YOUR COMPANY IS LOOKING FOR GOVERNMENT BUSINESS LOANS –
THE ‘ SBL ‘!
Canada's Best Small Business Financing Program
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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7 Park AvenueFinancial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Email = sprokop@7parkavenuefinancial.com
Government business loans in Canada! You can pretty well guess or imagine that is one of the first questions we always get from a client is - am I eligible? So, are you SBL (Small business loan) worthy? Let’s examine the facts.
First of all, one should be commended for looking into and exploring the program because via Industry Canada the SBL Loan in Canada helps many thousands of businesses every year.
WHAT AMOUNT OF FUNDS CAN BE BORROWED UNDER THE GOVERNMENT SMALL BUSINESS LOAN PROGRAM?
As we have said in the past we don't necessarily think that the 1 Million dollar loan cap on the program is that ' small ' either - although we're pretty sure Warren Buffett isn’t using the program. Actually he can't, because of one the first eligibilities are that one has to be able to borrow legally in Canada via landed immigrant or citizenship status. So that quickly covers off one of our first eligibilities we guess. Some restrictions and rules apply to the million-dollar borrowing limit.
HERE ARE THE THREE ASSET CATEGORIES THAT CAN BE FINANCED UNDER THE CSBF LOAN
There is both misinformation and misunderstanding around what your firm can borrow against under the government financing program. To keep it simple the program is primarily used for equipment, leaseholds, and real estate. That equipment by the way can in fact include technology and application software, which are often components of many clients borrowing under the BIL loan.
NUMEROUS FINANCING NEEDS CANNOT BE FINANCED UNDER THE GOVERNMENT GUARANTEED LOAN
That kind of brings one around to what can't be financed under the program. So it’s very important to clarify that the loan is not a cash term loan, it cannot finance working capital components such as receivables and inventory, and it cannot finance goodwill. Having said that though we remind clients that the program can be an excellent tool for acquiring a company if the firm being purchase has assets.
There is perhaps the perception by some out there that this is an 'easy money' program. While in fact, it offers excellent rates, terms and structures it is important to point out that to be eligible you have to demonstrate a minimum of 10% permanent equity or down payment and the owner or owners of the firm must have a reasonable personal credit history.
STARTUP SMALL BUSINESSES AND FRANCHISES ARE OFTEN FINANCED UNDER THE GOVERNMENT SBL LOAN
The good news though that while it is very difficult for start-ups to get initial financing for their business government business loans, aka the ' SBL / BIL ' are the perfect solution for a start-up business that needs financing. That includes franchises by the way.
Suffice to say that you need a solid business plan and projection also, which can easily be prepared by a business advisor or accountant, etc - that’s of course for those that might not be 100% comfortable in preparing such projections.
One of the great features of the program is the limited guarantee - you as a borrower are only required to guarantee 25% of the loan personally. That leads us also to clarify that you must be able to demonstrate that you have some personal assets to back up that 25% guarantee - Naturally, that’s the worst-case scenario, so let’s stay optimistic here, right?
So, are you SBL loan worthy? You just might be, so seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your SBL business loan needs.
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Stan Prokop
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