Small Business Loans
So you have decided to make your dream for your own small business a reality. You have the ideas, the skills and the dedication for your business to be a success. Now all you need is a way to fund your small business. The government in Canada want to stimulate the economy. They know that one way to do so is to fund small business. They offer business grants and low or no interest loans.
Each year they set aside billions of dollars to help fund small businesses. They help individuals to start new businesses. They also help to fund the expansion and improvement of current small businesses. Successful small business will contribute to a strong economy.
How can you and your business benefit from government funding through federal and provincial resources? You can take advantage of grants. If you quality for grants, the money does not need to be paid back. Your business may be eligible for low or no-interest loans. You can access government information and services.
Small business owners can benefit from the Canada Small Business Financing Act. Under this act, the federal government shares the risk on loans make by the lending organizations. The act applies to loans
up to $250,000. This is for Canadian businesses with annual gross revenues of five million or less. The Canada Small Business Financing Act applies to loans for the purchase or improvement of eligible assets. It applies to loans
with terms of up to ten years.
If you are going to apply for a small business loan
, it is best to be as prepared as possible. You will want to have a business plan. The plan should be used to show the lender that your small business is well thought out, why you need the loan and what you will do with the loan. Having a good and well-organized business plan is critical when applying for a small business loan
. Your business plans should also include cash flow projections. The lender will want to see that you will be able to repay the loan.
A potential lender will also want a statement of your personal financial status. They will need to know your personal assets and debts. You may also need to present past business tax returns if it is not a new business for which you are applying for a loan.
If your small business already has established some good credit
, that will help you search for a small business loan. For example, if you have accounts with suppliers and have established a history of always paying them on time, without problems, this will help your business. Your own personal history (as the owner) can also affect your search for a business loan. As with any loan, you may want to order a copy of your credit rating before applying. This provides you with an opportunity to see what the lender will see. You can also find any errors on your credit report
and dispute those errors before applying for a loan.
Be well prepared when you go to apply for a business loan. Make sure your business plan is well organized and goes into enough depth. Do not forget to include financial statements and forecasts in the business plan. Good luck!