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Business owners that have been turned down by their thanks for traditional lending can find out about the Canada small business finance program that can help them secure loans as long as there a small business thatís making less than $10 million in revenue each year. The reason why this is an option, is because it is a program put on by the federal government, which lets the government act as a guarantor for the loan. Banks that have previously turned it down businesses for loans, maybe consider once they understand that the federal government is going to be guaranteeing the loan says virtual accountant.
The businesses that qualify for this loan small businesses that make less than $10 million in revenue each year. This is intentionally wide threshold of businesses that can qualify, in order to allow the government to help as many businesses as they are able to. Virtual accountant says that this loan can give entrepreneurs up to $350,000 for asset and leaseholder improvements, or up to $1 million for little states, or combination of real estate and asset purchases. Even though this loan is for hard assets which include vehicles and equipment, leaseholder improvements and land, business owners should also understand that there specifically they cannot finance anything outside of the scope. This means operating capital, payroll, websites and advertising and marketing.
Business owners should budget that there is interest on this loan which is prime plus 3%, which what makes the interest rate on this loan currently 6.5%. Of course, the interest rate fluctuates as prime fluctuates. The application fee is 2% and is one time only in the first year. Virtuals accountant says that this is a very decent amount, while they might be able to get a better interest rate application fee, itís less likely to have been turned down for traditional financing.
The best way to qualify for this loan, is for business owners to work with the virtually accountant and the first step is to create a business card. This can help businesses qualify for the loan, but once they qualify it can business owner know that thereís a plan in place on how theyíre going to pay that loan back once they are approved for the loan.
A typical problem that virtual accountant sees, is when business owners approach them and say that they are running out of cash in their business. Businesses may find itís difficult to finance operating capital that it is assets, which means itís extremely important that business owners finance assets whenever they need to buy them, even if they have the cash in their business. The reason for this, is because if business owners use financing, will be able to keep the cash that they have their business in their business. As Robert Kiyosaki, author of Rich Dad Poor Dad said, ìgood debt is a powerful tool, but bad debt can kill youî. By utilizing financing in order to purchase assets even if a business owner has the cash in their business, can help them utilize good debt is a tool, that can help them avoid running out of money in their business.
In order to help business owners achieve this, virtually accountant says entrepreneurs need to hear about Canada small business financing program, that can help business owners qualify for loans for assets, leaseholder improvements and real estate. The reason why this loan works, is because it is effectively being backed by the federal government, who guarantees the loan. Loan money on this program simply because there is high amount of paperwork. That paperwork means that they often have to go outside their typical processes in order to qualify and process the loan. That means, business owners may want to start by approaching small unions or small banks. Virtual accountant recommends ATP or service credit union is a place to start.
Entrepreneurs should understand there are specific things that can only financed by this loan. Hard assets such as equipment vehicles, leaseholder improvements and land, as long as the land is being used in an active business. This means there are certain things that cannot be financed says virtually accountant including websites, payroll, advertising and marketing as well as operating capital. Business owners can get up to $350,000 for assets, and or up to $1 million for real estate, or a combination of real estate and assets.
Business owners need to understand that they will be interest on the loan which is prime +3%. As prime fluctuates, so does the rates. Which makes this rate not necessarily a lower weight, but also not a high rate either says virtually accountant. Business owners should consider this a very decent midrange commercial loan rate. The application fee is also 2%, which is only on the first year which is to help pay for the amount of time taken to process and qualify the loan.
As with many others loan, business owners should work with their virtual accountant in order to create a business plan that can help them not only get approved for the loan, but can also help them know that there is a plan to pay back the money if they do get approved.
