SMALL BUSINESS FINANCING:
The biggest challange for any convenience store buyer is to arrange a business loan.
Acquiring a convenience store business, which includes business assets and the goodwill with the business contracts, involves more expenses beyond the actual purchase price. In addition to the purchase price, the buyer must cover various costs like inventory payment, upfront rent and security deposits, hydro deposit, transfer fees, hard cash to put in to the ATM machine, Canada Post deposit if the store has Canada post outlet and legal closing expenses. It is also essential for the buyer to maintain sufficient working capital to manage both planned and unexpected inventory purchases, as well as repair and maintenance costs.
Often, buyers lack sufficient cash reserves to cover these expenses and deposits. Some may have enough cash but still prefer to opt for a business loan to ensure a smooth cash flow during the initial phase of business ownership. Additionally, the surplus funds from the loan can be utilized for other necessary investments or business ventures.
Different lenders offer various business financing options, among which the Canada Small Business Financing (CSBFL) is a popular choice. With this program, lenders can finance up to 90% of the purchase price, and 85% of the loan amount is backed by the federal government, reducing the borrower’s obligation to only 15% in case of unforeseen business closure. The CSBFL loan term can extend up to 15 years, and the application can be submitted before or even after the business takeover, but the approval must be obtained within 365 days of purchase.
We have a successful track record of securing business loans and commercial mortgages, covering up to 90% of the purchase price for businesses, whether the buyer is acquiring the business only (up to a maximum of $500,000) or both the business and the property (up to a maximum of $1,000,000). To qualify for the business loan, buyers need to demonstrate good credit, industry experience, and a strong personal net worth.
As a brokerage, we work with major banks and financial institutions to find the most suitable lender based on the buyer’s information and the business details. Our strong relationships and goodwill with these lenders ensure a seamless process for our clients in Ontario and other provinces of Canada.
Whether or not you are purchasing a business through us, we are here to assist you in securing business loans or commercial mortgages. Buyers who are also buying a business through us may enjoy special discounted fees.