February 11, 2015
By Bob Coleman
Editor, Main Street Wednesday
I recently wrote about the U.K’s scheme to increase access to capital for small business, now Canada is getting on the bandwagon.
Prime Minister Stephen Harper announces, “Our Government is committed to creating jobs and opportunities for Canadians. Small businesses are the lifeblood of the Canadian economy and face unique challenges when looking for financing. The changes we are announcing today to the Canada Small Business Financing Program will help more small businesses across the country secure the loans they need to prosper, grow and create jobs.”
The changes to the program will make loans available to more firms by increasing the revenue threshold under which a small business can apply for the program, and will support business start-up and growth by increasing the maximum loan amount and the maximum term length for loans financing the purchase or improvement of land and buildings.
- The Canada Small Business Financing Program helps new businesses get started and helps established firms make improvements and expand; improves access to loans that would not otherwise be available to small businesses; and stimulates economic growth and creates jobs for Canadians.
- Since 2006, the Small Business Financing Program has provided over 50,000 loans to small businesses, with loans totalling about $1 billion each year.
- While Industry Canada administers the program, private sector financial institutions are responsible for all credit decisions and the funds loaned are those of the lenders.
- Small businesses with annual revenues less than $10 million are eligible.
- Eligible purposes include equipment, real estate, construction, vehicles
- Ineligible purposes include working capital, inventory, franchise fees, goodwill.
- Loan fees are 2%. Max rate is Prime +3%.
- Maximum loan amount is $500,000.
Note $1 Canadian dollar is equivalent to $0.79 US Dollar.