Don’t look now but 2024 will arrive in just one month’s time! As 2023 draws…
The title of today’s blog is a question that many a Canadian business owner has asked. All over this great nation of ours are entrepreneurs who want nothing more than to grow their businesses. However, after visits to banks, they realize that securing funding for their lofty ambitions is a lot harder than first imagined.
What is required of small business owners in order to be approved for business loans?
As K.F. explains on behalf of Olympia Benefits Inc., an application for a small business loan in Canada often requires a number of documents. To begin, in order to verify that a business owner is eligible for a business loan, he/she must supply a business plan. This helps to prove why the applicant requires a loan and the intention for the money’s use. The lender will request a copy of a business plan in order to grow trust in the applicant.
Bank statements are also necessary. A bank’s loan officer needs to see the cash flow of a business. Is the business sustainable? The ways in which money is both earned and spent will help a loan officer determine if it’s safe to lend the business owner money. A balance sheet is another loan application requirement. “These are typically required so that your lender can evaluate your total assets and liabilities,” explains K.F.
How much do you spend and how much do you make?
Business owners must also supply income statements. An income statement lets a lender see what the expenses of a business are. It answers such questions as “How much do you pay for the goods sold in your store?” and “What is your net income?” Lenders also often wish to see personal financial documents. Seeing a credit report helps a loan officer understand an applicant’s financial health.
As a business owner, you may also need to provide your bank with a copy of your tax returns. “Your lender will use this to confirm whether the income you claimed is the same as what you reported with the CRA,” writes K.F., “Any discrepancies can jeopardize your application approval.” You may also need to provide information about the assets you wish to purchase. This includes copies of sales contracts and purchase agreements.
Is there anything you cannot use a business loan to finance?
According to the Government of Canada, you cannot use a loan to finance items such as goodwill, working capital, franchise fees, research and development and inventory. In addition to the long list of requirements, this list of limitations is another reason so many Canadian business owners opt for merchant cash advances over traditional business loans.
Firstly, none of the above-mentioned requirements are necessary for approval. Secondly, business owners may use their merchant cash advances to finance anything they want! There are no restrictions.
Synergy Merchants’ unique merchant cash advance program enables all types of business owners to get their hands on much-needed extra working capital. Regardless of your credit history or length of time in business, you can be approved in less than 24 hours! For more information, please don’t hesitate to call Synergy Merchants at 1-877-718-2026 or email us at firstname.lastname@example.org. You can also apply online for a free, no obligation quote!