YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
BUSINESS FINANCIAL SUPPORT AND GOVERNMENT FINANCING PROGRAMS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
CANADIAN GOVERNMENT FUNDING FOR SMALL BUSINESS
The Govt Small Business Loan in Canada (by the way, it’s not that small) is misunderstood by many business people and entrepreneurs. Are government loans right for your business?
Are there in fact bank loans for small businesses? Are you eligible? We're cutting through the chaff for those answers for finance for small businesses. When it comes to small business bank loans we at 7 Park Avenue Financial might just have the solution you are looking for who offers small business financing. Let's dig in.
Whether you are starting a business or already growing one the government loan program is potentially an excellent way to achieve that goal. Unlike traditional bank and alternative financing solutions, they have the backstopping of Industry Canada, which sponsors and monitors the program.
PROGRAM OVERVIEW - SBL LOANS IN CANADA
The Canada Small Business Financing Program is a government-guaranteed loan to support small businesses in Canada. There are numerous ways in which companies can utilize the program, and in 2022 Industry Canada made major changes to the program, all of which are very positive in nature for the Canadian business owner. Previously the program had a cap of 1 Million dollars for real estate, and 350k available for equipment and leasehold improvements under the amortization period.
Newer businesses and even start-ups are common users of the program and businesses already established looking for additional cash flow support for investments into the business also benefit.
KEY TAKEAWAYS -
Your business loan is guaranteed to a maximum of 85% of the
Any assets purchased within the last 6 months can be refinanced under a term loan
Interest rates are competitive in the program and small business borrowers can choose from floating/variable or fixed rates within the monthly payment structure.t
Loan terms are typically 2- 5 year terms and in certain cases 7-10 year terms are available
Commercial real estate under the program can be amortized at 15-year terms
NEW / IMPROVED! HERE ARE MAJOR CHANGES TO GUARANTEED GOVT SMALL BUSINESS LOANS IN CANADA
New Loan maximum of 1.15 M dollars
Equipment and Leasehold financing to a maximum of 500k - up from the previous 350k
Intangible assets of 150k can be financed
Business lines of credit /working capital now available to a max of 150k
Loan terms of 15 years for equipment/leaseholds/real estate
The maximum amount of borrowing under the facility is $ 1,100,000.00. Businesses use the financing for activities such as commercial real estate financing, the financing of leasehold improvements, and the financing of new and used fixed assets such as equipment, rolling stock, and technology investments such as computers and application software.
It's no secret that the program was created to allow entrepreneurs to purchase businesses as well as grow them. The program is utilized by many thousands of businesses every year and billions of dollars are funded under the program annually.
Although the government guarantees the vast portion of the loan applications and actual funding are administered by banks and credit unions. Over the years the size of businesses to be started or purchased has been increased to 10 Million dollars, which often leaves us at 7 Park Avenue Financial wondering what in effect is ' SMALL '. !
Your application for the program can be processed without time and frustration if you are prepared - At 7 Park Avenue Financial, our client package includes a strong business plan, cash flow projections, and information about the company and the owners/borrowers. Additionally, the Government of Canada has eased the burden of administration of loans to the providers such as banks and credit unions.
Applicants under the program should be able to demonstrate a good personal credit history, which is often supported by a personal credit bureau score of 6oo+.
FRANCHISE FINANCING -
The govt small business loan is utilized by many franchisees looking for a franchise financing solution for the purchase of a franchise from franchisors in Canada. Under new franchise financing rules under the program franchise fees can also be included in the loan - this was not available previously and prospective franchisees had to come up with personal funds to fund the franchise fee. Working capital components added to the program also benefit franchisees.
Changes made to the program had not been made in decades, making additional new flexible financing for all small business borrowers immediately available.
THE GOVERNMENT IS A GUARANTOR FOR THE MAJORITY OF YOUR LOAN
THE PERFECT BANK LOAN FOR SMALL BUSINESS
What is often misunderstood is that the Govt/Industry Canada is not involved in the daily admin or approval of individual loans. They have chartered our banks to run the program. Major misconception: Removed!
What does the business owner/entrepreneur need to consider when considering a Govt guaranteed small business loan? Issues to consider are:
What will the funds be used for (This program is only for equipment/fixed assets, leasehold improvements, and real estate)
The amount of the loan requirement - (The program was recently increased to 1 Million dollars!) That's a large loan for a small business - any small business!
