What Are Government Small Business Loans ?

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Questions You Might Be Afraid to Ask About Government Small Business Loan in Canada

Government small business loans go by various names, we at 7 Park Avenue Financial call them ' SBL's, but whatever name you choose to call this financing it's critical that entrepreneurs consider this valuable financing when evaluating business finance alternatives to start a business, buy a business, purchase a franchise, etc . We're covering off some solid reasons to consider federal govt help when looking for funding . Let's dig in.

Government Small Business Loan for Better and Faster Business Financing

Government loansare a perfect finance solution for start ups or firms who have not been able to attract ' traditional ' financing . It's ironic that the Canadian banks are a part of this program, and play a key role in delivery of the financing.

Get Rid of Startup Financing Once and For All

The loans are used to complement the owners own equity investment into the transaction . One popular reason for the programs success is that no outside collateral is required to complete a financing. Most business folks know that traditional chartered bank financing will over require outside collateral, guarantees, covenants, etc.


Loan terms are another attractive part of the SBL process - they make great sense given that typical terms are 3-5 years for repayment . That allows owners to minimize cash outflow which is critical in a start up or new business phase.


Equipment and other business assets are typically the most used part of the program . The ability to purchase new or use assets and finance them in a manner that makes sense is key .



Combined with the owners contribution into the business - i.e. the ' down payment ' the longer amortization of government loans make solid business sense. In effect you are matching your cash outflows with the useful life of assets you purchase and use to run , and grow, the business.


Many clients we work with use the program to purchase a business - that can be a franchise or an independent private company . Existing franchises can also be finance, with the approval of the franchisor of course.


One critical piece of advise we discuss with clients is that fact that buying a business should typically be negotiated as an ' asset ' purchase, not a ' share ' purchase . If the business has assets the government loan program can finance them!


When buying and financing a business purchasers should be able to demonstrate they have solid business experience . While direct experience in the same industry is a help it is not necessarily required. Ensure you have a proper business plan that lays out the financials properly . We also remind clients that an often underutilized part of the program is its ability to finance a real estate purchase, also commercial mortgage financing can also be considered separately .


Any asset that has been purchased within the last 6 months can also be financed under the govt loan program . This is a classic replenishment of working capital. It may be required that an appraisal of an asset is required, but this helps both the lender and the business owner - we consider appraisals an investment relative to the minor cost relative to asset size.


Don't under estimate the power and flexibility of the Government of Canada guaranteed small business loan program . We mentioned earlier that the banks play a key role in the delivery of the program as they administer and fund the loans under the auspices of INDUSTRY CANADA , who is the sponsor of the program.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you or your business can utilize this valuable Canadian business financing vehicle.



7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
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

Government Small Business Loans In Canada : Last Call For Information You Need

From Zero To Sixty : Govt Small Business Guaranteed Loans In Canada

OVERVIEW – Information on government small business loans in Canada . The ability to achieve the financing you need in a govt backed SBL loan depends on this information

Government small business loans often come with the perception that anything to do with this business loan program moves at a very slow speed. That isn’t the case, not the least reason being that your loan requires no correspondence or meeting with the govt! (More about that later) While ' zero to sixty might seem a little too fast we'll show you that proper info and planning make this attractive business financing solution very accessible achievable in less time than you think . Let's dig in.

Traditional financing in Canada, mainly by banks, has strong appeal for business owners and entrepreneurs. The challenge is qualifying; as it must be clearly proven that your business has revenues, profits, a clean balance sheet, and proven cash flows.

Part of the appeal of ' traditional ‘financing is low interest rates and financing costs. ‘Cost effective ' and ' efficient ' aren't normally associated with start up or SME COMMERCIAL FINANCE. The Govt small business loan program in Canada, underwritten by Industry Canada, offers that lower cost of financing for firms that cannot fully qualify for term loans or cash flow financing.

Many start ups and franchise acquisitions are often financed by the program, which is accessed by thousands of companies every year, to the tune of billions of dollars. The clear benefit here is strong funding at competitive costs from very reliable sources. Since Canada's chartered banks administer the program it's safe to say it’s that ' reliable source'!

Top experts tell us that many new and emerging businesses are often initially funded by owner equity, friends and family, and, dare we say it ' credit cards'!

There are some very basic requirements that come with the program - they include:

Good personal credit history of owner/owners

The business must operate from a leased or owned business premise

Funds can only be used for equipment needs and leaseholds, or real estate

The eligible revenue cap on the program is 5M dollars - obviously start ups are totally ok with that, and tens of thousands of businesses in Canada have revenues under 5M dollars . Economists tell us this sector is in fact driving a huge portion of the Canadian economy.

