Navigate the Canada Small Business Government Loan - Successful SBL Financing

Updated: April 04, 2011

Let's get down to basics. Your first questions probably is - ' what is the Canadian government doing in the loan and Canadian business financing area?! ) That's a valid question of course. Industry Canada is the department that runs the program. The program has been around for many years and is designed to encourage ' financial institutions ‘to provide small business loan financing that they otherwise might not be able to do.

So who are these financial institutions? For the most part we're talking about Canadian chartered banks, although some business oriented credit unions also underwrite the program. That is where a lot of the confusion around the program exists - namely that while the government sponsors and in fact created the program it is administered on a daily basis by Canadian banks.

Why would the banks participate in the program? For the very simple reason that the Canada small business government loan, aka ' SBL ' has Ottawa picking up 85% of the tab if a loan defaults.

When we look at all the questions clients have around the program a couple common themes consistently come up - they are key issues such as ' How much can we get "(that's a very popular one!) as well as ' how does it work and what do I need to do to apply ?

Let's address the dollars in the SBL program. The magic number for the program is $ 350,000.00, but if you use it specifically for real estate the program actually can be up to $ 500,000.00.

Would any company or entrepreneur want to purchase real estate under the program? That may or may not be an attractive option - for example under the current terms of the program the monthly payment would be in the 7K per month range , so that would have to be weighed against other options .

So who uses the Canada small business loan, and why is it beneficial. The reality is that over 7 thousand firms used the SBL government loan last year alone, for financings approaching 1 Billion dollars. Funds for the program are geared toward two asset classes - equipment, and leaseholds. Your ability to finance leaseholds under the program is one of the best features of the program. as this asset class is very difficult to finance otherwise .

Most popular questions #2 about the program is simply ' how does it work - where do we apply ‘. This is where it falls apart for many entrepreneurs. They aren't prepared, spend days, weeks, and yes months stumbling through the program, and are frustrated if they are declined. They are simply astounded when we tell them a simple clean proposal, done properly can get the financing approved in 48 hrs.

Featured Research
  • 8 Ways Business Travelers Can Save with VoIP

    Do you or any part of your workforce travel for work, or even telecommute? If that answer is yes, then you should be utilizing mobile VoIP. With VoIP, businesses have been found to save as much as 40% on local calls and a whopping 90% on international calling expenses. more

  • Top 10 Contact Center Tools for an Unforgettable Customer Experience

    It should come as no surprise that consumers have only increasingly become less and less brand loyal in the modern age. In fact, 89% of them have switched brands within the last year due to a poor customer experience. One of the major steps to preventing this customer churn is to invest and invest heavily into improving your customers' experience. Now the major question to ask yourself is, "of all the contact center tools available, what are the ones that I should be utilizing for my business?" more

  • The Future of ERP

    Today's business decisions are data-driven and the difference between success and failure can be boiled down to utilizing the correct data. Now more than ever, companies have access to not only robust data but consumable data as well, through Enterprise Resource Planning (ERP) software. more

  • Video Conferencing Showdown

    With companies becoming more global and workforces becoming more remote, it should come as no surprise that the enterprise video market has exploded to its expected value of $32.57 billion by 2019. As you look for your video conferencing service, one of the main questions you should be asking is "should I invest in a cloud or on-site solution?". more

  • Making the Most of Contact Center Reporting Tools

    Modern contact centers generate and have access to massive amounts of data. Used correctly, this information can help you build out, improve, and/or successfully launch a contact center for your business. While having access to tons of data is great, it is essential that you know what data is important to you and how you can harness it to achieve maximum success. more