The Financing Of Champions ? Government Business Loans In Canada

OVERVIEW – Information on government loans in Canada . Where doe the ‘ SBL ‘ loan fit in when it comes to access to small business banking for Canadian business

Government loans availability in Canada often comes as a surprise to the business owner/entrepreneur. Many clients we talk initially don’t seem to understand how the ‘ SBL ‘ loan fits into the small business banking structure in Canada.

Let’s examine what we think you will consider a pleasant surprise when it comes to discovering the access and capabilities of this loan. Let’s dig in.

When it comes to starting, or building a business in Canada the entrepreneur is often concerned about the aspect of personal guarantees. How does the issue of the ‘ PG ‘ (personal guarantee) fit in when it comes to the BIL/CSBF loan program? By the way that’s the formal term for this loan program, which is administered by INDUSTRY CANADA in Ottawa.

But back to our ‘ guarantee ‘ issue. It’s really a ‘ good news/ bad news’ scenario here. The bad news is that a personal guarantee is required under this loan program. The good news: It’s only for 25% of your loan amount – with maximum loans under this program being $ 350,000.00

Why should Small business loans via the federal program have so much appeal to the entrepreneur. They are clearly not for the ‘ big boys’. It’s all about helping small business, including restaurants, service companies, mfg firms, etc. In fact the government goes so far as to limit the actual or projected revenues to 5 million dollars when it comes to eligibility and application for the loan.

One other important technical aspect of the loan is that while the program was created and developed by the government they do not run it on a daily basis. That’s the job of Canada’s chartered banks and a handful of other misc. institutions – but primarily our banks.

So it seems that the best place to go to both learn and apply for the SBL loan is any local bank branch, right? We wish that were the case , but in our many years of experience in guiding clients through the program has shown us that unless you have an experienced advisor guiding you through the process your chances of success are severely diminished.

It’s almost humorous, and somewhat ironic that in the U.S., where a similar program exists, the rules state that the entrepreneur must in fact be formally turned down by the bank before they can apply for the SBL loan. As one writer has so well put it ‘ I’ve never met an entrepreneur who couldn’t get turned down for a loan by the bank ‘!!

So what’s required when it comes to applying for government loans with a strong chance of approval success?

The basics are: an opening balance sheet and cash flow projection, a personal statement of finances from the owner/ owners (net worth statement), an executive summary or business plan, and an itemized list of items to be financed.

There’s a lot of misinformation, lets call it ‘ urban legend’ around government loans. Here are some examples –

It takes too long to apply/get approved (WRONG – A complete application is usually adjudicated within a few business days)

You need outside collateral as in many other types of business loans (WRONG – No outside collateral is required)

The SBL Loan is similar to a business credit line (WRONG – It’s a term loan that finances only two categories of assets – equipment and leasehold improvements)

You can’t purchase an existing business with the BIL loan (Wrong – you can!)

If you find that you’ve stumbled upon one of Canada’s best kept secrets – the Govt Small Business SBL Loan and want to ensure your access to this great program (7000-8000 loans are approved each year for Billions of $ ) seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in accessing this great financing program.

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653

Cell    = 905 302 4171
Email =

7 Park Avenue Financial
Canadian Business Financing


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.
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