Business Borrowing

All businesses encounter times when money is needed for a specific purchase, improvement project, working capital or a new expansion strategy. When your financing needs are well defined and you're looking for a predictable repayment plan, a term loan can be the right choice. Our expert Commercial Lending Team will work with you to develop a business loan that really fits your needs.

Term loans provide you with a fixed sum of money that is repaid over a specified period of time. You can choose from fixed or variable rate loans and a wide range of payment options.

Creditor life, disability, critical illness and loss of employment insurances are available for added peace of mind.

Does your business regularly turn over equipment or make continuous investments into properties? A revolving term loan allows you to borrow to an authorized limit, pay down the loan through regular scheduled payments and borrow again in the future without having to reapply each time. You can choose from fixed or variable rate loans and a wide range of payment options.

Creditor life, disability, critical illness and loss of employment insurances are available for added peace of mind.

Cash flow. Two simple words, but managing the balancing act between your income and operating expenses can be a challenge even for the most experienced business owner. A business operating loan can provide a safety net and added flexibility for those times when finances are stretched or when sales revenues are delayed.

Business operating loans are an ideal form of borrowing when you have ongoing financial needs that fluctuate over time. Accessible 24/7 through many channels (online banking, telephone banking, ATMs, point-of-sale purchases, cheques), a business operating loan helps make day-to-day cash management a lot easier. The funds are available to you whenever you need them, and you can access them on an ongoing basis without needing to re-apply.

Creditor life, disability, critical illness and loss of employment insurances are available for added peace of mind.

About the Program

Small businesses are an important part of Canada’s economy, but they face unique challenges when they look for financing. The Canada Small Business Financing Program helps you with your financing needs. Under the program, the Government of Canada makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

The program's main objectives are:

• to help new businesses get started and established firms make improvements and expand
• to improve access to loans that would not otherwise be available to small businesses, and
• to stimulate economic growth and create jobs for Canadians. On average, the program helps small businesses access 10,000 loans worth more than $1 billion each year.

Who is eligible?

Small businesses, operating for profit in Canada, with gross annual revenues of $10 million or less. Not eligible under this program are farming businesses (Agriculture and Agri-Food Canada has a similar program for the farming industry), not-for-profit organizations, or charitable and religious organizations.

How much financing is available?

Up to a maximum of $1,000,000 for any one business, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property or purchasing or improving new or used equipment. 

How do I apply for a loan?

Financial institutions deliver the program. Industry Canada does not participate in making the decision to accept or refuse your loan application. Discuss your business needs with our expert Commercial Lending Team. Our Loans Officer will review your business proposal and make a decision on your loan application. Once the decision is made to offer financing under the program, the Credit Union will register the loan with Industry Canada.

What can loans be used for under this program?

Loans can be used for financing up to 100% of the cost of:

• purchasing or improving land, real property or immovables
• purchasing leasehold improvements or improving leased property
• purchasing or improving new or used equipment

For example, you can use a loan to finance:

• buildings and land, commercial vehicles, hotel or restaurant equipment, computer or telecommunications equipment and software, and production equipment

You cannot use a loan to finance items such as:

• goodwill, working capital, inventories, franchise fees and research development

What are the costs?

The interest rate is determined by your financial institution. The interest rate may be variable (the maximum chargeable is the lender’s prime lending rate plus 3%) or fixed (the maximum chargeable is the lender’s single family residential mortgage rate plus 3%). A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan. The registration fee and a portion of the interest are submitted to Industry Canada by the lender to help offset the costs of the program for the government.

What are the terms of the financing?

Lenders are required to take security in the assets financed. Lenders also have the option to take an additional unsecured personal guarantee.

Creditor life, disability, critical illness and loss of employment insurances are available for added peace of mind.

The Canadian Agricultural Loans Act (CALA) program is a financial loan guarantee program that gives farmers easier access to credit. Farmers can use these loans to establish, improve, and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.

Through the CALA, the Government of Canada is supporting the renewal of the agricultural sector and enabling co-operatives to better seize market opportunities.

Objectives

The Canadian Agricultural Loans Act (CALA) program is a financial loan guarantee program that gives farmers easier access to credit.

Available Funding

Under the CALA, the federal government guarantees repayment of 95% of the loan to the lender, provided that the requirements of the Act and the Regulations have been respected.

Maximum Loan Amounts

Loans are limited to a maximum of:

• $500,000 for land and the construction or improvement of buildings.
• $350,000 for all other loan purposes.

The maximum aggregate loan limit for any one borrower is $500,000, while the maximum aggregate loan limit for agricultural co-operatives is $3 million, with the Minister's approval. The maximum amount eligible for consolidation/refinancing is the total of the outstanding principal balances of the loans to be consolidated/refinanced, to a maximum of $350,000.

For example: If a farmer gets a CALA loan for $300,000 for a tractor, he can still access up to $200,000 for land purchase or building repair, or $50,000 for another implement and $150,000 for land purchase or building repair.

Creditor life, disability, critical illness and loss of employment insurances are available for added peace of mind.

Sometimes a third party requires a guarantee of funds for a specific job contract. That’s where we can help with a letter of credit or safekeeping agreement. A letter of credit from Williams Lake and District Credit Union guarantees funding will be available to a third party and payable upon request.

Whether you are dealing with a foreign or domestic supplier who needs a guarantee of payment before shipping a product, or a local municipality who requires a guarantee for site services, a letter of credit or safekeeping agreement can help.