J
jayz06
Hello All, I need some help and info on acquiring a small business loan from the govt, around 250- 300 thousand. Any advice and help please.
thank you
jayz06
thank you
jayz06
BDC will fund tangible assets ie machinery but its tough to get them to part with money for intangibles ie R&D and goodwill (if you are purchasing an existing business).
Easiest way to get money is to go to your bank and arrange for a line of credit using your house as collateral.
Easiest way to get money is to go to your bank and arrange for a line of credit using your house as collateral.
Maybe if you're putting up an equal amount they might match it. I would recommend approaching the gov't first and finding out exactly what their criteria is and what you will be required to provide. Then get a business plan together.
1. Harder than it used to be:TheNiteHwk said:
http://www.cbc.ca/news/background/groupaction/index.html
p.s. Venture capital is hard to come by in Canada, under 2M
IMHE. In my humble experience.
I have found that the government spends $5 to loan out $1. They will tell you all sorts of things even when you have no chance of getting a loan. I suspect that they will loan you money under some circumstances. You will have to acheive some sort of success on your own and then you may be considered for a loan. Getting contracts, letters of intent is your best bet to getting any loans.
I have found that the government spends $5 to loan out $1. They will tell you all sorts of things even when you have no chance of getting a loan. I suspect that they will loan you money under some circumstances. You will have to acheive some sort of success on your own and then you may be considered for a loan. Getting contracts, letters of intent is your best bet to getting any loans.
Just gone throught the process....
First, and most importantly, you need a detailed business plan with a minimum three year projection - five is strongly suggested. The banks will look at the business plan and then decide if they want to extend a small business loan. These loans are part of a government project but are at the discretion of the financial institution you wish to deal with. These loans will only be for up to a maximum of 90% of the required capital to start your business. You must be able to put up the initial 10%. In your case, 25 - 30k. If you dont have it, forget about applying. They will then deduct 7% as they do not cover the GST, you do. They really do put you through the ringer.
As for the BDC, they will only finance up to 100K but they will finance working capital such as wages, materials, lease expenses etc. They will want to see that you have an approved Canada Small Business Loan first. Otherwise, their ringer is tighter than the banks.
I suggest you do the business plan and then visit both. The banks will only loan up to 250K and the BDC up to 100K. If your plan is good enough and you have 10% as start up capital then you may be in business.
But remember, they will both insist that you sign a personal guarantee for the money so that if the business fails, you are still on the hook.
Good Luck with the venture!!!!
First, and most importantly, you need a detailed business plan with a minimum three year projection - five is strongly suggested. The banks will look at the business plan and then decide if they want to extend a small business loan. These loans are part of a government project but are at the discretion of the financial institution you wish to deal with. These loans will only be for up to a maximum of 90% of the required capital to start your business. You must be able to put up the initial 10%. In your case, 25 - 30k. If you dont have it, forget about applying. They will then deduct 7% as they do not cover the GST, you do. They really do put you through the ringer.
As for the BDC, they will only finance up to 100K but they will finance working capital such as wages, materials, lease expenses etc. They will want to see that you have an approved Canada Small Business Loan first. Otherwise, their ringer is tighter than the banks.
I suggest you do the business plan and then visit both. The banks will only loan up to 250K and the BDC up to 100K. If your plan is good enough and you have 10% as start up capital then you may be in business.
But remember, they will both insist that you sign a personal guarantee for the money so that if the business fails, you are still on the hook.
Good Luck with the venture!!!!
Even if you have an amazing business plan, it is highly unlikely that a bank or the BDC would fund you if you do not have collateral equity like a home worth the size of your loan. Also, as another poster said, traditional banks would primarily loan against assets like machinery, so if you go bankrupt they can get at least some of their money back by putting the asset up for sale. They will not fund working capital items like salaries, advertising, rent, phones, internet access, etc...
The government does have various programs that will give you money for these things but you have to qualify, and they are for very specific reasons. That is, the government likes to support and foster various industries. If you're going to start up a video-game company, you can probably forget it - videogames do not help the social fabric of the country. However, if you are going to start-up an alternative fuel cell company (which benefits the environment and is an "emerging industry"), and you've got a great idea and business plan, then - if they have a program for fuel cell industry growth - you may get a grant that way.
