Canada Small Business Financing Program

Canadian Small Business Loan Program

From the CRA site:

The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

Term loans can be used to finance the following costs:

  • purchase or improvement of land or buildings used for commercial purposes
  • purchase or improvement of new or used equipment
  • purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant
  • intangible assets and working capital costs

Lines of credit can be used to pay for working capital costs, that is, day-to-day operating expenses of the business.

The maximum loan amount for any one borrower is $1.15 million.”

As an SMB owner, this sounds terrific, doesn’t it? …not so fast.

There’s a link on that page, entitled Toolbox for Lenders, that specifies qualification criteria.

Net: if you can’t qualify for a bank loan on your own, this program is unlikely to help you.

Talk to us: we can help provide the interim financing you need.

Bank Loan Loss Provisions Up

loan loss provisions

In this morning’s Globe and Mail, James Bradshaw reports ‘Scotiabank’s fourth-quarter profit slips on higher costs, increased loan-loss provisions.’

In his report, Bradshaw notes that “Provisions for credit losses spiked from ultralow levels last year”.  He goes on to note that “Scotiabank continued to face pressure on its profit margin on loans, with its net interest margin down four basis points”.

So what does this mean for SMB’s access to capital going ahead (even if you don’t bank with Scotia)?  We see at least the following key issues:

  1. Your rates will likely be going up on your next renewal
  2. It may be tougher to qualify for a loan
  3. If you don’t have your ‘ducks in a row’, you can expect to pay even more (see how we can help you)

Let’s talk about your financing requirements, and how we can help:

Retirement Readiness Calculator

retirement calculator for smb owners

SMB owners are notorious for ‘kicking the can down the road’ on the subject of retirement readiness.

Too many priorities?

This worksheet is a useful tool to get a sense of where you are now, and where you need to be:

Please note that this is provided for information only, and is not to replace the work of a Certified Financial Planner…just to get you thinking about retirement, so that you can be inspired to kickstart your business.

What’s Your Business Worth?

business value calculator

A key component of the net worth of any SMB owner is the value tied-up in their business.

While most people have a good idea of their personal net worth, its easy to overlook the potential sale value of their business.

This calculator (presented for information purposes only) will give you a sense of the value of your business on the open market:

Use this information to build the value in your business!

Trouble with Rent?

business rent

Gus Carlson published a fascinating article in The Globe and Mail on November 4, 2022, titled Small Businesses Defaulting on Rent are Canaries in the Coal Mine for North America’s Economy.

  • The article cites compelling research indicating that 37% of US small businesses had difficulty paying their rent in its entirety in September (up 7 points)
  • The situation in Canada is worse, where 42% of small businesses could not make their October rent (toughest hit were small businesses in BC, AB, and ON)

Carlson states that the cause is due to cumulative effect of ongoing inflation (and its effect on rent, gas, and core supplies), which has offset sales gains, all against a backdrop of slowing sales.

There’s much more to the article, and I highly recommend that you follow this link to read the complete article here:

If you’re struggling to make ends meet – contact us, because we can help:

A 7-Point Strategy to Improve Credit Score, to Help Your Business

the importance of a good credit rating, and how to manage it

Everyone knows that cash flow is the lifeblood of small business.

Fair or not, cash flow very often relies on the personal ability of the principal owner of the business’ credit rating.

Even for incorporated businesses, the thinking goes that the business will behave as a credit entity in the same – or similar – way as that of the owner of the business. If the owner of the business has a less-than-ideal credit score, the business pays a higher interest rate, has to work harder at sales (just to break even), and is on a faster-than-necessary, less-efficient treadmill.

All because of a less than ideal credit score.

Here’s a strategy to get a grip on your score, and improve it as quickly as you can: 

  1. Contact Equifax and TransUnion (the two leading credit rating rating agencies in Canada), and order a detailed copy of your complete credit files. Be prepared to pay a nominal amount to get this vital information.
  2. When you receive your credit reports – go through them in detail: is there evidence of identity theft, fraud, or debts, missed payments, purchases, or other entries that are not yours? If so – contact the agency ASAP, and begin an investigation (this could take a few months to resolve).  Ask to have resolved variances removed from your report.
  3. Take a look at the number of credit cards you have, and the aggregate credit limit that you hold.  Do you really need this amount?  Start cancelling cards if you can, as this will signal to credit bureaus and responsible lenders that you are a responsible-with-credit borrower.
  4. Manage your credit card balances, so that they don’t exceed 30% of your available credit.  This also communicates responsibility. If you are offered to increase your credit limit, do so only with this as a guideline.
  5. Pay down your revolving credit card balances, and pay more than the minimum amount every month – this communicates to the credit bureaus that you take credit risk seriously, and your score will rise.
  6. Check your credit report once per year, and run-down any variances. Ask to have resolved variances removed from your report.
  7. Limit how frequently you apply for new credit.

