Let's get that ' medium' size out of the way quickly before we begin. To qualify and receive the Canada SBL loan you must have actual or projected revenues less than 5 Million dollars per annum. That covers a lot of our clients, so it is easy to see why they are genuinely excited about this often misunderstood part of the Canadian business financing landscape.
Let's set some groundwork here. We're going to cover off whats important to you - so pardon us for paraphrasing typical questions we receive everyday on this program. What are those questions -? They are as follows: Why have we not heard about this program, who manages the program, how much can we get, and what do we need to do to qualify.
We think you'll agree that if we cover off all those bases you'll be well grounded in determining if the Canadian small business loan, aka the ' government SBL ' is right for you.
So, first question. Why haven't you heard about the program? Quick answer - we're not sure, because 7441 of your peers and, worse yet, your competitors took advantage of the program in 2010. Oh and by the way, they got loans totaling $ 957,000,000.00. That's an average of about 128k per loan, but most of the requests we see tend to be in the 200-300k range.
You also may not have heard about the program because of its unique structure. It's sponsored and mandated by the folks at INDUSTRY CANADA in Ottawa... but you don't need to drive there to get the loan. The government has mandated Canadian banks to offer the loan under the terms and conditions of the program.
Which brings us to a side point which is that we're often asked why many small business and commercial bankers don't talk up or offer or recommend this great financing strategy for business loans. We suspect, and surely they can't be proud of it, that many bankers either haven't taken the time or have had the training to facilitate this loan properly... we suspect they would prefer to sell us a mutual fund or mortgage. Anyway, we'll weigh in on that one another day.
So, how much financing can you get under the program. The program actually goes to $ 500,000 but that is if it is a real estate type deal. Typically the program caps out at $ 350,000.00 for 99% of business owners.
Many clients are disheartened to hear the loan is not a ' cash loan ' or a revolving line of credit. It isn't - it's a term loan with very attractive rates, and can be used for equipment, leasehold improvements, software, etc.
If we had to identify two quick qualifiers for the Canada Small business loan it would be a reasonable credit history of the business owner, as well as a properly prepared package.
The 'package ' i.e. your proposal, has been the downfall of many clients we have spoken to who have ventured on their own to get the SBL loan approved. They simply aren't prepared on some key basis, such as a executive summary, business plan, cash flow, etc. ( Banks for whatever reason love to see how they will get repaid!)
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