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Small business loan program in Canada provides the ease to the people those are running a small businesses in Canada. Since post 10 years the small business owners have received 9 billion CAD, in this amount more than 63,000 loans have made.
Eligibility for the Small Business Loan
Small business loan or financing is for those businesses are making the 10 million CAD or less per year. This loan is not available for the farmers (for farmers there is a separate program), as well as the loan is also not available for charity organizations, religious organizations and non profit organizations.
How Much Finance Help You will Get?
In business loans in Canada the business owner can get the loan of 1 million, in which owner cannot use more than 350K CAD for improving the property, purchasing the used or new equipments, or purchasing the lease improvements.
How to Apply for Small Business Loan
The purpose of the small business loan is to provide the financial help to stand business in Canada. In the need to business loan, you need to discuss with the finance officer in any bank, credit union, or caisse populaire in Canada. Then the Finance officer will review your application and business proposal, and on the behalf these the decision will taken. Once your application approved you have to complete paper work, you have to submit all the documents those are required from the administration, the financial department in the bank will disburse with the loan after the completion of all formalities and paperwork. The loan will register with the innovation in Science and Economics Development Canada.
Where You can Use the Loans?
The small business loan can be used for the following purposes.
- You can purchase or improve the building or land that you are using for business purpose. For example if you are running a restaurant or hotel then you can use the loan for improving the hotel’s building.
- You can buy the used or new equipments with loan. For example you can buy the new cars for the official use.
- You can purchase the existing or new leasehold improvements. For example if you want to buy the franchise of the existing business.
There are many other purposes for Small business loans can be use, but here we have mentioned the most general purposes for businessman apply for the financial loans.
Restrictions on Business Loan
As we have mentioned you business owner can only use the maximum $350K of the loan money for the purchasing purpose. But in purchasing there are also few restrictions which are given below.
- Loan money cannot use for the charity.
- Business loan in Canada cannot use for paying the fees of the franchise.
- If are running any education institute and you can use it for buying the school equipments not for the research and development.
How Much Interest on Loan?
The interest rate of the small business loan is depend on where you are getting the loan. The loan can be fixed or variable.
- The interest can be variable, the maximum interest will be more than 3% on the loan.
- The maximum interest is on the lender’s family mortgage will 3% fixed.
If you get the loan of 10K CAD on the interest of 3% then on the return of loan you have to pay the 10.3K CAD (including interest). There is the 2% registration fee of the total loan that will cut down on the time of getting loan, for example if you get the loan of 10K CAD then at the time of receiving money you will 9.8K CAD. The registration fee and loan will be submit to the department of Science and Economic in Canada.
Terms of the Small Business Loan
While you are going to apply for the loan, the lender will required the security in the form assets it can be papers of land and etc. The lender can also demand of the additional security from the defaulter person. If you want to know about the terms of the loan you can contact with the customer care of the financial institution or bank.