We can help you get a grip on your business’ finances so that you can be positioned for growth.

We’d welcome a coffee-talk.

The Impact of Un-Managed Debt

managing debt

Small businesses can have access to more debt than they realize – and it can slowly crush them if they’re not aware of its scale.

In very general terms, there are three categories of debt: low, medium, and high interest.

Challenges arise in understanding the type of debt that you hold, and the amount in each category – use this worksheet to get a grip on your debts.

The real eye-opener comes on the bottom line, when you realize how many incremental sales dollars are required to offset your cost of debt.  This, in very real terms, is a duplication of marketing dollars.

If your business is struggling with debt, we can help right the ship.  Contact us using the form below.

Good News Over the Horizon?

Business Outlook from Bank of Canada

Well, maybe good news is a bit too optimistic, but today’s 50 basis point increase from the Bank of Canada can be interpreted positively.

Here’s why:

  • The increase was widely expected to be much higher: this relatively modest increase signals that the Bank of Canada is satisfied with their progress slowing inflation down
  • The lower rate will trickle through to any debt you hold – it’ll still be more expensive, just less so

So, let’s hope!

Need to adjust your plan for changing economic environment? We can help…

7 Items To Consider to Manage Small Business Debt

managing debt

Small business financing can be a tricky thing.

On one hand, there are tons of options available, from government loans (sometimes) to secured loans, lines of credit, merchant cash advances, unsecured loans, credit cards, and many others.

All have one thing in common: they are debt financing.  And debt carries a cost.

Two years ago, the cost was low.  Now, as we all know, debt financing is becoming more expensive (due to rising interest rates across the globe).

…so what can a small business with debt – or about to take on debt do about this?

  1. Acknowledge that while debt is a growth enabler, it is also an expense.  Manage the expense the same way you’d manage any other expense like (say) office supplies – that is to say: budget for it.  The moment that it gets too expensive, cut it (just as you would office supplies).
  2. Start by developing a process to manage debt: lay out your debts on a spreadsheet, along with amounts, interest rates, and due dates.  Prioritize cutting the highest interest items with the furthest-out due dates first, as these will be the debts that will sink your business.
  3. Get a business plan together.  Identify your strengths and opportunities, and look for ways to increase sales with little or no effort (eg: add-ons at close, marketing automation, expanded virtual inventory line, more effective social campaigns, etc.)
  4. Focus on driving sales, and accelerate debt paydown with the incremental profit realized.
  5. Focus on cutting costs elsewhere in the business – every penny counts – optimize everything, and move savings toward debt pay-down.
  6. Take a look at your credit rating: run down any discrepancies, assuring that you have the highest possible credit rating.
  7. Talk to your banker – (we can help) – take in your revised sales plans and your optimized expense management routine, and look into a loan to consolidate the high interest debt that you’re carrying, and present an accelerated payback/cashflow projection

If you can’t get a loan – and you need one – we can help.

You don’t have to go it alone.

Let’s talk:

Holding Out for a Grant? …don’t hold your breath.

financing via grants

Wouldn’t it be terrific if an unlimited supply of government funds were available just for the asking, when our businesses get into rough waters?

Other than in very rare circumstances – such as those triggered by Covid – there’s very little, if any on-going grants available for businesses to carry on their day to day business (in Alberta, where we’re located at least).

For clarity: if you’re searching for a grant to help you cover your cash flow because of tough times, well, you won’t find one.

You will however find employment-related/growth-related grants that carry narrow qualification provisions, some of which are listed here:

If you’re looking for financing, and can’t find a grant to cover your needs – we can help.

We provide financing support for small Canadian businesses by way of unsecured loans, secured loans, merchant cash advances, and lines of credit.

Click here to request a quote!