Did you know that the government has a guaranteed loan program that will provide financing to get your business started or help your existing business grow. Contrary to popular belief, this program is offered through all chartered banks and credit unions in Alberta. The CSBF loan can help businesses purchase, install and modernize business equipment and other fixtures. It can also help purchase a business (Asset Purchase), help purchase an owner occupied commercial premises (as long as the borrower occupies more than 50% of the useable Square Footage), as well as finance leasehold improvements.
The Basics of this program are as follows:
How can this help my business?
The Canada Small Business Financing Loan can provide a Canadian business with up to $1,000,000 in financing for the purchase of land or business premises ($350,000 for leasehold improvements and equipment)
With assistance from the federal government, businesses can support their financing requirements without using personal assets as security
Term loans extend financing to assets not normally covered by traditional financing options, for example, leasehold improvements
What else do I need to know?
If the loan is for the purchase of premises, 50% of the floor space must be for your business activity
Current fiscal year gross revenues must not exceed $10,000,000
The maximum value of all CSBF Loans an independent small business may have outstanding with all lenders cannot exceed $1,000,000 ($350,000 for leasehold improvements and equipment)
Applications must be submitted with a business plan which include financial statements or projections
Eligible purchases made within the past six months can be financed
Loan terms are generally 5-10 years depending on the asset being financed
Maximum interest rate on variable rate loans is Prime + 3.0%.
A one-time up front government registration fee of 2% of the loan amount is payable to the government and can be added to the loan principal
As always, please trust in the professionals at KLRT Commercial for all of your commercial needs. If you have any questions about any of the information above, please contact us at the numbers below.