YOUR COMPANY IS LOOKING FOR A CANADA SMALL BUSINESS GOVERNMENT LOAN!
THE BEST SMALL BUSINESS LOAN IN CANADA?
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
Is the Canada Small Business Financing Program a smart way to finance your business? We think it is, if you understand what it is... and what it isn't! Let's dig in.
The SBL govt loan program in Canada is in some way a ' preferred' program when it comes to the SME sector. While some SME businesses in Canada can in fact be a fair size we would quickly point out that our first fact here is simply that the program is geared toward businesses that have actual or projected revenues under the 10 Million $ threshold.
HERE ARE THE ASSETS THAT CAN BE FINANCED UNDER THE CANADA SMALL BUSINESS FINANCING PROGRAM
It's a customized program that provides financing for a small handful of asset categories; those include:
Equipment,
Leasehold improvements,
Technology equipment and application software,
Real estate.
THE SBL LOAN IS NOT A CASH LOAN OR A WORKING CAPITAL / LINE OF CREDIT SOLUTION
The typical misinterpretation of the program is that it's a cash loan, a working capital loan, or a revolving line of credit. The answer is a categorical ' NO IT IS NOT ' to all 3 of those!
HOW DOES THE GOVERNMENT GUARANTEED LOAN WORK?
How does the program work? It could not be simpler. The SBL loan funds 90% of anything you buy in the approved asset categories, which of course means that your ' down payment' or a better term ' equity component' is a minimum of 10 percent. Careful attention in your business plan and financial projections needs to be made around ensuring your working capital and debt to equity ratios are considered reasonable. A nominal registration fee is part of the program and this amount can even be financed, bundled into the loan. Most borrowers will find the terms and conditions of the program extremely flexible.
While many business owners wish funds could be used for working capital and cash flow needs that simply is not the case. So if you're 'smart' on SBL loans you'll take some time to know what it covers relative to what can be financed.
WHAT IT THE LOAN TERM IN THE SBL PROGRAM
Terms typically sought by our clients tend to be in the 5-7year range.
LET 7 PARK AVENUE FINANCIAL HELP YOU NAVIGATE THE PROGRAM
In the U.S. many institutions partner with the government on their version of this loan program. That isn’t the case here in Canada - the main partner is your local chartered bank. Your application and approval process will in fact be much quicker, and smoother when you've found a banker or Canadian business financing advisor that understands the program and knows how to ' fast track' you toward approval.
INTEREST RATES FOR SBL LOANS
There are a couple of other key advantages of the program - they include the pricing, which is very favourable relative to overall credit risk in the SME sector ( that includes start-ups also by the way ) and is currently in the 3% over prime these days. With rates currently so low, that’s a solid cost of funds.
MANY FRANCHISES IN CANADA ARE FINANCED UNDER THE GOVERNMENT LOAN
Many franchises in Canada are well suited to the SBL government loan program. We suspect it wasn’t intended for that, it’s simply turned out to be the case. Banks won’t finance 95% of all franchises directly but are happy to do so under the auspices of the Government of Canada Small business financing program.
LOAN GUARANTEES
‘Will I have to guarantee the loan personally? ‘Is a key question asked by clients we meet in the SBL process? The answer is... partially, as only 25% of the loan will be under your personal covenant.
MYTHIS AROUND THE GUARANTEED GOVERNMENT LOAN
There are many myths around SBL loans:
Myth # 1- Do I have to work with or meet or present to the government
Answer - NO
Myth #2 - Is the process complicated
Answer - It will absolutely be complicated if you're not prepared. However, if you have a business plan, reasonable personal credit history, a list of assets you need to be financed, and some other minor documentation you're off to the races!
CONCLUSION
So are SBL loans 'smart financing’ for small businesses in Canada.In the right circumstances, absolutely. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you navigate Government loan waters!
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
