New businesses that have managed to get themselves set up and rolling often have to watch their expenditures in the first year or two. It can be really frustrating for the new business owner that is doing well financially but still has to be very cautious with a business that is still relatively new.
These business owners know that if they were able to expand in some ways that it would help to solidify their business even more. Yet at the same time they do not want to use their cash flow to do this and want to make sure that their business account is padded in case the business takes a turn that is unexpected. It may be that the new business owner would like to extend their business offerings which creates a need to purchase new equipment. Or, they may want to really focus on a marketing campaign which is going to cost money.
One of the solutions may be is to check out to see if the business could qualify for a small business loan. There are loans at that are available up to $50 K to help with the new but struggling business owner. First of all you’re going to have to meet the criteria for these type of business loans. Your business has to have been up and running for at least two years. It will vary depending on the province or territory that you live in but you will have to be a permanent resident or a Canadian citizen. You also have to be of the age of majority.
Once you are sure that you can meet these terms then applying for the loan is not nearly as difficult as you may be expecting. It is actually something that you may be able to do on line by filling out the application. One of the concerns is going to be the repayment of the loan and for these types of loans there are some really flexible repayment arrangements that can be made. In some cases you will be able to repay the loan over a four year period which means that you are still going to be able to reserve some of your cash flow.
If you find that your business really takes off and stabilizes well financially you will be able to pay out the loan at any time without having to deal with penalties. Once your loan has put in place you may be able to postpone your first capital payment during the first month. Naturally there are going to be terms and conditions as well as interest that comes with these loans but you will find that they are much lower than what you would be faced with in a traditional institution loans. For example, the current interest rate is around 5.70%. Something else that is really important is that with this type of business loan you do not have to put up any of your personal assets to secure the loan. This is really important especially since you are still in the growing stages of your business.
What you may want to do is meet with your accountant and see if approaching the business loan department for the government is a good step in the right direction for your particular business.
