OVERVIEW – Information on government loans and SR&ED tax credits as valuable components of any business financing strategy for early stage and start up businesses in Canada
Business finance solutions in Canada include the Canadian Small Business Government Loan as well as the SR&ED tax credit program. Should you ‘ tap into ‘ these two programs (probably about 15,000 other firms do already!) and how is that done? Let’s dig in.
Although business owners and financial managers in Canada are sometimes reluctant to take on debt (or in fact anything associated with the wheels of government) the reality is that thousands of companies utilize our two aforementioned programs to tap Billions of $ of capital every year.
The govt SBL program is one of the best initiatives the Cdn government takes in ensuring a certain amount of capital is available to many predominantly younger and growing firms. By the way, this definitely includes start ups, as they and other firms in the small and medium enterprise chunk of the economy generally power Canadian economic success.
It’s important to realize that only 3 asset categories are financeable under the program:
Equipment/fixed assets/technology/application software
Depending on which asset category or categories you are applying for the loan can be as much as $1,000,000.00. Want some more good news? Owners are on the hook for only 10% as a personal guarantee component of the loan, the govt guarantees the balance. In case you think we’re just gushing over such a great program we probably are as other strong selling point of the program include:
No prepayment penalty
Terms ranging from 2-7+ years
Remember, this isn’t a government ‘ grant ‘ – it’s a true term loan that must be justified by a good business plan and hopefully some good mgmt and industry experience.
The government relies on Canadian banks to administer the program and your best bet is to ensure you’re working with someone who understands criteria and timelines and the basics of a loan package. (Those basics are typically a business plan and cash flow that reflects the loan repayment.)
The most common Tax Credit program that again, thousands of firms take advantage of is the SR&ED program which refunds a large portion of any R&D expenses. This R&D can span many different industries, including software development, clean and green businesses, mfg, etc.
For privately owned firms the govt makes this tax credit ‘ refundable’. This credit can then be monetized or cash flowed as a bridge loan or cash flow advance. Many early stage firms use this cash flow loan as a main component of their overall working capital or cash flow strategy.
If you’re looking to tap into 2 solid programs that deliver capital and cash to your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in navigating either program in a timeline that makes sense for your capital needs.
Stan Prokop – founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Direct Line = 905 302 4171
Office = 905 829 2653
Email = email@example.com
‘ Canadian Business Financing with the intelligent use of experience ‘
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
7 Park Avenue Financial
Canadian Business Financing