Small Business Loans Kit Town of Canora

Transcription

1 Small Business Loans Kit Town of Canora Canora Economic Development Commission Box 717 Canora, SK SOA OLO Phone (306) Fax (306) Website: 1

2 Table of Contents Small Business Loans Program... 3 Steps to Starting a Business Plan... 4 Business Plan Checklist... 5 CEDC I & II... 6 S.B.L.A for Students... 6 S.B.L.A Loan Criteria... 7 Existing Business Forms... 8 The Business Team... 9 Operations of Business Statistical Information Form

3 CANORA ECONOMIC DEVELOPMENT COMMISSION Small Business Loans Program MAX LOAN: $15,000 INTEREST RATE: 4% MAX REPAYMENT PERIOD: 4 Years What is the SBLA s Objective? The main objective of an SBLA is to operate a loans association for the purpose of making loans to small businesses. The association encourages the formation and supports the continuance of existing small businesses by providing financial assistance under the SBLA. How much money can be borrowed? SBLA s can lend up to $15,000 to applicants. SBLA loans must be repaid within 4 years and will have an interest rate between 1% to 10% (ours is currently 4%). The frequency of the loan payments can be decided between the applicant and the SBLA that is doing the lending. Who can borrow from an SBLA? Businesses and associations not eligible for assistance include those engaged in direct farming, exploration (e.g. mining and oil extraction), residential real estate, direct selling, and multi-level marketing, repaying existing debt or outstanding account of the eligible business, or paying operating expenses of the business. Charitable organizations do not qualify for assistance. How can funds be spent? The funds from an SBLA must meet certain criteria. These include money for purchasing new equipment, inventory, minor renovations, and expansion. They cannot be spent on paying utility hook-ups/bills, insurance premiums, registrations, membership enrolment, worker s comp enrollment, wages, pay off debt on credit cards or expenses (meals, gas, and lodging) incurred while purchasing supplies for business. What documentation must a borrower provide? The loans association must provide a business plan, application, a signed demand promissory note, a general security agreement, which will be assigned to the government of Saskatchewan. The client must also include the $60 administrative fee (to the Minister of Finance) with the application. Where can I find the documentation? Loan application forms and business plan templates are included in this package. Can an existing business apply for a loan? Yes. We require the business owner to submit a business plan and complete the Existing Business form located in this package. Can a borrower, who has paid their loan, borrow again? Yes! Providing they have substantially paid down their loan to the maximum of $15,000 limit. How does the approval process work? A credit check is completed by the SBLA secretary and the local credit committee meets to review the application. Application forms, $60 fee, and business plan are forwarded to Saskatchewan Industry and Resources in Regina for final approval. If approved the loan amount is deposited in local a SBLA bank account and funds are disbursed to client by local SBLA. If you have any questions, please contact our office. Community Development Officer Town of Canora Ph: (306) cdo.canora@sasktel.net 3

4 Steps to Starting a Business Plan In this package we have included the SEER book Business Planning Made Simple. This book will provide you with a detailed explanation of what s involved in started your own business. It also provides easy to understand steps of how to plan for your new business. Think of the business plan as answers to a few basic and logical questions about a business. Imagine that someone is coming to see you to explain a new business idea. What questions would you ask in order to fully understand that new idea? Those questions are surprisingly few. They are simple, and they should flow in a logical order. Answer these questions below to help you start writing your business plan. 1. What is your business? (Give a basic description) 2. Who will you sell to? (Who are your customers?) 3. How much will you sell? (Tell who, and what is your market) 4. Who is the competition? (What other businesses are competing for the same market?) 5. How much money do you need? (List start up costs and operating costs) 6. How much profit will you make? (Explain why this is a feasible business idea) Make sure that a one-year financial projection is included. If you have an existing business provide a financial statement for the past 2 years. 7. Are you a good manager? (Explain your qualifications, experience, what you have to offer the business) Once you have received satisfactory answers to the above seven basic questions, you will have a better understanding of your new business idea. 4

