Tech and SaaS businesses don't fit traditional bank underwriting. No physical assets, often unprofitable, valued on recurring revenue (ARR). The Canadian financing ecosystem has evolved: venture debt, ARR-based lending, revenue-based financing, and SR&ED loan-backed advances all target tech specifically. Each works at a different stage.
Founder capital, friends + family, bootstrapping
Angel rounds, accelerators (NEXT, Y Combinator)
Venture debt (Espresso, Founderpath)
Venture debt (Comerica, SVB Canada)
Asset-backed lending against ARR
Canadian-Controlled Private Corporations (CCPCs) receive refundable SR&ED tax credits of up to 35% on R&D spend. Lenders like Espresso Capital and Boast.ai advance against these expected refunds — often providing 12-month working capital at 10-12% APR. Effectively free money since the refund pays back the loan + interest.