Good luck
The government does have various programs that will give you money for these things but you have to qualify, and they are for very specific reasons. That is, the government likes to support and foster various industries. If you're going to start up a video-game company, you can probably forget it - videogames do not help the social fabric of the country. However, if you are going to start-up an alternative fuel cell company (which benefits the environment and is an "emerging industry"), and you've got a great idea and business plan, then - if they have a program for fuel cell industry growth - you may get a grant that way.
Good luck
My company operates in the financial services industry and provides business plans, management consulting and strategies for small to medium-sized businesses for outrageous fees.
It is true. Unless you have generally a third to half of the capital required, the banker will look at the cover of your business plan, tell you to come back at a later date, and chuckle and guffaw behind your back in the meantime. When you do come back, he will very contritely and apologetically turn you down.
This is the financial climate we are in. It really pisses me off that large companies have access to large amounts of cash with little or no collateral when a small guy has to collaterallize his house, investments, business and have to buy insurance to cover a loan of $200,000 to $300,000. For instance, General Motors will have no problem with its bankers to cover the continuous losses in its auto operations. In fact, a banker once told me that very large loans to large corporate entities are secured mostly on signatures only.
It is true. Unless you have generally a third to half of the capital required, the banker will look at the cover of your business plan, tell you to come back at a later date, and chuckle and guffaw behind your back in the meantime. When you do come back, he will very contritely and apologetically turn you down.
This is the financial climate we are in. It really pisses me off that large companies have access to large amounts of cash with little or no collateral when a small guy has to collaterallize his house, investments, business and have to buy insurance to cover a loan of $200,000 to $300,000. For instance, General Motors will have no problem with its bankers to cover the continuous losses in its auto operations. In fact, a banker once told me that very large loans to large corporate entities are secured mostly on signatures only.
Very true, if you are a publicly listed company, it is much easier to borrow $$$, but regulatory compliance is getting very expensive...The Brus said:
Regulatory compliance really doesn't have a lot to do with a bank loan. They are two different animals with their own special pratfalls. In our experience, being on the Board of Directors of a publicly traded mining company has provided us with interesting experiences. The Exchange that handles our share trading is relentless and unforgiving when it comes to timely financial data and reporting. We have been suspended from trading in the past due to missed deadlines and late reports. In addition, when we ran into financial difficulties due to operational problems at one of our mines, we had to disclose this problem to the public via press releases. When this happened, the bank was also not so forgiving. It wanted its money back.
Heck, I don't blame the banks. Every joe-schmoe thinks his idea is the next big thing and that banks should be kicking in his door to loan him money. I don't think it's out of line at all to ask an entrepreneur to come up with a sizeable chunk of cash to back his new business. If he's not able to do that, what else won't he be able to do?...
Keebler Elf
You are absolutely right. The bank has been very good to me in past years. In fact, too good to me. In the early eighties, the banks decided to concentrate their lending in centralized "business" branches. No longer was the friendly bank manager able to loan you a wad of cash on your signature only. You had to face the Inquisition at the "business centre" and he would forward your stuff to some gnome in Montreal or wherever the palace stood. The problem was that you could never build any rapport with the bank anymore by plying the manager with gifts, free meals and trips to the local strip joint for lunch.
Now, many years later, I wish the bank had been stricter, as it is now. I would not have this mountain of debt piled on my back that never depletes and I would not be getting all of these threatening phone calls.
I wish I had used more of my own money, rather than borrow. When you borrow, unfortunately, they want you to pay it back sometime.
As an individual who is asked by friends to lend them money, you are right. Why would any sane individual lend their hard-earned money if you won't put any of your own. Adn more importantly, how are you going to pay it back?
You are absolutely right. The bank has been very good to me in past years. In fact, too good to me. In the early eighties, the banks decided to concentrate their lending in centralized "business" branches. No longer was the friendly bank manager able to loan you a wad of cash on your signature only. You had to face the Inquisition at the "business centre" and he would forward your stuff to some gnome in Montreal or wherever the palace stood. The problem was that you could never build any rapport with the bank anymore by plying the manager with gifts, free meals and trips to the local strip joint for lunch.
Now, many years later, I wish the bank had been stricter, as it is now. I would not have this mountain of debt piled on my back that never depletes and I would not be getting all of these threatening phone calls.
I wish I had used more of my own money, rather than borrow. When you borrow, unfortunately, they want you to pay it back sometime.
As an individual who is asked by friends to lend them money, you are right. Why would any sane individual lend their hard-earned money if you won't put any of your own. Adn more importantly, how are you going to pay it back?
