I caught up with my business banker yesterday and talked about the Canada Small Business Financing Loan program (CSBFL). Wanted to share an overview and details here.
It's not a good fit for share acquisitions but could be useful for smaller asset acquisitions or start-ups. It's a complex program with many requirements and restrictions so you'll want a banker who knows what they're doing/has done it before.
Government loan requirements for a CSBFL (from TD’s website):
• Your business operates or is about to operate in Canada
• Your business’ annual gross revenue is less than $10 million in the year you apply
• Your business is for profit, and is not a farm, charity, or religious enterprise
• The assets purchased or improved must be used in your business
Overview of program (also from TD’s website):
• Total loan of up to $1,000,000 with the following subcategories:
• Up to $1,000,000 in financing to buy or improve real property
• Up to $500,000 in financing for equipment and/or leasehold improvement of which up to $150,000 can be used to finance intangible assets and/or working capital
• Financing available for up to 90% of the "Eligible Costs" of assets financed
• Amortization on loans for equipment, leasehold improvements, intangible assets, working capital and real property secured or owner-occupied real property improvements up to 15 years. A repayment schedule reflecting an amortization of up to 25 years may be available for real property loans
• Personal guarantee required, starting at 25% of the loan amount
• One-time Federal Government registration fee of 2% of the loan amount. You can pay the fee upfront or include it in your loan amount, provided you do not exceed the maximum limit of the corresponding loan category
CSBFL financing for Canadian searchers
by a professional from York University
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