4 tips for starting a business as an immigrant to Canada

1. Build your credit score

Being new to Canada may mean you don’t have a credit score, which you need to get a bank loan to start a business.

A simple and quick way to build strong credit is to sign up for a credit card and use it responsibly. After about six months, you will have a credit score that a bank can use to finance your project.

According to Narang, there are two principles to remember to earn a good credit score:

1. Make your payments on time.
2. Keep your credit utilization ratio low. 

“Credit utilization refers to how much credit you’ve used out of the total amount you’re eligible to borrow,” explains Narang. “You don’t want to borrow too much, and you don’t want to apply for too much credit either.” 
For example, if your credit card has a limit of $5,000 and you regularly use $1,000, your score will be 20%, which is considered reasonable.

Finding financing even without a credit score

If you don’t have a credit score in Canada, you can still get financing for your business.

Futurpreneur Canada, in partnership with BDC, provides loans and support to newcomers to Canada. You may also qualify for some government programs. What’s more, up to $50,000 is available through BDC’s Newcomer Entrepreneur Loan.

2. Put some money aside

Narang says it’s important to have enough money to cover your personal expenses while your business is getting started because it may take some time to become profitable. You should have at least six months of personal expenses set aside. If you don’t have that money now, start saving as soon as possible.

If you need help finding a job to make money while you’re planning your business, Renu Narang suggests checking out the Government of Canada’s website’s Prepare to Work page. You’ll find information on:

• how to find work
• getting your credentials assessed
• where you can take classes to improve your English or French
• free newcomer services in your area

3. Embrace Canadian culture

To be successful in business, you need to understand the local culture. For example, you have to know who your future customers will be. Take the time to find out what they like to buy and how they like to buy it.

Narang believes that the best way to learn about Canadian culture is to get involved with groups in the community where you live, such as volunteer organizations, business associations, or your local place of worship, wherever you can mix with people who have lived longer in Canada than you.

“The more people you talk to, the better,” says Narang. “Once you’ve built a solid network where you live, you can branch out and make connections elsewhere.”

4. Find support

There’s a lot to learn when you start a business, especially if you’ve just recently arrived in Canada. Find someone with business experience who can offer you advice and guidance. This person, called a mentor, can help you find the resources you need. 

Many organizations and programs offer training, mentoring, advice and guidance to people wanting to start a business.

For example, in partnership with BDC, ACCES Employment runs the Entrepreneurship Connections program, which offers information and support to start your business in Ontario. Futurpreneur Canada also offers programs, including mentoring to entrepreneurs across Canada.

Next step

Put your ideas into action. Have a look at our detailed roadmap on how to make your dream come true, How to start a business in Canada: The ultimate guide.