Government Loans for Small Business: Essential Insights and Options | 7 Park Avenue Financial

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YOU ARE LOOKING FOR GOVERNMENT OF CANADA SMALL BUSINESS LOAN FINANCING

LOOKING FOR THE GOVERNMENT GUARANTEE LOAN FOR SMALL BUSINESS 

You've arrived at the right address!  Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today 

               Unaware / Dissatisfied with your 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 originates business financing solutions for Canadian Businesses – We offer  GOVERNMENT SMALL BUSINESS LOANS &  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

Government loans for small businesses are a crucial resource for entrepreneurs seeking affordable and accessible financing options.

Unlock the financial support your small business needs with government-backed loans designed for your success!

LET'S NAVIGATE THE CANADA SMALL BUSINESSES FINANCING PROGRAM!  

Wouldn’t you agree a ‘secret’ is something ‘unknown to many others‘… basically ‘privileged information’?

The essence of those two definitions involves sharing information on the Government of Canada Small Business Loan financing program. The bottom line is, how could something so great in Canadian business be misinterpreted or not even heard of by so many when supporting the growth of Canadian firms via government loans for small businesses?

WHY DOES THE SMALL BUSINESS LOAN PROGRAM APPEAL TO BUSINESS OWNERS

The government has made it easier to get loans for small businesses with the Canada Small Business Financing Program. The program shares risk by lending money via a financial institution credit union, and gets repaid when lenders are paid back in full -

Loans can be used to finance many things, such as buying land or buildings, making improvements on them, such as purchasing new equipment, and renovating them through a tenant leasehold improvement agreement.

The program registration fee is 2% of the total amount of the loan, and that fee can be financed as part of the loan amount. Interest rates are very competitive under the program.

Let’s explore the mysteries surrounding government small business loans and prove to applicants why a little expert knowledge can help you ‘crack the code’ on the best loan financing program for Canadian Small Business - the federal small business loan.

GOVERNMENT SMALL BUSINESS LOAN FINANCING

And for a good start, what’s ‘SMALL‘? The program defines small when it comes to financing for small businesses, so if you are in business as a corporation or a proprietor and have revenues under 10 Million dollars, you are eligible. If you are a start-up or a new business, your revenue/sales projection should be considered under that amount.

The provincial government also collaborates with the federal government to provide support and funding to small businesses.

P.S. You won’t be punished if you overachieve on revenues at some later point in time - Success is allowed when it comes to utilizing government business loans!

In our case, you can call it a ‘secret, ' but it’s probably better to call it ‘misinformation’ about what the government of Canada Small Business Loan covers.

WHAT DO FEDERAL GOVERNMENT LOANS FOR SMALL BUSINESSES FINANCE?

Eligibility for those three things are :

Equipment - new and used

Leasehold improvements

Commercial Real estate

Working capital facilities / lines of credit

In addition, intangible assets such as intellectual property can also be considered when financing leasehold improvements and working capital costs.

LOAN LIMITS UNDER THE PROGRAM

The maximum amount a borrower can borrow for their project is $1.1 million, with no more than 350000 going towards equipment and leasehold improvements. Talk to  7 Park Avenue Financial about how much financing is allowed for your business needs.

NEW! 2021—The Canadian government has decided to open the Canada Small Business Financing Program and allow not-for-profit, charitable, and religious enterprises to become eligible borrowers. This is an important change for organizations that are often excluded from traditional financing options due to their nonprofit status or similar factors.

NEW 2022 - 

In 2022, several significant changes were made to the Canada Small Business Financing Program (CSBFP) to enhance its support for small businesses. These changes include:

1. Increased Loan Limits: The maximum loan amount was increased to $1.15 million, with up to $350,000 available for leasehold improvements and equipment purchases​ (Canada Startups)​.

2. Expanded Eligibility: The program now includes non-profit organizations and charitable enterprises as eligible borrowers, broadening the scope of businesses that can benefit from the program​ (ISED-isde)​.

3. New Financing Products: Additional financing products were introduced, including a new line of credit option, which offers more flexibility for small business owners to manage their cash flow​ (ISED)​.

4. Improved Loan Terms: The terms and conditions for loans were made more favourable, including longer repayment periods and lower interest rates to make the loans more accessible and affordable for small businesses​

5. Reduced Administrative Burden: Efforts were made to streamline the application process and reduce the paperwork and administrative requirements for both lenders and borrowers, making it easier to access the funds​ (ISED-isde)​​ (Canada Startups)​.

