YOUR COMPANY IS LOOKING FOR A GOVERNMENT SBL LOAN!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
The government small business loan has been and continues to be a benchmark in start-up and small business financing in Canada. Govt guaranteed business loans have had some changes, so it's time to plug into these changes and how they impact this program's financing benefits. Let's dig in.
WHAT ARE SOME RECENT CHANGES IN THE CANADA SMALL BUSINESS FINANCING PROGRAM
Have you heard about those ' winds of change ' in ' SBL’ small business loans in Canada? The ' great ' news is that the program's fundamentals and purpose clearly do not seem to have changed. That's probably recognition by INDUSTRY CANADA (they sponsor and manage the program) that the SME COMMERCIAL FINANCE sector in Canada generates a huge portion of employment, revenues, and... oh yes ....taxes!
THE HISTORY OF GOVERNMENT GUARANTEED BUSINESS LOANS IN CANADA
So for over 50 years, the program has delivered solid financing for businesses in all industries. The fundamentals of the program include the opportunity to start, grow, and expand your company. In many cases, these loans are a direct substitute that our clients would normally not successfully receive under ' traditional ' bank financing criteria. Those criteria are all too well known to the entrepreneur who arrives ' plate in hand ' looking for business financing or expansion capital.
THE SIZE OF YOUR BUSINESS IS IMPORTANT
Those winds of change that have entered the program do not affect the fundamentals - financing is available for start-ups or established businesses with less than 10 Million dollars in projected or actual revenues. Therefore larger medium sized companies cannot take advantage of the program as they must consider other Canadian business financing sources. Loan sizes can actually reach 1 million dollars if real estate is a component.
Medium sized businesses in Canada typically access rational bank term loans or offerings from other commercial lenders. Although small business loan banks advertise SME funding many business owners find credit requirements a challenge - that's the attraction of the SME loan and guarantee program via Industry Canada.
WHAT CAN BE FINANCING UNDER THE GOVT LOAN PROGRAM
Assets that can be financed include either new or used or leasehold improvements to leased/rented premises. It's important for the business entrepreneur, financial manager to understand that those equipment categories are extensive. It includes rolling stock, such as trucks or other vehicles, computers, telecom and application software, and even the ability to finance a franchise.
WHAT THE SBL LOAN IS NOT!
What can't you finance under a government-guaranteed SBL loan? That's the painful news we often have to deliver to clients to have exhausted other financing options - that includes goodwill, credit lines, fees to purchase a franchise, or R & D costs in developing a product. ( Note - use the SR&ED program to finance and cash flow your research and development - these credits can also be financed).
Small business loan interest rates outside the program are highly dependent on overall credit quality and personal net worth and credit score of the applicant. Business loan interest rates under the government loan are benchmarked to prime rates.
OTHER CHANGES TO THE PROGRAM FOR QUALIFYING BUSINESSES
So what about those ' changes ' to the program? Although banks are chartered to fund and administer the program, the bad news is that different banks tend to, by law, interpret the program differently when it comes to govt guaranteed small business loans.
Recent legislative changes to the program from Canada's federal government include the ability for fees to be charged by the bank and personal guarantees to be required on a case-by-case basis. (Traditionally, only 25% guarantees where required). We suppose those are the ' ugly ‘(as deemed by the borrower) portions of the program changes.
Note that business owners can take advantage of an interest-free period during the initial loan repayment schedule. Interest-free loans should always be viewed in the context of what the business owner is trying to achieve from the government backed loan.
CONCLUSION
Is the government guarantee loan program for you? Bank loans for small businesses are a challenge in any environment - pandemics included! If there's a bottom line for small businesses in Canada, most top experts certainly agree that the Canada Small Business Loan program is still a clear winner for start-up, franchise, and growth financing in the SME sector. Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you obtain govt backed loans from the right financial institution that meets your requirements. Participating financial institutions include some credit unions, by the way.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
