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SBL Loans in Canada. How can the Canadian business owner or financial manager ' crack the code ' when it comes to the Canada small business loan. It’s of course a government program that helps businesses get the financing they might otherwise not be able to achieve.
Let's examine some crucial tips, dare we say ' secrets ' around cracking the secret code known as ' approval' on a program which has helped almost 8000 different businesses annually to either launch or grow their business.
We think we can all agree that if you don't understand the program offering then you clearly can't formulate a proper plan for approval
First of all Industry Canada although sponsoring or 'underwriting' the program is not the direct lender under the program. So, bottom line, no trips to Ottawa required. (We lived there for ten years though and it’s highly recommended for a vacation!). So if the government loan is not obtained from the government, who do you get it from? The answer is a Canadian chartered bank, and several other miscellaneous instantiations, but essentially it’s the banks.
Since there's virtually a Canadian chartered bank on any business corner in Canada cracking the code on that is easy, right. Not so fast, partner!! The reality is that you need to find a commercial/business banker that is attuned to the program, understands it, and has the ability and credibility to sponsor and recommend your loan. That banker is best obtained via a referral from any trusted Canadian business financing advisor of yours, or even your accountant or lawyer.
To crack the code on successful approval we can summarize by saying that you need to have a solid understanding of:
Eligibility
Amount of Financing Available
Repayment Terms
Usage restriction of the funds (this is critical and widely misunderstood)
The approval process
Businesses in Canada with revenues fewer than 5 Million dollars, even if they are a total start-up are eligible for the Canada Small Business Loan. (The government calls it the CSBF program / BIL)
Financing up to 500k can be sought, but that amount pertains just to real estate, so typically the cap on the program is 350k.
Repayment terms and structures are excellent - Terms of 1-7 years are generally available, 5 is a typical term we see all the time. Rates are essentially 3% over prime, making that a great rate anytime, even better in the current low interest environment.
Proceeds can be used not for cash or working capital, but for equipment leaseholds, software, computers, architectural design fees, etc.
The approval process consists essentially of a need for a crisp business plan or executive summary, a detailed cash flow analysis and repayment plan, and miscellaneous info on yourself and your business that you would associate with any financing application.
Need help to ' crack the code '. It's not as big a secret as some maintain. Speak to a trusted, credible and experienced Canadian business financing advisor for help with 'the code '!
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