank or the government of Canada, understanding your personal financials is critical.
While your credit score may play an important role in helping you determine what you can afford, what you can pay back and what can be provided to you in terms of financial assistance, a financial checkup can help the funding agencies and you as well, show your preparedness.
How prepared are you financially to take on government funding support?
With the Free Financial Checkup Tool provided here by CanadaStartups.org you will be able to determine your preparedness level.
Simply answer the below questions to obtain the financial checkup report.
Age and Income:
Determining your personal income, your spouse or partner's income and age can help determine how prepared you are to start a business and move forward with seeking government funding.
It is important to remember that there is no wrong answer.
This tool is here to help you and funding agencies determine your preparedness for government funding and the next steps.
Your Current Savings
In most cases, when starting a small business you want to have something in your savings to use. Not necessarily to use towards the business, but as starting a business can initially be a burden on your income during the startup process, having some funds saved can help you get through these times without added stress.
Again, there is no wrong answer and it is important to be truthful and answer to the best of your abilities how much cash on hand you have within your accounts. Keep in mind that not exact figures need to be entered here.
As you start a business, your personal debt can have an impact on your business. This set of questions is used to help determine your debt to income ratio.
Be sure to provide approximate amounts of your mortgage, loans, lines of credits and credit cards to determine the total money owed.
While you may consider a personal mortgage in no way connected to your business, this is a debt that is considered crucial and can often signal a good sign towards helping you obtain the funds needed.
Investments and On-Going Plan
Investments and your ability to save your income can help show that you are prepared and planning for the future. This can also signal that you are ready to take on government funding and use the funds appropriately for your business while being in control of your funds.
Your Ability for Capital
Your ability to get additional capital can signal good news for any lender for multiple reasons. It means that their funds are in some way protected.
If it comes down to it that you need extra funds in case of business emergency, do you shut down your business immediately – because you have no way of getting any extra capital, or do you have sources of where you can obtain some funds to help though this time.
These sources can mean family, friends, personal lines of credit, credit cards, other investors..etc
By answering these 5 questions related to your financials, you will be able to provide the various funding agencies an idea of how prepared you are for the next step – to apply for funding.
While this in no way guarantees you funding or will impact your chances of success, it is important to provide the extra measure to show the various agencies you may be applying to that you’ve done your due diligence and are thinkin ahead and planning financially speaking.
The results of the financial checkup can be used within your business plan, pitchdeck as well as an attachment within a number of funding applications to show your preparedness.
- Contact Info
- Your Income
- Your Current Savings
- Your Debt
- Investments and On-Going Plan
- Your Ability for Capital
Current annual income ($)
Include cash on hand, checking accounts, and savings accounts.
Include any balance on home equity loan.
Include credit card debt, auto loan debt, and student loan debt.
Include taxable accounts, brokerage accounts, tax-advantaged accounts, the value of your business, and your home equity if you plan on using it for retirement.
Provide an approximate figure of how much capital you may be able to get from personal accounts, or other sources in case of emergency.
Thank you for completing the financial checkup tool. You are one step closer to showing you are prepared and ready to start the funding search.
Based on the financial checkup tool, your Readiness and Financial Preparedness Score (RFPS) is 25 on a scale of 0 to 100. This would indicate that on average, your overall financial situation is somewhat unstable.
The RFPS specifically does not impact your chances of obtaining any funding but it does show you how ready and prepared you are to financially take on additional funds (personal or for business use).
How does the score work?
Your income, personal savings, investments, debts and the ability to find capital if needed play a big part in ensuring that you are ready to take on additional funding for your business.
The questions asked within the tool will determine on a scale of 0 to 100 how financially ready and prepared you are to move forward with your small business.
While a credit score may be a factor for certain funding programs, the RFPS will help you determine if you should or should not proceed with seeking additional funding based on your current situation.
If you scored between 0 and 25, you are considered unstable.
While unstable sounds scary, it is simply a cautionary measure to ensure you are aware of your financial situation and how the need for additional funding may affect you.Tip: As a individual with an unstable score, it would be recommended to add a contingency plan and a risk assessment within your business plan prior to any funding application.
If you scored between 25 and 50, you are considered somewhat unstable.
With a score between 25 to 50, you may be seen as in-between (not stable but not unstable) financially speaking. It is important to be aware of your income and debt and what you can handle moving forward.Tip: As a individual with an somewhat unstable score, it would be recommended to add a contingency plan or a risk assessment within your business plan prior to any funding application.
If you scored between 50 and 75, you are considered almost stable.
As a individual with a score of 50 to 75, you are average as most people will fit within this category. It is important to be aware of the costs associated with starting a business and be sure you are financially ready to handle the unexpected.
If you scored between 75 and 100, you are considered stable.
You are in the perfect range in terms of being financially ready and prepared to take on additional funding and start a small business. While funding is not guaranteed simply based on the score, it does give you a helping hand as it does show more positives.
While the Readiness and Financial Preparedness Score on it's own will not impact your chances of obtaining funding, however the greater the score, the more you are prepared and is what funding agencies will see as well.