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Virtual Accountant | Canada Small Business Financing Program
Often, business owners need additional financing in order to grow their business either by purchasing equipment, or making leaseholder improvements in their business says virtual accountant. However they have already maximized how much financing they qualify for, or they have been in business for a few years, and are no longer qualify for traditional loans. Entrepreneurs need financing in their business, and have been turned down for more traditional loans, there are options that they can consider that can help them get financing in order to grow their business.
That is much easier for businesses to qualify for is the Canada small business financing program. Virtual accountant recommends this loan because businesses who have been turned down for other traditional loans are often able to qualify for this loan. The reason for that is because the federal government is guaranteeing the loan. Since the bank knows the business owner is never going to default on the loan, they are more willing to loan businesses the money.
Although banks are almost guaranteed the money back, this still means that some banks still donít want to help businesses qualify for the loan due to the amount of paperwork thatís involved says virtuals accountant. Since the bank must coordinate with the federal government when arranging the paperwork on this, it means that banks arenít able to set their own policy even though the bank is the one doing all of the work. Since this type of loan often is outside of the bankís typical procedures, they are less enthusiastic to accept this type of loan. While they canít deny the loan outright, they set terms that are less likely to be advantageous for business owners to take.
There are certain things that are more likely to accept businesses that are applying for Canada small business financing program loans and those are usually small credit unions or smaller banks. Virtual accountant says that in Alberta that usually means that service credit union for ATB are the two banks that are most likely to do the paperwork to allow businesses to qualify for these loans.
Although a wider variety of businesses are able to qualify for this loan, there is a limit on what can be financed. Virtuals accountant says that up to $350,000 can be loaned in order for businesses to purchase hard assets such as vehicles or equipment and leaseholder improvements. And up to $1 million for real estate purchases, or combination of real estate and hard assets.
By understanding all of the options that exists when it comes to financing their business, business owners can utilize the Canada small business financing program in order to help their business purchase the assets or real estate they need in order to grow their business. This is very beneficial for entrepreneurs who are having trouble qualifying for traditional loans, or business owners who fall outside the scope of base lending policies. Since entrepreneurs often run into cash flow problems, this can significantly help entrepreneurs in their business.
When a business owner starts their business, they should realize that it will be far easier for them to qualify for loans for assets rather than operating capital says virtual accountant. Because of this, business owners should finance assets whenever possible, so that they can keep all the cash that they have in their business as operating capital. Because of this, some business owners may find it is difficult for them to qualify for loans and to purchase assets in order to help grow their business. Since half of all entrepreneurs who open their business and up closing him within five years, and 29% of entrepreneurs who failing business say that the reason they failed was because they ran out of money.
Businesses who have a hard time qualifying for traditional loans, even though they need to purchase assets or real estate in order to help grow their business, should know about the Canada small business financing program. Virtual accountant says this program can qualify businesses for loans that are backed by the federal government. There is a wide threshold of businesses that can qualify for this type of loan, any small businesses that have up to $10 million in revenue can qualify. Since this is being backed by the federal government, business owners that have been turned down for more traditional loans, are often able to qualify with this program. This is especially fantastic for entrepreneurs who need to fund risky projects, or they donít have as great a history in their businesses, and therefore banks are less likely
Itís important that business owners understand what can be financed with this program says virtuals accountant. Businesses can get financing for hard assets and leaseholder improvements as well as land, as long as the real estate is used in an act of business. This leaves a wide variety of things that are not allowed to be financed with this program says virtual accountant such as advertising and marketing like websites, or using the money for payroll or operating capital. Businesses can get financed up to $350,000 for hard assets, or up to a maximum of $1 million for real estate, or a combination of real estate and hard assets.
Business owners should understand that even though itís easier to qualify for this loan, and the government is backing the loan, this doesnít mean it is as zero risk loan. Banks can still request security on this loan including a personal guarantee on the entire amount. Because of this, if the business owner defaults on the loan, the bank may go after the business owner or the government.
Business owners who would like to increase the odds of qualifying for loans in order to grow their business should investigate the Canada small business financing program because those loans may be a great option for them to finance but they need in order to grow their business.