The 411 On B I L / CSBF – The Real Deal On the Federal Government Small Business Loan – aka ‘ SBL ‘ Loans

Wow. Is today national acronym day or something? 411… BIL… CSBF… SBL … Can someone explain whats going on here?!

In truth we’re talking about the 411… That’s our term today for ‘ information’ today on the federal govenremnt small business loan. The 7441 businesses (yes, that many!) that used the program in 2010, many of whom are your competitors; tend to call the program the SBL program. That’s small business loan! To further confuse things the formal government name for he program is CSBF.

So our point… simply call it whatever you want, but consider using the program! And by the way, whats so ‘ SMALL ‘ about 1/2 Million dollars. That’s the formal cap on the program, although most financings are done in the 350k range. Again, it’s probably just us, but that’s not small. Everything’s relative we guess.

Let’s examine the 5 or 6 stages of getting a completed funding under the program. Stage one is of course determining if you qualify. Some basic guidelines are as follows – your first must have revenues, or projected revenues under 5 million dollars. We say ‘projected ‘ because thousands of firms financed under the program are in fact start ups who might clearly not be able to achieve this level of financing outside the program. Owners of the business must have a respectable personal credit history and be up to date in their personal tax filings. Doesn’t it make sense that you might not get a government loan if you have tax arrears? We certainly think so.

Many of our clients are initially confused as to what can be financed under the program. If there is one big misconception is that federal government small business loans – i.e. the SBL, are cash and working capital type loans. This, unfortunately is not the case, the program only finances equipment, software, leaseholds, and real estate.

Stage 2 – what documentation is needed for the SBL loan? It’s not as bad as you think, as we think many clients seem a bit overwhelmed when they investigate the program on their own. You simply need an executive summary of yourself and the business, financial projects that make sense (key word – make sense!) and some typical back up data that you would need for any other business loan you were applying for.

Stage 3 – Presenting your SBL loan package. Is that to the government? Not really, Industry Canada is the branch of the government that sponsors and adjudicates and mentors the program, but on a day to day basis you deal with your own local bank for the program. The challenge we find is that many clients tell us that they have poor experiences in working with their banker who often is not fully conversant with the program. So speak to a trusted Canadian business financing advisor on how to locate the best bankers that are great at this program.

Stage 4- Its simply a case of presenting your package in person, and answering typical question that might come up on your business, the use of the proceeds, and your own business background and experience . Here again a trusted business advisor can do this for you and with you.

Stage 5- That’s our favorite stage, it’s called the ‘ Approval ‘! The program pays 90% of all invoices you submit within your approved balance. You are responsible for the other 10%, that your equity commitment to the loan. Quite modest we think. And, want to hear some more good news; you aren’t even required to guarantee the full balance of the loan.

In 2010 over $ 950,000,000.00 of loans were advanced under the program. Your firm should consider being one of the recipients of the federal government small business loan, aka the SBL. Speak to a credible and experienced advisor on the program that can ensure you qualify and can get approved on a fast track basis.