This is a ' lump sum ' term loan structure, and the program is not a business line of credit or working capital loan. Talk to the 7 Park Avenue Financial team about government working capital loans.

(Yes, one of our 'secrets' we're sharing is that it is generally not known that you can acquire real estate with a government loan under the program via a participating financial institution.

A recent major headline in Canada's financial press criticized the program for having a lot of 'messy red tape' and high costs. Want to know a secret? If you carefully follow a detailed, simple process, your transaction will hardly be 'messy. ‘ And, oh yes, about those costs.

The program's interest rate is 3% over prime, which would put you around 9% using mid-2024 as a benchmark example in the current interest rate environment. If a Canadian business owner thinks he can get financing with a limited personal guarantee for items such as leaseholds, software, etc., at a better rate than that, we would like to meet him.

The program has been around a long time, so many people mistakenly believe the cap on the small business loan financing program is 250,000.00 - guess what, it was raised to 350k during the most recent recession. We indicate that it will stay at that amount.

It's no secret, of course, that the owners of the business guarantee most business loans in Canada. That's a good thing! Let’s also crack the secret code on that one since you will be pleasantly surprised to know that owners need only a 25% personal guarantee on the loan.

And finally, the secret code # is 53000 We repeat 53000. That’s the number (53000) of loans made in Canada in the last ten years under the small business loan financing program. Would you like to be 53001?

KEY TAKEAWAYS

1. Program Overview: The Canada Small Business Financing Program (CSBFP) helps small businesses secure loans from financial institutions by sharing the risk with lenders. This initiative aims to make it easier for small businesses to obtain financing for various needs, including expansion, equipment purchases, and property improvements. In addition to loans, various grant programs are available that provide non-repayable financial support to small businesses.

2. Eligibility Criteria: Small businesses with gross annual revenues of $10 million or less are eligible. New and existing businesses can apply, but farming businesses, not-for-profit organizations, and charitable entities are excluded. Business grants are also available for different sectors and geographic areas, with varying criteria and application processes.

3. Loan Purposes: Funds can be used for purchasing or improving land, buildings, and new or used equipment. Financing is also available.

CONCLUSION - SMALL BUSINESS GOVERNMENT LOAN SOLUTIONS

Canada Small Business Financing Program helps small businesses by giving them loans. Whether it's business as usual or a COVID-19 pandemic, financing is key for any business.

It removes lenders' risk, and it can be used to buy land, buildings, or new equipment for commercial use. The program also provides opportunities for tenants who want to renovate their leased property because they are responsible for all maintenance costs until lease renewal time!

Call  7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor, about sourcing valuable funds from the best financial institutions with access to this program.

It is one of the best financing programs for small businesses. Grow expansion with the revenue of your products and services with financing tailored to your needs, and let us help you with your loan application to ensure success.

FAQ: FREQUENTLY ASKED QUESTIONS

Can you buy a business under the Small Business Financing Program?

Buying an existing one can be a great option if you want to start your own business. The Canada Small Business Financing Program is specifically designed for this purpose! With the program, as long as you don't exceed its appraised value and purchase price limits (the lesser of two), financing may be possible with qualified financial institutions. Talk to  7 Park Avenue Financial before committing to any appraisal expenses, just in case all other requirements are met!

What is the Canada Small Business Financing Program

The Canada Small Business Financing Programme helps small businesses get loans by splitting the risk with lenders. Up to $1,000,000,000 per borrower, no more than $350,000 can be available. The maximum sum needed to upgrade the leasehold and leased properties and for repairs of new or used equipment is 350k

What are government loans for small businesses?

Government loans for small businesses are financing options backed by the government, offering favourable terms and lower interest rates.

How do I qualify for a government small business loan?

Eligibility criteria vary but generally include business size, revenue, and industry type. Specific requirements can be found on the loan program's official website.

What is the application process for government small business loans?

The application process involves submitting a detailed business plan, financial statements, and other required documentation through the lender.

How can I improve my chances of getting a government small business loan?

Ensure you have a strong business plan, accurate financial records, and a good credit history. Meeting eligibility criteria and understanding the application process is crucial.

Are there government grants available for small businesses?

There are government grants for small businesses, though they are generally more competitive and have specific requirements.

What is the difference between a government loan and a private loan?

Government loans often have lower interest rates, longer repayment terms, and more favourable conditions than loans from banks and commercial lenders in the SME marketplace.

What resources are available for minority-owned small businesses seeking government loans?

Specialized loan programs and grants offer tailored resources and support.