Canada Small Business Loan Government Loan SBL 7 Park Avenue Financial

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Navigate! The Dictionary defines the term as 'to walk or find ones way‘. That's what we are going to do, make you a navigational expert on the ' SBL ‘, more commonly called the Canada small business loan. It’s also called ' the government loan ' and we will provide some clarity around why that is and is not necessarily the case!

Let's get down to basics.  Your first question probably is - 'what is the Canadian government doing in the loan and Canadian business financing area?!' That's a valid question of course.  Industry Canada is the department that runs the program.  The program has been around for many years and is designed to encourage 'financial institutions' to provide small business loan financing that they otherwise might not be able to do.

So who are these financial institutions? For the most part, we're talking about Canadian chartered banks, although some business-oriented credit unions also underwrite the program. That is where a lot of the confusion around the program exists - namely that while the government sponsors and in fact created the program it is administered on a daily basis by Canadian banks.

Why would the banks participate in the program? For the very simple reason that the Canada small business government loan, aka 'SBL', has Ottawa picking up 85% of the tab if a loan defaults.

When we look at all the questions clients have around the program a couple of common themes consistently come up - they are key issues such as 'How much can we get' (that’s a very popular one!), as well as 'how does it work and what do I need to do to apply'?

Let's address the dollars in the SBL program. The magic number for the program is $ 350,000.00, but if you use it specifically for real estate the program actually can be up to $ 500,000.00.

Would any company or entrepreneur want to purchase real estate under the program?  That may or may not be an attractive option -  for example under the current terms of the program the monthly payment would be in the 7K per month range, so that would have to be weighed against other options.

So who uses the Canada small business loan, and why is it beneficial? The reality is that over 7 thousand firms used the SBL government loan last year alone, for financings approaching 1 Billion dollars.  Funds for the program are geared toward two asset classes - equipment, and leaseholds.  Your ability to finance leaseholds under the program is one of the best features of the program. as this asset class is very difficult to finance otherwise.

The most popular question #2 about the program is simply 'how does it work - where do we apply‘. This is where it falls apart for many entrepreneurs. They aren’t prepared, they spend days, weeks, and yes months stumbling through the program, and are frustrated if they are declined. They are simply astounded when we tell them a simple clean proposal, done properly can get the financing approved in 48 hours.

Not sure about navigating your own way around the program to both achieve maximum financing and of course approval? What then. Simple, speak to a trusted, credible and experienced Canadian business financing advisor who can help you navigate the waters of financing success for the government SBL loan program in Canada.

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