The government guarantee on the loan via the bank obviously makes the program attractive to bankers that actively participate in Govt loan program. That decreased risk of loss is very attractive to our generally conservative Cdn. banks!

The bottom line for both the bank and yourself - it's easier to support and start or grow an existing business.

So how does one prepare and get started? Key basics are a credible business plan or exec. Summary, info on your business experience, a list of what funds will be used for, and a realistic cash flow projection that shows repayment of the loan.

' Last call '

often refers to your final opportunity - so if you're ready to explore and investigate or commence a government small business loan financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success with a track record of success who can assist .



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN GOVERNMENT SMALL BUSINESS LOAN EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Facts On SBL Government Small Business Loans In Canada

Things You Must Know About SBL Loans In Canada



Information on government small loans in Canada . The SBL loan program is a viable form of financing for any eligible company who can’t access traditional bank capital



Government small business loans in Canada. We're talking about some straight facts around ' SBL ' financing in Canada. We all have heard the story: businesses in the SME sector account for huge portions of the Canadian economy in employment, revenue, and tax generation.

In Canada Industry Canada is the government department / organization that sponsors and administers the SBL program.

The SBL small business loans program allows for maximum financing of 500,000.00$, however that amount is limited to real estate only. The limit for financing of equipment and leasehold improvements maxes out at 350,000.00$.

The program sets a maximum interest rate of 3% over the bank prime rate. Unlike a similar program in the U.S. (In the U.S. it’s called the 'SBA ') the SBL program does not cover cash loans, working capital, business lines of credit, etc. That's a popular and unfortunate misconception when it comes to businesses that are looking for other types of financing.

One area of clarity that we explain to clients is that both corporations and individual business owners, i.e. a proprietorship, can be eligible for an SBL Loan.

Why are SBL loans so popular then? We’ll quickly add that they apply to any business that has real or projected revenues under 5 Million dollars annually. The popularity is derived from the simple fact that businesses in the SME sector traditionally have a tough time raising capital... of any kind!

Without strong financial statements or solid net worths and guarantees from the owners there is a real financing gap in Canada when it comes to term loans and access to capital .

In Canada the SBL program is administered, as we said, by INDUSTRY CANADA . But that is not your key contact for any loan application. It's your bank, who administers the program on behalf of the government. This allows banks to provide a valuable dimension to business financing in Canada to the small business sector.

So what in fact are the requirements of the program? Essentially you need to present a sound and viable business plan that shows a reasonable expectation of profit and of course cash flow generation - which is of course what repays the loan.

The business owners provide a guarantee limited to 25% of the amount of the loan. That in itself is a great thing, given that the majority of business financing in Canada requires 100% owner guarantees. As a business owner applying for he SBL program you should be able to demonstrate a good personal credit history and we can only call a ' reasonable' personal net worth. Things like being a homeowner and having some savings, etc certainly help the cause.

A couple key business ratios must be satisfied in your business plan and financial projects - they revolve around debt to equity and working capital calculations. Your business advisor or accountant can make sure these are properly presented.

Government Small business loans totaling the in billions are provided to almost 8000 businesses annually in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in finalizing your access to one of the best programs in Canada when it comes to finance for the small business sector.

7 PARK AVENUE FINANCIAL

CANADIAN GOVERNMENT SMALL BUSINESS LOAN SBL EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/government_small_business_loans_sbl_canada.html

How Canadian Government Small Business Loans Work . Is the SBL Loan For You?

Intrigued By The Government Small Business Loan?



Information on the SBL loan for Canadian business. How government small business loans work in Canada.






‘So, exactly how does it work?' If we had the proverbial nickel for every time a client asked us that question about how Canadian government small business loans work we would be .. well, you guessed it.. rich!

Because the players, the mechanics of the SBL loan are widely misunderstood it's worth taking the time to understand how this valuable Canadian business financing vehicle works.

Quite often the criticism and perceived dissatisfaction with the program relate back simply to misinformation about the mechanics of the financing.

If we had to focus in on two issues that come into play time and time again with clients its either their dissatisfaction with the timing it takes to get approved , or , even worse, the fact that they are not approved!

The Canadian government small business loan is formally known as the BIL/CSBF program, and is operated under the auspices of INDUSTRY CANADA, a federal department. Our humble opinion is that the SBL loan is in fact very well managed, but where things fall apart always comes back to clients not knowing, or understanding the very basic qualifications for the program. Winning, via an approval under the program provides you with a great method of securing long term capital for business needs such as equipment, leaseholds, computers, software, and yes... even real estate if you choose.

