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Working with their virtual accountant, business owners can implement this strategy and utilizing federal programs such as the Canada small business financing program. This federal government program helps small businesses qualify for loans by acting as their guarantor. Businesses who otherwise wouldnít qualify for loans can qualify for these one so much easier. This is great for businesses that have maxed out their previous loans, they donít have a financial history in their business because there so new, or their proprietors of the whiskey business, or they are trying to fund risk year projects.
When the main setbacks that business owners may find what this federal government program, is that there is a significant amount of paperwork that banks may not want to work on. In addition to that, virtuals accountant says that banks must also coordinate with the federal government and often work longer on this loan and work outside of their businesses mandate. One way around hand, is if business owners can approach credit unions and smaller banks, they often have a different mandate and can work outside of their bankís scope, in order to qualify loans. In Alberta, that means that businesses should approach ATB, or Servus Credit Union fi Sonata business owners are convinced that this is the way that they should operate, the next thing they need to know is what they are able to get financing on. While they canít get financing on things like advertising or marketing, operating capital paying their payroll, or building a website, business owners can utilize the money to purchase almost any hard assets they need including vehicles or equipment and they can also use the money for leaseholder improvements. For those things, business owners can get up to $350,000 and business owners can also purchase real estate as long as itís going to be used for business and secure $1 million says virtual accountant.
The three main challenges that businesses that operate in Canada says they will face that will cause significant problems for businesses is: not being able to attract customers, and not being able to find the right team, and running out of money says virtual accountant. Since half of all entrepreneurs that open their business will close them again within five years, one of these three reasons is the reason why. If businesses are running out of money in their business, they can use some strategies in order to avoid that. By utilizing that is a powerful tool as discussed by Robert Kiyosaki in the book dad poor dad, ìGood debt is a powerful tool, but bad debt can kill youî. By using financing to purchase assets in order to leave cash in the business for operating expenses, business owners can utilize financing is a powerful tool to help their business.
Many businesses that are utilizing this method may discover that it becomes increasingly more difficult to qualify for loans once they are in operation for a while, so thatís where the Canada small business financing program comes in handy. Virtuals accountant says that small businesses making under $10 million a year in business can apply for this loan that is backed by the federal government. The federal government acts as the guarantor for the businesses loan, ensuring that banks that previously turned down businesses for loans, may reconsider their position knowing that they are guaranteed to get their money back.
Even though this is a government-backed loan, entrepreneurs need to understand that it is not guaranteed loan. They need to be able to work with their virtual accountant very closely in order to ensure that they have their loan application filled out properly, and that they have been proactive enough to create a business plan. Itís extremely important that entrepreneurs utilize a business plan in order to help get approval for loans, to show the bank that they are proactive and have plans in place. Not only can help businesses get approval for loans, business owners can also be relieved and understanding that in that formal business plan created by their virtuals accountant, business owners will have a plan on how to pay that loan back once they are approved for it.
Business owners can expect standard interest rates and loan application fees on this loan, which is not an extremely low amount, but itís also not high either. Virtual accountant says that the Canada small business financing loan comes with an interest rate that is prime plus 3%, which currently sits at 6.5%. As prime fluctuates so does the rate. The application fee is also 2% on top of that, and is only charged in the first year and itís used to help cover the cost of processing the loan.
