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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
A Govt guaranteed small business loan in Canada is probably the ultimate in what we could call a ' crossover' financing. Why? It delivers all the benefits (and more) of traditional term loans and, in many ways, is more accessible for entrepreneurs and existing business owners. Let's dig in.
LET 7 PARK AVENUE FINANCIAL PREPARE YOUR SBL LOAN PACKAGE
Another given in federal small business loan financing is that your ability to apply properly will always determine your approval amount and timing. Unlike many other business financing types in Canada, ' SBL ' loans can be adjudicated in only a few days if a proper application package is done. And by the way, there’s lots of help out there to do that work for you at no or minimum cost.
WHAT IS THE ROLE OF THE GOVERNMENT OF CANADA SMALL BUSINESS FINANCING PROGRAM
What then are the components of a successful small business loan financing under the ' CANADIAN SMALL BUSINESS FINANCING ' aka the CSBF ' Program? Knowing where to go is a good start. It commences by understanding that the federal government actually has nothing to do with the program on a day-to-day basis; they assume the majority of the risk for the loan, and your bank does the rest.
Planning is key to success in ' SBL’ loan financing. Your primary document is a business plan, or at a minimum, a strong executive summary. There is only one goal here - to ensure you properly lay out why the loan is a legitimate and sound investment under the program.
4 KEY ELEMENTS OF YOUR LOAN PACKAGE
That is achieved by properly presenting the business in terms of:
Industry overview
Your management or industry expertise
Competitive conditions
Proper opening balance sheet and cash flow positioning
FOCUS ON THE USE OF FUNDS AND THE FINANCEABLE ASSET CATEGORIES OF THE PROGRAM
It is also key to lay out clearly the exact use of funds - since the program only finances two asset categories, equipment and leaseholds, it's critical to show the proper description and use of the funds. Many franchises are financed under the program under all the same criteria. Real estate can also be funded under the government loan,
Note there is a registration fee for the loan, and this amount can be bundled into the loan instead of being paid directly. The loan asset categories that can be financed include leasehold improvements, equipment, and real estate.
Interest rates are very competitive for this business term loan. Numerous other features are worth checking out, including interest-free payments for a period, no prepayment penalties for early prepay options, etc.
The program is eligible for any company or proprietorship with less than 10 million dollars in revenue annually, and you may apply anytime.
RELEVANT BUSINESS EXPERIENCE
You will have a challenge in loan approval in certain circumstances if you don't properly demonstrate
or a restaurant, an industry with a high default rate, so mgmt expertise is clearly desired.
CONCLUSION
While most businesses that apply for government loans are incorporated, it's critical to note that it's not 100% necessary, but if you're focused on a real business instead of a hobby incorporating is clearly the way to go, in our opinion.
If you are looking to explore the benefits of a government-backed loan in Canada, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your application needs.
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Stan Prokop
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