5 Business Plan Checklist An introductory letter A title page A summary statement including a brief description of your business Background Information o Legal status of your firm o Start-up costs of your business A description of the industry o Principal characteristics, Trends, Players, Barriers A description of your product or service o Assessment of strengths/weaknesses o Patents, trademarks, copyright protection, technology you will use A description of your management team o Who are they, qualifications etc. Marketing Plan o Assessment of total market area and competition o Pricing policy o Distribution policy o Who is your target market? o Advertising/promotional plan Description of land, buildings and equipment o Location o Land and equipment requirements Operating Plan o Inventory control, workflow, supplies and materials, suppliers Personal References o From banks, professionals, and/or former employers Financial Plan o capital requirements o cash flow budgets o balance sheet o projected income statements o break even chart o sources of financing o personal balance sheet including personal net worth Risks and problems associated with your business and how to resolve them o worst case scenarios 5

6 Town of Canora Administered Small Business Loans Associations Canora Economic Development Co-Operative Ltd. Canora Economic Development Co-Operative II Ltd. The Canora Economic Development Commission, in conjunction with the Saskatchewan Economic Development Small Business Loans Association sponsor small business loans for new and existing businesses. Some of the main features of this program are as follows: 1) Amount of money available - any amount up to $15,000. 2) Low interest rate of 4% 3) 48 month (4 year) payback period 4) Low monthly repayment plan Please read over the Loans Criteria Sheet. SBLA for Students Students can apply for a small business loan. Students who wish to start their own full or part time business (year round or seasonal) will need to complete a loan application. If students are under the age of 19 they will need to sign a student/parent(s) guarantee. They will also have to pay the $60 administration fee of the loan application. 6

7 S.B.L.A Loan Criteria 1. The business must be established in Canora or immediate surrounding area. 2. Will create or maintain jobs. 3. Applicant should supply a business plan as outlined on the sheet given to them and hand the completed form to the administrator before the applicant will be considered. 4. All loan applications must be accompanied by a $60 application fee. Cheque must be made out to the Minister of Finance. 5. All loan payments are due on the 1 st of every month. You must supply the Commission with twelve post-dated cheques or set up direct deposit before loan amount will be released. 6. All NSF cheques are charged local bank rates. 7. Interest rate is 4%. 8. Maximum loan period is 4 years. 9. First time applicants have president over second time applicants for funds available. 10. Canora's Community Development Officer must interview loan applicants. 7

8 For Existing Businesses Answer the questions from pages 8-11 to create a condensed version of a business plan. Must be a computer generated business plan. Number of years in business Describe products and/or services your business provides Purpose of loan Discuss the positive impact(s) the loan will make on your operation Source and application of funds Equipment: Owner: Inventory: Bank loan: Other: S.B.L.A: Total: Total: 8

9 The Business Team Describe the key people who help you with your business and their roles and responsibilities Individual: Individual: Bank: Accountant: Lawyer: Other: Other: 9

10 Note: Insurance Company, Association, and Technical Support Person Business Operations Describe the location of the business: Suppliers: (Only list main suppliers) Name of Supplier Items to be purchased 1) Do you have an alternate supplier in the event your main supplier is unable to provide you the products that you need? Yes No 2) Have you researched the terms of doing business with your suppliers? Yes No Do you feel there are areas in operating and managing your business that you are weak in? Weakness: How are you going to improve this? 10

11 Statistical Information Form Name of Business: Company Address: City: Phone: Postal Code: Fax: Website: Principals: % Owned: Age: % Owned: Age: % Owned: Age: % Owned: Age: New or Existing Business: Funds Levered for this project Full or Part time: Debt (bank financing) $ Number of Jobs Created: Investment (equity) $ Number of Jobs Maintained: Loan Amount $ Type of Business: (please check one) Manufacturing Retail Service Tourism Agriculture ************************************************************* Office Use Only Client No.: - First Payment Date: / / Location: Approval Date: / / 11