Happy New Year 2015, from WeCanFinancial.
We begin this 2015 with a forecast and update guidelines for small business loans, operating lines and commercial loan transactions in a new 2015.
Small business loans, in Canada are not expected to become much easier to get. Financial regulations are expected only to get tighter, therefore obtaining cash flow loans, or loans without specific spending target will be tough or even tougher to achieve. Most companies and entrepreneurs looking for small business loan, to expand their business, further develop operations or invest into research and development, will have very similar difficulties as in 2014. As we normally advise our clients, it’s important to start right. Preparing well written, professional business plan is always a must when applying for small business loan with any lender. Quality of information, business data and statistics will dictate how much weight or trust will be placed on the business plan by the underwriter who is handling the financing file. Operating capital, and operating lines of credit as usual will require a substantial amount of disclosure to the bank that is willing to extend credit to the business and business owner. WeCanFinancial.ca strongly encourage entrepreneurs to speak to our knowledgeable associates about any and every financing need they might have or planning to have.
Business and Commercial loans, commercial mortgages are going to be very popular in 2015. Commercial interest rates are still at the lowest levels in the history of commercial lending in Canada. Over last 2 weeks, most fixed deals on industrial/office segment of commercial real estate, were placed at 4.0%-4.65% for 5 year fixed paper. Entrepreneurs are enjoying very cheap cost of money right now, the situation looks even better knowing that average appreciation of the commercial/industrial assets in Toronto area is at 4%-5% per year, making ownership of commercial real estate extremely profitable.
Multi res segment and land financing are expected to be very strongly performing segments this year as well. With CMHC backed 5 year multi res commercial mortgage priced close to 2.5%, whoever has the ability to put their hands on multi residential asset class most likely will do so in 2015. The demand of the multi res asset is so strong that most contracts take place privately or through exclusive listing with one real estate brokerage to save on liquidation commissions and closing costs.
Development land financing in Ontario is expected to be as strong as in 2014 or even stronger. Interest rate for prime development land financing right now is close to 6.25% if it is coming from institutional lenders, or 7%-9% if entrepreneurs are financing through private lenders. WeCanFinancial.ca strongly advice real estate developers to review financing options offered by our firm, knowing how much money could be save if land financing is structured properly. The growth dynamics of land values is expected to be at the level of 2014, and bring even higher profitability to most real estate developers. Row land values in major cities boundaries is expected to grow at the rate of 8%-9% per year over next 2 years. Lot values are expected to grow at the rate of 12%-14% per year. The most dynamic cities in Ontario are Barrie, Stouffville, Markham, Orangeville and Oakville, most highly lucrative deals we expect in 2015 will be closed in these jurisdictions. Entrepreneurs interested to get into land development and finance their operations, could learn a lot from our knowledgeable associates, and we are here to help and finance.
Equipment financing and government guaranteed loans will be as popular as usual in Ontario in 2015. Businesses always need money to purchase equipment to make more money, the same as to renovate and make their places of operations more suitable for expansion and profit. Government guaranteed small business loans, despite of the difficulties of obtaining them will be very popular subject among entrepreneurs and business owners in 2015, and our stuff at WeCanFinancial.ca is ready to help!