CANADIAN BUSINESS AND FREE MONEY !

I am often asked by customers if there are grants and loans available for their businesses . On many occasions these firms are in the start up phase and are pre-revenue.

There is a general belief that there is ' free money ' out there , and people are trying to find it ! I categorically can state there is no free money available , but we can come pretty close !

There are some excellent programs, two in particular, that are , in our opinion, best government programs for firms in Canada .

The Canadian government has allocated hundreds of millions of dollars into what is known as the CSBF loan program - The acronym stands for the CANADIAN SMALL BUSINESS FINANCING program . The government provides a lot of data at its website on the history and operation of the program and its parameters . Some business owners might find the wealth of information overwhelming .

For the purposes of this article we will share that the prOgram is available to all new or established businesses with revenues or projected revenues under 5 Million dollars.

Most people that are familiar with the program might not know that in the current 2009 world economic crisis that the goverment increased the amount of these loans to $350,000 and $500,000.00 in some circumstances.

How can you qualify for this program ? Most importantly , do you qualify ?

In general if you are a Canadian private company ( Public companies are excluded from the program ) you are eligible for the program , Only certain classes of assets can be financed .

The true power of the program is that the rates are currently in the 5% range, they are mandated under the program to be only 3% over prime . Terms of repayment are 5-10 years, and most importantly to company princiapals , a full personal guarantee of payment is not required .

Typically these programs are used by companies to acquire assets, improve their business, purchase or develop software, and even in some cases buy real estate .

Do Canadian business owners know that the government can assist them in purchasing business real esate , without unlimited guarantee, and at great rates ? We dont think so !

If businesses feel they are adequately prepared to source out the financing available under this program we strongly recommend that they begin that process. Not everyone has the time, financial skills, and the ability or comfort level to begin this journey . Those firms should seek out an experienced and trusted advisor in order to maximize their particpation in the program .

Lets get back to free money . Does it exist ? Again, not really, but would you as a business owner like to receive a chq from the govt, that is not repayable! regarding any process, research, or innovation you have developed .If so you want to maximize participation in the governments SR ED program . We will talk about this programme more in an upcoming article .

ABCP AND US!

Todays Globe and Mail had a front page story on ABCP . ABCP is of course Asset Backed Commercial Paper . The article centered around COVENTREE CAPITAL, who were apparently a major player in the market .

The company is accused of making misleading statements , according to the Globe, to investors who bought these securities . When the ABCP market froze a domino effect happend in the Canadian commerical paper market . I vividly recall meeting with Coventree in the 2004-2005 timeframe and asking them to securitze a transaction which for 20 Million dollars, which I ultimately completed with other parties . The demise of Coventree during last years debt crisis still has an affect on my firm today, as many of our lending partners rely on this type of financing to provide liquidty to the market . Ultimately key players disappeared , rates rose, and credit quality became ' job one '
Stan
http://www.7parkavenuefinancial.com/Home_page.html

SUBPRIME ,, CANADA , AND THE GOVT!

Very interesting article on Subprime today in the Globe and MAIL - See REPORT ON BUSINESS, GLOBE AND MAIL, PAGE 1 - ' LENDERS WANT OTTAWA TO BACK 1 BILLION FUND '

We have all read and heard that Canada for the most part escaped the sub-prime meltdown in the U.S. that appears to have led in large part to the Global financial crisis . Canada does have some sub-prime lenders who for the most part appear to be very well mangaged, two names that come to mind are HOME TRUST and XCEED mtge . The story in the Globe today revolved around a single mothers attempts to save her house, as well as comments from industry players around how these types of mortgages are handled and financed and originated .

The thrust of the article is that lenders want Ottawa to back these type of facilities with a govt sponsored fund, one assumes less people would lose their homes . I continually blog about how the govt should consider backing similar funds for small business financing access . Lets keep the faith .

Stan
http://www.7parkavenuefinancial.com/Home_page.html

CANADIAN SECURED CREDIT FACILITY

I read with amazement yesterday in the Post and Globe that the Govt and BDC had completed the first deal, 300m, under the CSCF as referenced in our title post .

While I applaud the deal Imust say that this is the ultimate 'too little, too late ' - To have completed only one transaction , and that one being to finance the captive arm of a foreign farm and construction company is surely a slap in the face for the thousands of small and medium firms who are hanging in through the current Canadian credit crunch .

At 7 Park Avenue Financial we continue to work hard everyday focusing on financing solutions for the little guy ( we finance the big guy also ) but we sure could you some help from Ottawa and Queens Park.
Stan
http://www.7parkavenuefinancial.com

My name is Stan Prokop - this will be my blog on Business Financing In Canada . My website is www.7parkavenuefinancial.com and our firm originates Business Financing for Canadian firms . We finance the little guy, and P.S. - We finance the big guy also!

I have written an article currently posted at http://www.ezinearticles.com which highlights the challenges in Business Financing for Canadian firms.