Start with the use of funds
A lender's first question is what the money is for. Write one page that lists each cost, with a quote or estimate beside it, and shows how much you are putting in yourself. A request for a round number with no breakdown is the most common reason an application stalls.
Show that the business can repay
Lenders read cash flow before anything else. For an operating business that means two or three years of financial statements and tax filings. For a startup it means a month-by-month forecast for the first year and annual figures for years two and three, with the assumptions written down so the lender can test them.
Have the standard documents ready
Expect to be asked for a business plan, financial statements or forecasts, personal net worth statements for each owner, incorporation documents, a lease or offer to lease, and quotes for equipment or renovations. Having these in one folder before the first meeting shortens the process by weeks.
Know the programs
Canada's main lenders, the Business Development Bank of Canada and the Canada Small Business Financing Program each have their own forms and limits. Ask the lender which program your request falls under before you prepare the package, because the required documents differ.
Expect questions
An approval rarely comes from the first submission. The lender will come back with questions about your assumptions, your experience and your security. Quick, written answers are part of the application.
General information for Northern Alberta business owners. It is not legal, tax or lending advice.
Talk it through with us
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