Not every Canadian business owner knows the cap of the program... i.e. the infamous ' how much can we get ' question! For any non real estate item the loan cap is $ 350,000.00 ( is it just us , but that’s not exactly a small amount relative to ' Small' business loan ) and if you choose to finance real estate only you can actually finance 500k , the program cap under real estate.

Once you start getting in and understanding the program you start to appreciate its true value. Why? Because it becomes readily apparent that normal traditional financing in Canada could never satisfy some of the financing needs of start up businesses, small businesses, new franchises, etc. Those 3 key business segments are by far the most popular users of the SBL loan.

From a Canadian chartered bank or commercial independent finance company it’s all about risk. So the ability to finance your business with as little risk as possible is paramount to a bank or finance firm.

That's why using government small business loans allows you to leverage your business, even if it is a start up or a franchise to 90% leverage.

Understanding of the program essentially comes back to the following point; it's simply that the government is providing a guarantee or an ' enhancement ' we could call it to your loan. So all of a sudden the bank that told you your business might be too risky is in fact able to complete your financing satisfactorily.

When it comes to our two client issues, timing and approval we can only say that if you spend some time in understanding the small handful of criteria you eliminate both of those issues nicely.

Criteria for the program couldn’t be more basic - a permanent equity injection of 10% of the financed amount (that’s the ' down payment) and clean credit history of the busines owner or owners. Other miscellaneous items are the same as any other form of traditional financing, a business plan and cash flow, some supporting background info on the owners, etc. And by the way, don't consider applying for a government guarantee if you haven’t paid or filed your taxes. That's common sense, right.

Oh, and that timing issue. If you do things right it should take a couple days, if you choose to stumble around in misinformation it will take you much longer. Fast track your loan even faster by speaking to a trusted, credible and experienced Canadian business financing advisor on the SBL loan.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/sbl_government_small_business_loan_loans.html

Canadian 21st Century Financing – Utilizing Government Small Business Loans - Why an SBL Loan Is Right For You

Let's quiz you first. Answer yes or no to the following question. Do you believe you can get a 350,000.00$ business loan in Canada with a 10% down payment... 7 year terms...oh and how's this for size .. only a 25% personal guarantee . Oh and one more thing, at a rate just a few points over prime. Even if you are a start up or a relatively new or smaller firm?
So, yes or no. Then Read on!

Is your company a ' start up ‘? Or, are you a small to medium sized Canadian business looking for financing choices?


Have we got a deal for you! Well at the risk of sounding like a hack used car salesperson we are actually genuinely excited about some Canadian business financing that a lot of biz folks seem to be overlooking these days. And wait until you hear why.
And the reasons why. Simply that the answer is ' YES ' to our first question. Those are the key elements of Canadian government small business loans. And with all due respect to our friends in government, you don't even deal with them on the loan.

We're talking today about what many folks call the Canada SBL loan. It seems to be one of the better guarded secrets in Canada - even though 7,441 of your peers and competitors in small business used it in Canada last year. Oh, and by the way, they got a total of 957 Million dollars in financing at those great rates, terms, and structures that we mentioned in our opening question to you.

Let's dig in then, and get you very quickly up to speed on the program. You'll be surprised at how clear (hopefully!?) our info is on getting you what you want to know about your participation in the program.

Here we go... strap youself in. The program is administered by the good folks at Industry Canada, but on a day to day basis the loans under this special program are administered by your local banking institution. The program maxes out at 350,000.00$ ... which from our perspective is quite generous, don’t you think. And here’s a special kicker - if you just want to use the program for real estate you can actually borrow up to $ 500,000.
Financings can be used for equipment, leasehold improvements

Qualifications, simply your 10% equity contribution against the asset you are financing, and a reasonable personal credit history. In Canada those folks with Credit Bureau Scores of 650 are deemed ‘good ' from a credit perspective.

Want some winning suggestions on getting government small business loans approved quickly, efficiently, and for the amount you need? Your best bet might not be to go it alone. Seek a credible, experienced and trusted Canadian business financing advisor who will help you draft a proposal, present it for you and with you, and help you ensure 100% financing success for your Canadian SBL loan . Welcome to the 21 st Century! ... Finally .. great financing when you need it, at rates, terms and structures that work!






Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/government_small_business_loans_sbl_loan.html