The global market and economy heavily emphasize on small or large scale businesses. That’s why small business loans in Canada provides huge financial-assistance to people to start their short businesses or carry out working capital in any part of Canada. From 2010 to 2019, Canada had disbursed nearly $9.5 million in shape of loans.
How do you qualify for a small business loan?
The businesses which are earning approximately CA$10 million gross annually highly qualified for the loan. But, the organizations which are associated with religious affairs, agriculture, charity and non-profit companies are incompetent for this small business loan program.
How much loan receive under this program?
The co-applicant or a person can acquire up to CA$10 million and can only spend 350K CAD for renovating the business or leased property, investing in used and new equipment.
How to apply for a loan to start a business?
The basic concept behind the small business loan program is to help those people who are eagerly wanted to begin their startups in Canada. Firstly, you have to collaborate with the finance manager in any bank, credit union, or Caisse Populaire in Canada for the loan. There you have to satisfy the demands related to your business and character. After that, the finance manager will examine your application thoroughly and the decision will proceed further on behalf of your satisfactory answers (be careful single error can provide mistrust impression on the officer and you will get ineligible for this program). After you get a green single for your application then you have to fill the form with the essential documents and submit it to the related department for a loan in a bank. When all rules are fulfilled then you will get a loan for your business.
What can you do with a loan?
You can utilize this loan for several purposes and below are the generic motive of this loan.
- You can acquire or renew the property for business usage. Like, you can buy the land for your hotels, restaurants, small factories, IT Company and so on.
- Similarly, you can invest this loan for the rental agreement or leasehold improvement, where chances of profit are greater.
- You spend this loan to get the new or second-hand machinery for your business. It can be an automobile, factory machines or anything (It can earn you something).
Besides, you can utilize this loan for other motives also.
What are the constraints related to this loan?
As mention above, you get a chance to spend 350K CAD from CA$1 million for acquisition purpose. Therefore, to further put lights on acquisition constraints below are the points mention.
- Loan money is not allocated for charitable foundations nor can the person invest in it.
- Businesses are strictly prohibited to pay their dues on franchises from this money.
- And if you are operating any educational organisation, then this loan can be useful for buying new equipment rather than investing this money on the upgradation of the school building.
Interest Rate Related To This Loan:
The interest rate on the business loan program can vary. It depends on the lenders from where you are getting it. Therefore, the fixed rate is 3% fixed interest rate (for CA$100K, you have to pay CA$100.3K in return) or there is a probability of more than 3% also.
There are only 2% fee charges for the entire loan enrollment, which will be deducted at the time of the loan. This means that, if you request for CA$10K loan, you will receive CA$9.8K. And this enrollment and interest fee will be handed to Science and Economic division in Canada.