Loan Articles

Most companies need to get financing, whether to finance an expansion or to get a startup operating capital. Various types of financing are available to business owners in Canada, including government financing, loans, lines of credit, and credit cards.

The Canada Small Business Financing Program is one option for owners of small businesses in the country. The main goals of the program are to aid new and established businesses, create jobs by stimulating economic growth, and improve access to loans. Business owners can apply for financing if their gross annual revenue does not exceed $5 million. Farming businesses are not eligible under the CSBFP, as well as religious organizations, charitable organizations, and non-profit ones. All other businesses can apply for a loan of up to $500,000, with a maximum amount of $350,000 for improving and purchasing used and new equipment or improving leased properties and buying leasehold improvements.

Business loans from financial institutions are another option for business owners. Before discussing various alternatives, it is important to note that applicants need to present a number of documents that will persuade lenders that they are good risk. These include cash flow projections, a business plan, past business revenues, a statement of personal financial status, and a credit rating report. The business report shows potential lenders how the business owner is going to use the money. Cash flow projections present concrete
financial information to lenders, helping them assess the risks. Past business returns also give lenders a good idea of how a company is doing financially. The credit report reflects one’s payment history and helps establish one’s credit worthiness. Finally, one’s personal financial status statement is a list of debts and assets that allows lenders to make a better judgment.

Keeping these in mind, business owners can look for financing from various banks in Canada, and a first stop may be their local bank or credit union. If you are a client of the Royal Bank of Canada, for instance, you can apply for term loans and operating lines of credit. If your cash flow needs are over $5,000, you can apply for a line of credit. The line of credit is extended in Canadian dollars only. Term loans are offered for the purpose of business expansion, and you can choose between variable and fixed interest rates. Funds are available in US and Canadian dollars. Fixed rate loans are in the amount of $10,000 or more while variable rate ones start at $5,000. The bank also offers Business Insurance plan, helping business owners protect their family and employees.

The Canadian Imperial Bank of Commerce also offers lines of credit and business loans to business owners. The bank promises a hassle-free application process, competitive pricing, fast approval, and flexible options. Applicants can choose between fixed- and variable-rate loans, variable-rate credit lines, or a combination of the two. Lines of credit and business loans are available to applicants who need to borrow between $100,000 and $250,000. This amount is also available in US dollars to applicants who seek to meet their operating needs, support cash flows, or purchase equipment. To get approved, applicants should have at least twenty percent ownership in certain business. Once applicants send their application and all required documentation, they can expect to receive the bank’s decision by the next working day.