Facts About Small Business Loans

Facts About Small Business Loans

 

At A R Business Brokers, we know that small business loans can be extremely helpful to people who are considering purchasing an existing business or starting a new one. In this article, our team would like to share some important facts to help you better understand how these loans work and how they can help get your new business off the ground.

What is a small business loan?

A small business loan is funding provided by the Canada Small Business Financing Program (CSBFP).

The CSBFP program works with financial institutions (banks, credit unions, etc.) to provide funding to support the startup of a small business.

Added Benefit: In addition to providing funding, the CSBFP shares the risk of your loan with the lenders. This means that the government is underwriting your loan so that you can receive funding without using personal assets (like your home) as security.

Am I eligible to receive a small business loan?

There are specific conditions that must be met in order to be eligible for a small business loan.

Key conditions include:

  • The business must be located in Canada and must carry out its services in Canada.
  • The business must offer its services/products to the public.
  • The business must intend to make a profit or acquire material gain.
  • The business must have a gross revenue of less than $10 million.

How much money can I receive and what can I do with the loan?

Eligible small businesses that include property may receive up to $1 million. There is a maximum of $350K if the business doesn’t include property and is in a leased premises.

Loan funding can be used in a variety of ways including:

  • Purchasing or improving land or buildings used for commercial purposes.
  • Purchasing or improving new or used equipment.
  • Purchasing new or existing leasehold improvements — these are typically renovations made to a leased property by a tenant.

Items ranging from restaurant cooking equipment to computers can be financed with CSBFP funding.

Small Business Loan Considerations

There are many things to keep in mind when applying for a small business loan — from business plans, to taxes to lease agreements, to legal documents. You’ll want some expert help.

For more information, click here to go to the Government of Canada’s Small Business Financing Program page.

A R Business Broker clients will help to connect you with expert lawyers, accountants, and mortgage brokers to answer all your questions. We work with the following firms and individuals on a regular basis:

Mortgage Brokers/Financial Institutions*:

*Mortgage Brokers & Accountants ONLY for Business Plans and Due Diligence.

Lawyers:

Accountant/Tax Advisors:

For more information about buying a small business, contact A R Business Brokers. We’ll help you acquire the business of your dreams.