How Can Small Business Survive in Canada

Finance companies offer various types of business loans to companies that face long- and short-term shortages.
By: CanadaBanks.net
 
Nov. 8, 2013 - PRLog -- Finance companies offer various types of business loans to companies that face long- and short-term shortages. There are many options, based on the amount required, type of collateral (if any), credit history, and other factors. Companies may have to present different documents such as financial statements, business plans, business leases, certificates, and others. Some banks require that companies present their tax returns, recent mortgage notes, and information about their business accounts. Documentation of loan purpose is also required, including dealer, supplier, and estimates. Financial information to present includes average monthly balances, account number, loans from other financial institutions, and others. Details such as loan balances, monthly payments, assets used as collateral, and other documents may be required.

Financial establishments offer business and commercial loans to corporate entities, mid-sized companies, and small businesses. Companies can choose from unsecured and secured loans such as lines of credit, merchant account cash advances, and commercial real estate loans. Financing is offered to businesses that plan to expand their operations to new markets.

Loans help companies in a crunch and when there is a gap between money going out and in. Borrowers are required to supply information such as bank and personal statements as to prove their ability to make timely repayments. There are other types of financing that are offered to small businesses, including transition and emerging business loans. Emerging business loans are offered to companies that are not profitable and come with flexible underwriting criteria. The legal and origination fees are due at settlement, and borrowers benefit from low interest rates. The loan amount varies from bank to bank and can be in the range $500,000 - $1,000,000. Eligible uses vary, with businesses applying for financing for tenant improvements, purchase of equipment, and to get working capital. Banks also offer transition loans to businesses that plan to change their location or to buy another company. Business transition financing is offered to facilitate the sale of companies to other businesses, employees, or the management. There are also sprout loans for business owners who have an outside source of financing, including investment income and part- or full-time job. Borrowers who have late or missed mortgage or rent payments may not qualify. Lending criteria vary when it comes to credit scores, but a score of 525 or higher is usually required. Businesses that have surplus income may choose to prepay up to 15 percent a year Subordinate financing is also offered to companies that don’t have valuable assets to present as collateral. Retailers and restaurants do not qualify for overdraft protection or operating loans.

Financing is targeted at existing and start-up companies and helps them to finance long-term assets. The government also offers small business loans to growing and new businesses to encourage companies to expand and thus increase employment levels. There are also secured and unsecured working capital loans which are offered to businesses that face shortages of operating capital.

Reference:

http://www.tdcanadatrust.com/products-services/small-business/credit/loan/cred-loan.jsp

http://www.canadabanks.net/default.aspx?article=Business+Loans
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Source:CanadaBanks.net
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Tags:Small Business, Canada, Banking, Loans, Finance
Industry:Banking, Loans
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