YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
SMALL BUSINESS GOVERNMENT LOANS FINANCING FUNDING
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?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
Government business loans provide essential funding solutions for Canadian entrepreneurs and small businesses.
Secure the financing you need to grow your business with government-backed loans.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer BUSINESS LOANS FROM THE GOVERNMENT & solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
CANADIAN BUSINESS FINANCING WITH THE INTELLIGENT USE OF EXPERIENCE
Introduction: Business Loans From The Government
Small business government loans in Canada are a solid consideration for business owners/entrepreneurs. They typically best suit start-ups, new, small, and growing firms in the SME (small to medium enterprise) sector. Why and, more importantly, how does the government provide this financing, and are you eligible? Let's dig in.
Government Involvement in Business Loans
Although understood by some, not all Canadian banks are the delivery vehicle for small business loan financing. How then is the government involved, ask our clients?
The answer is that they guarantee a large part of the loan on your behalf to the banks. A solid idea!
Variation in Practices and Requirements
Over the years, we have observed that while the program is cast in stone as far as the government is concerned, the 'real world' (that’s the one we toil in daily!) tells us that some practices and requirements certainly vary between our different chartered banks. That's a hint, by the way, that you might benefit from an experienced advisor in this program!
Usage of Funds
How do you receive the funds and what can they be used for? The program covers equipment, leasehold improvements, and even real estate in Canada. Therefore, this is not a cash flow loan or working capital facility. The loan cannot be used for inventory purchases or debt consolidation. That's important to know.
Loan Structure
The loan is always structured as a term loan with fixed monthly payments, and loan prepayment privileges are very generous.
Eligibility and Criteria
Now that we have established who you are approaching for govt loan financing, it's critical to understand the information that will satisfy the loan criteria, often called the 'SBL' loan. You're well-armed if you can deliver on the following:
Required Documentation
- Business plan
- Cash Flow forecast
- Information on the owner's business background and personal financial credit history
- Information on what you wish to finance - typically in the form of quotes from equipment suppliers or contractors in the case of leaseholds
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Eligibility Limitations
Larger businesses, unfortunately, cannot apply, but the current threshold is 10M and under in annual revenue. We're quite sure that covers thousands of firms looking for funding... Typical loan terms are between 3 and 7 years. (The program specifies an amortization term of ten years for qualified candidates)
Cost and Terms
Cost? Rates are very competitive and can be fixed or floating based on the borrower's needs.
In 2022, significant changes were made to the Canada Small Business Financing Program (CSBFP) to support small businesses better. Here are the major updates:
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New Financing Products:
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A new line of credit was introduced, allowing businesses to finance working capital costs such as inventory, payroll, rent, and professional fees. This product offers a maximum term of five years and can be used for expenditures or commitments invoiced up to 365 days prior to authorization.
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Increased Loan Amounts:
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The maximum loan amount was increased from $1 million to $1.15 million. This includes up to $1 million for term loans (with $500,000 dedicated to equipment and leasehold improvements) and an additional $150,000 for intangible assets and working capital.
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Extended Loan Terms:
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Term loans for financing real property, equipment, leasehold improvements, and intangible assets can now have a maximum term of 15 years, providing more flexibility for repayment.
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Eligibility and Security Requirements:
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For new term loans, lenders must secure the loan with the financed assets. For lines of credit, lenders must secure the loan with any small business assets, typically through a General Security Agreement.
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Simplified Administrative Processes:
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Enhanced Flexibility:
These changes were aimed at increasing accessibility to financing for small businesses, improving the terms and conditions of available loans, and reducing administrative hurdles (ISED- ISDE) (ISED- ISDE) (Cassels) (Sotos LLP).
KEY TAKEAWAYS
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Government Loan Programs: These government loan programs provide various loan options tailored to different business needs and stages of growth while encouraging economic development in Canada
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Eligibility Criteria: To qualify for these loans, businesses must meet specific criteria related to size, revenue, and business purpose. Farming businesses have a separate but similar program and can also fund leased property.
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Application Process: Involves submitting detailed business plans, financial statements, and other documentation.
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Interest Rates and Terms: Typically, government loans offer competitive interest rates and flexible repayment terms.
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Benefits of Government Loans Include lower interest rates, longer repayment periods, and support for business growth and stability. Working capital costs and the financing of intangible assets are now covered under the program. Purchasing leasehold improvements and funding existing leasehold improvements are key parts of the program when loan approval is achieved. A registration fee of 2% is due on funding.
Conclusion
If this type of business funding makes sense for your business, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can make the funding under the Govt guaranteed business loan possible with solid business advice</p>
FAQ
How do government business loans work in Canada?
Government business loans provide funding to businesses through financial institutions, with the government guaranteeing a portion of the loan, reducing risk for lenders. Businesses with gross annual revenues of less than 10 Million dollars can qualify for the Canada Small Business financing program- New or used equipment can be funded as a critical element of the program. Eligible used equipment purchases must not be private sales under the federal government program.
What are the benefits of government business loans?
Benefits include competitive interest rates, longer repayment terms, and support for business needs such as expansion, equipment purchase, and real estate. Loans are structured as term loans with monthly lump sum payments of principal and interest. The program's interest rate is competitive at 3% over the bank's prime rate.
Who is eligible for government business loans in Canada?
Eligibility criteria vary but generally include Canadian-owned businesses with a viable business plan and meeting size and revenue requirements. Real property can be financed, but typically, borrowers will utilize a typical mortgage for commercial real estate purchases - Improving leased property is a crucial use of the program by borrowers.
What is the application process for government business loans?
The process involves preparing a detailed business plan, financial statements, and other necessary documentation and submitting them to a participating financial institution.
How do government loans compare to private-sector loans?
Government loans often have more favourable terms, such as lower interest rates and longer repayment periods, and are designed to support specific business needs and growth.
What types of businesses can apply for government loans?
Small to medium-sized enterprises (SMEs), start-ups, and specific industry sectors can apply for government business loans depending on the program.
How do interest rates for government business loans compare to other loans?
Government business loans typically offer more competitive interest rates than private sector loans, making them attractive for businesses.
Can government business loans be used for working capital?
Some government loan programs allow funds to be used for working capital, while others may focus on specific purposes like equipment or real estate.
What challenges might businesses face when applying for government loans?
Challenges include meeting stringent eligibility criteria, preparing detailed documentation, and navigating the application process.
How can government business loans support business growth?
These loans provide the necessary capital for expansion, new projects, and operational improvements, helping businesses to scale and compete effectively.
What is the main advantage of government business loans over traditional financing?
The main advantage is the reduced risk for lenders due to government guarantees, often resulting in better terms for borrowers.
How do businesses determine if they qualify for government loans?
Businesses should review the specific eligibility criteria of the loan program, which typically include factors like business size, revenue, and the purpose of the loan. The maximum loan amount is 1.1 million dollars.
Can businesses with poor credit access government business loans?
Yes, some government loan programs are designed to support businesses with less-than-perfect credit, focusing instead on the viability of the business plan and overall potential. The farming industry has a unique but similar program.
