For businesses who can’t get a Government or Bank Loan due to low credit or net worth, or who can’t wait out the several months it takes to get funded, there’s an excellent alternative many are turning to.
You qualify if you meet this simple criteria:
- Min 12 months Incorporated
- Annual Gross Revenue $100k+
- 625+ Credit Score (Equifax)
- Have liability insurance OR be prepared to get it upon approval
It only takes 5-7 days to get funded up to $250k.
Let’s review the details…
- Loan amount is 35% of gross annual revenue up to a max of $250k
- Term: 48 months
- Interest: 17% – 24%
- One-time Admin/Gov’t Fee: 0.5% – 2.5%
- There are NO additional fees: no lawyer, broker, referral or consultant fees
- Early repayment penalty = 6 months of interest
- All shareholders/owners personally guarantee the loan, but there are NO liens on properties, and the loan won’t appear on their personal credit report.
- Timeline 5-7 days from date of application submission to funding.
- Funds are deposited into the Business Bank Account. Interest payments are automatically withdrawn (starting month 7) from the same account the funds were deposited into.
In summary…
Yes, the interest is higher than bank loans. But, with inflation and interest rates jacked up to where they are right now, even banks are charging high rates.
As with anything, there’s a trade off. Bank interest rates will be lower, but it takes 2-6 months to get a business loan. Some people can’t wait that long
Banks will give longer terms (generally the length of the business lease), however most business owners don’t meet their strict qualifications:
- Banks require a minimum credit score of 650 (which many don’t have)
- Banks require a high net worth (one of the shareholders needs to own a home to qualify)
- Banks require the shareholders to have liquid capital in personal savings accounts / investments of 15% – 25% of the loan amount (most don’t have that much saved up)
- Canadian Banks don’t take risks on existing businesses and therefore need to see excellent (heathy) financial statements
- Banks will, however, take risks on start-ups with a solid business plan and projections (as long as they meet the other criterion)
Therefore, for those who don’t qualify for bank loans, this is an alternative worth looking into.
We can prequalify you in 15 minutes and help you through the application process FREE OF CHARGE! Book a call with us today.
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