Hi all,
Does Canadian Govt provide any special loans (like low interest loans) for entrepreneurs?
Whats the minimum percentage (of the total loan) you have put down from your pocket?
If anyone can provide more info (or links) related to this topic , I'd appreciate that.
Thanks!
Location: Canada-Glorious and Free
Posted on: 25-10-05 08:59:50
Quote:
Orginally posted by micky20190
Hi all,
Does Canadian Govt provide any special loans (like low interest loans) for entrepreneurs?
Whats the minimum percentage (of the total loan) you have put down from your pocket?
If anyone can provide more info (or links) related to this topic , I'd appreciate that.
Thanks!
First, do not let anyone trick you into thinking that the government has any financial assistance for new small business ventures. THEY DO NOT! I bought a book that promised information on Grants and Loans etc.. Nonsense! There are special programs like Atlantic Canada Ventures Program or Aboriginal Enterprise programs to name a few but the criteria are so complex, only UPS can get the funds to open a call centre in New Brunswick. There is no corruption, there is only lobbying.
Second, on the topic of financing by institutions like banks. These are typically low risk lenders. They only lend on 150% security. So you'll have to have capital of some sort to qualify. They do not lend directly to the company. Unless you are ENRON or OLYMPIA and YORK.
Personal guarantee is always a part of the loan process. They will always secure as much of the fixed assets as possible. So you see the idea of percentage down is not even relevant. If you need a $10 loan from a bank, they will ask for $15 in security. Does not matter how much you put down. There is the Business Development Bank (BDC). They will take part in high risk financing - (lending / equity) only on ventures that are in certain cutting edge fields like biotech, IT, electronics and medicine etc.
Third, there is Venture Capital. This takes the form of angels investors (individuals with high net worth) or capital holding companies. Most are focused on the same cutting edge fields mentioned above. They invest in retail and other fields only if they are convinced that the business is going to take on a large market share. They typically take an equity position and become business partners. And in all cases, they want to know how they can exit the business - meaning how can they sell their share at a HUGH profit.
Finally, there is franchising. Franchises typically have financing agreements worked out. Either it is done in-house or with another institution. Every franchise is different as far as down payment percentage is concerned.
I hope that helps.
BV
Don't listen to others, The Tiger has the Goods 
Check out http://strategis.ic.gc.ca/epic/internet/incsbfp-pfpec.nsf/en/Home
This is the link for the Canada Small Business Financing Program operated by Minsitry of Indsutry.
Best of Luck.
DT
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There are credit unions who provide low interest micro-loans <~$20k for starting business. These loans are under federal and provincial grants and typically require a business plan. Talk to your bank and they may be able to guide you. Most of the micro-business loans require personal guarantee. So there is not a whole lot of benefit compare to borrowing through a personal loan from banks. Strategis site mentioned by Tiger has lot of information on financing for micro-business.
Quote:
Orginally posted by micky20190
Hi all,
Does Canadian Govt provide any special loans (like low interest loans) for entrepreneurs?
Whats the minimum percentage (of the total loan) you have put down from your pocket?
If anyone can provide more info (or links) related to this topic , I'd appreciate that.
Thanks!
Quote:
Orginally posted by micky20190
Hi all,
Does Canadian Govt provide any special loans (like low interest loans) for entrepreneurs?
Whats the minimum percentage (of the total loan) you have put down from your pocket?
If anyone can provide more info (or links) related to this topic , I'd appreciate that.
Thanks!
I think you could get better replies if you were more elaborate on your reason for asking this question. Is it for preparing a project for your school (as my daughter does similar things from time to time), or telling your friend about it who might be wanting to do some business in Canada, or is it you are interested in doing some business yourself? If you want to enter into business, what kind of business and why only loans from Govt of Canada and not from any financial institution or lender?
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
