Want An ‘ Out Of The Box ‘ Path To Business Loan Success In Canada?

OVERVIEW – Information on successfully securing business loans in Canada. What are the ingredients to successful commercial loans approvals

Business loans in Canada
, unfortunately, don’t come in an ‘ out of the box ‘ path to instant approval. So lets explore some real world ‘ market intelligence’ around commercial loans in Canada. Let’s dig in.

The reality around preparing for a business loan financing involves considering who the submission is for. In some cases it might be for a bank, in other cases a commercial finance firm. The far end of the spectrum of a private equity or VC type financing definitely requires a business plan. However, that’s ‘ equity ‘… and we’re talking debt!

So a key point out of the gate is to focus business loan submissions around cash flow and repayment. We’ll let our VC/Private equity friends worry about the economy, your industry, market potential, etc… we’re focusing on getting approved for a business loan and repayment.

So if we had to emphasize the key points around business loan success in Canada they would categorically be:

Quality of collateral
The ability to meet ratios and covenants that might be required
Cash flow analysis -historical and future
Personal financial info/credit of the business owners

When it comes to business loans from banks it’s important for the business owner/financial manager to understand that ‘ branch banking’ isn’t really what it used to be! That’s because the majority, if not all business credit decisions are made by underwriters at head office. That’s why it’s critical to get a strong recommendation on your submission from your branch banker.

There’s an old joke that goes as follows: ‘ It’s technically impossible to give a banker too much information ‘. We’re not sure we agree, but it’s pretty close we would say, so your ability to answer ‘negative issues’ and ‘ questions’ with quality financial and business information is key.

Loans are always going to be repaid from cash flow, so if you’re not bringing new or more personal equity into your company be prepared to demonstrate the cash flows and collateral quality of your financials.

If you’re applying for a Govt SBL loan through your bank the challenge for this type of commercial loan is very straightforward. You need to simply understand the very clear criteria around this program and fulfill the application needs with that info. Those criteria are fundamental – a business plan, personal credit info, cash flow forecast, a premises lease, and business owner info/experience.

There’s not ‘ out of the box’ instant solution for business loans in Canada. But some homework and common sense will go far. Seek out and speak to a trusted , credible and experienced Canadian business financing advisor with a track record of Success ; providing you with that business loan intelligence you need.

Author: Stan Prokop – founder of 7 Park Avenue Financial



Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171