Canada Small Business Financing Program Loan Registration for Start-up

By | October 22, 2018

Apply for Business Startup Loans Canada – Guidelines for Registration

Apply for Business Startup Loans Canada

Financing for your new start-up or established small business is tough to manage. Here we will check Canada small business financing act loan registration form and business startup loans guidelines. Banks or other financial services are not that eager to provide a loan to finance small business. Family or friends might not have enough capital to support the financial need for your business. However, you don’t need to disappoint, Federal Government of Canada runs Small Business Financing Program that makes financing easier for start-up as well as established small businesses.

How Much Financing is Available?

Under the Canada Small Business Financing Program, you can get financing up to $1,000,000 for any one borrower. Out of this money, only $350,000 can be used for improvement of leased property or equipment.

What is the eligibility for the Canada Small Business Financing Program?

Start-ups or small business of profit in Canada having gross annual revenue up to $10 million can qualify for this financing program. Farming businesses or business related to farming industry, non-profitable organizations, religious organizations or charitable organizations are not eligible for financing under this program; there are some other financing options available to them.

What can be financed under Small Business Financial Program?

The financing offered can be used for specific purposes only. The loans provided can be used for

  • Purchase of land or real property used for commercial purposes.
  • Purchase of leasehold or improvement of it or renovations of leased property.
  • Purchase of new equipments or improvement of existing equipments such as commercial vehicles, computers, software, telecommunications equipments, manufacturing equipments etc.

You can’t use the loan for working capital, inventory, fees for franchise, research and development work etc.

How to Apply the Canada Small Business Financing Program?

It is easy to apply for the federal small business loan. The program is administered by Industry Canada and delivered through local financial institutions such as bank, caisses populaires or credit union. You just need to contact the finance officer, discuss your business needs and fill out necessary application forms. The financial institution officers will review your application and if approved, fund will be disbursed.

What Are the Costs such as Interest Rates & Fees?

The lending financial institution determines the interest rate for the loan and it can be variable or fixed. The variable interest can be maximum lender’s prime lending rate plus 3%. The fixed rate can be maximum residential mortgage rate plus 3.

2% of total loan amount is to be paid as registration fee.

What are the terms for the finance?

Borrower has to provide collateral. If it doesn’t suffice the requirement, the lender may ask for additional unsecured personal guarantee.

If you are looking for financing for your established small business or new venture, you can consider the option of Canada Small Business Financing Program. The program is accessible with few constraints and borrowing costs are quite reasonable!

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