Rates - In fact, this program could be termed a low-interest business loan given the competitive rates based on what a business could normally achieve in the marketplace
Term of the loan - (typical terms tend to be 3-5 years, occasionally 15 years for longer life assets)
QUALIFICATIONS UNDER THE GOVERNMENT LOAN PROGRAM
( The owner must be able to commit to a partial equity/down payment position in the loan - Typically there is no other ' senior lender' in place - Owners must have decent personal credit and are often judged on their business experience and past business expertise)
Always remember that these are not the only small business loans alternative for business owners and financial managers to consider. Both traditional and alternative financing is available for many of your business needs - These other solutions include:
A/R Financing
Inventory loans
Non-bank asset-based lines of credit
Equipment Financing
Sale leasebacks
Commercial mortgage refinancing
SR&ED Tax Credit Loans
Royalty Finance
Unsecured cash flow loans
Working capital loans / Business Credit Cards
GOVERNMENT LOANS ARE GUARANTEED BY THE GOVERNMENT OF CANADA
The attraction of the Government guaranteed Small Business Loan government funding program is of course the guarantee of the govt on your loan. Without the aid of an advisor, many business people find the process cumbersome with the expertise of an expert for these funding programs.
BDC SMALL BUSINESS FINANC ING
BDC small business loans are not government guaranteed but do provide accessible funding for businesses of all sizes. Term loans and working capital loans via lump sum payments can provide asset financing and permanent working capital to a business- including interest-free loans / deferred payment in some cases. Although personal guarantees are required on BDC loans no external collateral is demanded of borrowers. Eligibility around BDC loans revolves around Canadian incorporated businesses that are past the start-up stage and can demonstrate a road to profit and reasonable business credit/personal credit of owner/owners.
BUSINESS GRANTS AND FINANCING / GOVERNMENT FUNDING
Canadian Government grants for new businesses and small business funding needs are available to thousands of businesses in Canada, including larger companies and non for profit organizations. It's all about knowing what programs are available that meet your finance/funding needs for domestic or international trade objectives up to and including wage subsidies.
Many firms utilize grant/loan writers who are familiar with a program and who can customize the appropriate application to certain conditions required by a grant program.
Funding needs vary by type and size of business - in many cases, you need a solid business plan - 7 Park Avenue Financial prepares business plans for our clients that meet and exceed lender requirements for their loan amount needs.
Most business owners are not aware that there are literally hundreds of federal and provincial grant and loan programs in Canada. The two largest are the SR&ED ( Scientific Research and Experimental Development ) refundable tax credits program via Canada Revenue Agency, and the Guaranteed small business loan program, aka the ' SBL LOAN '.
Governamnet webssites lists these grants -
https://www.canada.ca/en/services/business/grants.html
https://innovation.ised-isde.canada.ca/s/list-liste?language=en_CA&token=a0B5W000000ZwsiUAC
Many small business grants support aboriginal business / aboriginal entrepreneurs and other First nations entrepreneurs and their first nations communities around areas such as community planning. Black business owners can take advantage of some programs around economic development.
CONCLUSION
The Canada Small Business Loan is one of the best business loan programs sponsored by the Canadian government to support Canadian businesses.
It was created along the lines of the 'SBA' loan program in the United States although most people would agree that the U.S. program is more robust. However, for businesses that wish to borrow up to a million dollars to start, grow and expand their businesses it is the perfect program that mirrors what even more established companies with strong credit profiles can obtain in the way of financing.
Interest rates are very competitive, and terms are exceptionally flexible when it comes to prepayment - for example, companies can prepay without penalty, which is generally not available in many types of bank or alternative financing.
Many businesses that are in startup mode cannot find adequate funding to meet their needs - Which is a key aspect of the Canadian Government Small Business Loan - As well the program is a strong fit for financing either a new franchise or the purchase of an existing franchise.
Both the attraction of business loan rates in Canada for Canadian companies relating to the SBL Loan program as well as the uses of funds make these loans very desirable
Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan and cash flow needs for business growth.
FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALS ASK MORE INFORMATION
How do I qualify for a business loan?
Businesses applying for business loans or for business start-up financing from financial institutions should ensure they have properly prepared and up-to-date financing statements, as well as a business plan that shows how the financing will support businesses, Other miscellaneous information such as bank statements and personal net worth statements of owners, are typical requirements. Any program application/loan application should show sources and uses of funds. Larger firms exploring new technologies or international markets might consider venture capital needs versus debt financing.
Do banks give loans to startups? Can a brand-new business get a loan?
Canadian banks do provide start up financing but owners must demonstrate the ability to repay via secured business assets or external personal collateral - Typically banks will require a collateral mortgage on owner personal real estate. Startup financing is a challenge so the entrepreneur should carefully consider what types of financing are available in a competitive commercial lending marketplace.
Click here for the business finance track record of 7 Park Avenue Financial
