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Qualifications For The Federal Government Loan Program In Canada
Government Small Business Loan approval success depends on the quality of information that you as a business owner have on being successful for this popular government program administered by Industry Canada.
We're going to provide some key explanations and information around the ' SBL ' , the common name for the Govt Small Business Loan. And by the way, the loan amount is not that small for firms in the small and medium enterprise sector who are privately owned.
By the way, the actual name of Industry Canada's program is the ' CSBF ' ; the Canadian Small Business Financing program.
So forget all the acronyms, call it what you want, but if you're a smaller or newer business in Canada you might well want to consider utilizing the program - in recent times the govt has increased the amount that can be borrowed - up to a million dollars in certain situations. That's a large amount, but here at 7 Park Avenue Financial typical loan amounts for the program tend to range in the 350k range on average.
How To Access the Government Guaranteed Loan :
There are a number of key stages in completing a successful funding for your business, not the lease of which is being able to determine if you qualify .
Here are some key basics in the initial determination of qualifying
Actual or business revenues must be less than 5 Million dollars per annum
The owner or owners of the business must have a decent personal credit history - typically this means a credit score in the 650 range - Safe to say that since it is a federal program your personal tax filings should be up to date - Bottom line - no tax arrears
Understand what can be financed under the program - These loans are not cash or working capital loans - The loan is used to finance 2 key asset categories - equipment and leaseholds
So our point... simply call it whatever you want, but consider using the program! And by the way, whats so ' SMALL ' about 1/2 Million dollars. That’s the formal cap on the program, although most financings are done in the 350k range. Again, it’s probably just us, but that’s not small. Everything’s relative we guess.
Let’s examine the stages of getting a completed funding under the program. Stage one is of course determining if you qualify. Some basic guidelines are as follows - your first must have revenues, or projected revenues under 5 million dollars. We say ‘projected ' because thousands of firms financed under the program are in fact start ups who might clearly not be able to achieve this level of financing outside the program.
Owners of the business must have a respectable personal credit history and be up to date in their personal tax filings. Doesn’t it make sense that you might not get a government loan if you have tax arrears? We certainly think so.
Documentation for the Small Business Loan
It might be easy to feel overwhelmed on the documentation required for the loan - that should not necessarily be the case - You should have a business plan or executive summary of the business, one that includes financial projections - Additional back up info would include your personal net worth statement
At 7 Park Avenue Financial many clients searching for govt guaranteed loans tell us they can't find bankers who are familiar or comfortable with the program
Recommendation :
Speak to a trusted Canadian business financing advisor with a track record of business finance success in the program
Presenting Your SBL Loan Package:
Be prepared to discuss typical questions that might come up under any loan for business - that includes use of proceeds of the loan , your relevant business background and experience, etc.
Its simply a case of presenting your package in person, and answering typical question that might come up on your business, the use of the proceeds, and your own business background and experience . Here again a trusted business advisor can do this for you and with you.
Approval Under Govt Loans:
All invoices you submit under the program are paid by the bank and are paid up to 90% of the face amount of the invoice - Your contribution to the program is the balance of 10%. That ten per cent is your ' equity ' component of the program. The govt, aka Industry Canada guarantees the bank the majority of the loan .
Hundreds of millions of dollars of loans are advanced annually under the program, for pretty well ever industry in Canada . By the way, franchises are a huge component of the program in our experience.
If you are looking to take advantage of the solid rates, terms, and flexibility of the Govt Guaranteed Loan speak to a business financing expert who can help you navigate the program in the lease amount of time - allowing you to start, run, or grow your business.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
