Govt SBL Loan Financing Doesn’t Have To Feel Like A Contact Sport

OVERVIEW – Information on government business loans in Canada. When does The Guaranteed Loan Program Work for start up’s and SME companies

Government business loans in Canada work when you know how they are used and if your existing or new company qualifies. To some it must feel like tougher than a contact sport – but that should NOT be the case . Simple as that. Let’s dig in.

To some the connotations of a ‘ Govt’ guaranteed loan conjures up images of ‘ red tape’ and bureaucracy. That clearly is NOT the case by the way.

So what does the business owner/entrepreneur need to know about the SBL loan program in Canada? Let’s take a look at some myth and reality around the program.

One issue that clients always want to talk to us about is the personal guarantee aspect of this loan financing. Here’s the good news… here’s the bad news. Yes there is a personal guarantee covenant around the program financing, but the good news

is that it’s a limited guarantee of 25% of the financing you are approved for.

While it might be true ( we’re not sure) that this financing doesn’t allow your business to become the largest and successful company in Canada the reality is that it finances around 7000-8000 businesses every year in all sectors of the economy – including mfg, hospitality, franchising, etc.

So who is in fact the Guaranteed Loan Program in Canada? The truth is that is simply an offering, via INDUSTRY CANADA, that is made to all Canadian banks and some misc. other institutions who wish to participate and administer the program.

So you don’t have to ‘ visit’ the government, so to speak, all you have to do is to find a qualified banker who understands the program. On occasion that is a challenge by the way, so that’s when it might be advantageous to seek out a business financing advisor who is conversant and comfortable with the program.

So what is in fact involved in getting approval for government business loans? To be eligible for the guaranteed loan program your business must have a premises lease that is available to your company for at least as long as the term of the loan.

Typical requirements are:

Business plan

Cash Flow

List of items to be financed – i.e. vendor quotes, invoices, etc (Assets that your company purchased in the last 6 months can still be refinanced)

Proof of incorporation/business registration

Premises lease

Personal net worth/credit info on business owner/owners

When you look at those requirements above they really don’t differ from any other type of business financing application.

The government guaranteed loans do not have a requirement for business owners to put up outside collateral, i.e. collateral mortgages, other assets, savings, etc – That’s a good thing!

Commonly known as the SBL loan, the program finances equipment, leaseholds, real estate, and even the purchase of an existing business. Deals are structured as term loans, not lines of credit, and typical terms are 5-7 years as far as repayment. By the way, loans can be repaid without penalty, which often is not possible with other types of financing.

It’s important to understand what the program is not. It is not:



If you want to be an ‘ insider’ on government business loans in Canada and have the ability to find out if this loan works for your firm seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your guaranteed loan needs.

Author: Stan Prokop – founder of 7 Park Avenue Financial

Originating business financing for Canadian companies, specializing in working capital, cash flow, and asset based financing. In business 10 years – has completed in excess of 90 Million $$ of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details:


Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171