Hi all, I am planning to finance my friend for a poultry business as she is available to manage it in the province. It's already an ongoing business but is small because she does not have capital to expand it. The question is, what percentage should be mine, and her's. I'm not sure how to approach that question, need help pls. Thank you! 💖
How was your experience with it? Was the process overall smooth? Looking to inquire about it soon!
Thank you
Which would we be more advantageous for a single-member LLC?
Approx 60% used for business and 40% for personal.
As you can guess, the coronavirus is pretty bad for enterprises. Many businesses have already thrown in the towel and I have no doubt that many more will go belly up before the crisis is over. Many more may not be facing bankruptcy, but still face cashflow issues due to the lockdown period - you can't complete jobs and earn revenue during this period, but still have to pay salaries and other fixed costs during this period.
In parliament, HSK announced financing packages aimed at extending credit to SMEs to protect local businesses and local jobs during this crisis. This includes generous subsidies on loan programmes to SMEs. If you look at the MAS website, or check out the websites of various banks, you'd think it's pretty accessible - you can apply in as little as 5 minutes.
But in my experience, not all banks are as helpful as they purport to be. One of the Big-3 banks I approached straight up replied to me that they're only offering loans to businesses with annual turnover half a million or more. This automatically rules out most startups and small businesses. It's bamboozling because there's no credit analysis process - no 5Cs, no credit scores. They don't care whether you've made a profit, they don't care how long you've been in business, what your business model is, or whether you have ever defaulted on a loan.
If you're not big enough, you're not worth their attention, period. And they don't even tell you this when they advertise for you to apply with them.
Now, I normally wouldn't be so miffed about being denied credit. Banks tend to close their umbrellas during crises. That's typical behaviour. What's disgusting is to know that they're suckling on the sweet teats of generous government subsidies - Ah Gong is bearing 90% of the risk of SME loans obtained during this period. I'm not sure how this subsidy is going to be passed down to SMEs. And they're milking off the insincere PR by advertising all over that they "care" and profiteering over this crisis.
Now, I haven't yet heard back from the majority of lenders. But seeing a Big-3 bank behave this way during a real crisis is utterly disheartening.
I haven't seen this posted yet:
https://www.canada.ca/en/department-finance/news/2020/03/canada-outlines-measures-to-support-the-economy-and-the-financial-sector.html
The Federal Government announced last Friday that it is providing up to $10 billion to help businesses due to the pandemic, via BDC (Business Development Bank of Canada) and EDC (Export Development Canada).
BDC
"Support for entrepreneurs impacted by the coronavirus COVID-19"
https://www.bdc.ca/en/pages/special-support.aspx?special-initiative=covid19
- Small Business Loan: Up to $100,000 can be obtained online.
- Working Capital Loan: Get extra funds to bridge cash flow gaps and support everyday operations.
- Purchase Order Financing: Increase your cash flow to fulfill domestic or international orders with very flexible terms.
EDC
Export Development Canada (EDC) page:
https://www.edc.ca/en/campaign/coronavirus-covid-19.html
A news article about it is at:
Ottawa announces $10 billion business credit line, plans to roll out stimulus package as COVID-19 spreads https://www.cbc.ca/news/politics/covid-19-fiscal-package-1.5496928
Hey Reddit.
I have a question about offering/ advertising financing. I own a business- which offers customers deferred payments. Typical, no payments for X days (e.g. Net 90), etc. We would like to start advertising this as “financing” and expand it to more of a credit product. Currently, I am told by our attorneys we can’t use the word “Finance” which is why I said “deferred payment” or payment plan before. We do not charge a fee for deferring payment currently, but there might be cases in the future where we might want to.
Who, what do I need to do or get in line to do this?
More explanation: We offer home improvement services and are a general contractor. Many of our customers are preparing to sell their homes or do not have access to credit. We offer to do the work and defer payments. We do not run a credit check, we only verify the equity in their home. Once signed, we do not put a lien on the property either. It works well for those selling their homes and we are comfortable with the risk.
We have cash on hand to cover all the work. From what I understand, we would need to partner with a financial institution who is licensed to issues loans, and can then market this as “financing”.
The issue is, when we partner with a bank, we still want to keep it as a “no credit check loan”. We are willing to guarantee all the funds issued. We are in the State of Maryland but would like to expand.
In an idea situation, we could put our funds in an account with the partnering bank. As work is needed, we could draw on those funds, or a line of credit to pay for the work. Would pre-arrange a fee structure with the bank, and have the ability to also add our fees, on top (whether it is a straight finance fee, or management, if we are doing the work).
Any ideas? Is it possible? I have contacted 2 banks we currently work with and haven’t gotten to far with them- but I am contacting them through regular commercial channels (relationship managers, etc.)
Thanks!
Which would we be more advantageous for a single-member LLC?
Approx 60% used for business and 40% for personal.
I tried a search, and didn't see this posted yet:
https://www.canada.ca/en/department-finance/news/2020/03/canada-outlines-measures-to-support-the-economy-and-the-financial-sector.html
The Federal Government announced last Friday that it is providing up to $10 billion to help businesses due to the pandemic, via BDC (Business Development Bank of Canada) and EDC (Export Development Canada).
BDC
"Support for entrepreneurs impacted by the coronavirus COVID-19"
https://www.bdc.ca/en/pages/special-support.aspx?special-initiative=covid19
- Small Business Loan: Up to $100,000 can be obtained online.
- Working Capital Loan: Get extra funds to bridge cash flow gaps and support everyday operations.
- Purchase Order Financing: Increase your cash flow to fulfill domestic or international orders with very flexible terms.
EDC
Export Development Canada (EDC) page:
https://www.edc.ca/en/campaign/coronavirus-covid-19.html
A news article about it is at:
Ottawa announces $10 billion business credit line, plans to roll out stimulus package as COVID-19 spreads https://www.cbc.ca/news/politics/covid-19-fiscal-package-1.5496928
