Cash Flow Loan (Unsecured)

Small Business Loan from $100k-250k

Cash Flow Loans - WeCanFinancial.caSuitable candidates: Small/Medium Enterprises existing for over a year on the market (exceptions apply), with proven revenue generation, in need of money for business expansion, small office equipment acquisition, new employee salaries, marketing campaign, professional fees and operating capital.

Primary Requirements:

  1. Good credit of the business owner(s) BCN score of 650 and up.
  2. Good net worth of the business owner, preferably higher than the loan amount requested.
  3. Proven revenue generation by the business supported by financial statements/bank statements.

Other requirements that is important to know when applying for this type of small business loans. If applicant is a start-up, proven revenue generation could be substituted by realistic cash flow projection plan, showing planned realistic cash generation strategy that is supported preferably by a real life example, historic performance of previous business if any. Start-up companies are normally considered as in the highest risk category therefore in order to obtain desired financing every little detail in the financial plan, and business plan has to be well thought and supported by real figures.

Most start-up applications are rejected by chartered banks even if it is well capitalized applicant with strong credit and good experience. This happens mostly due to the fact that in order to qualify for small business loans weather it is coming from CSBFL program or any other program, the applicant has to fit into a strict very inflexible set of criteria that is managed by the underwriting division of financial institution. Very often many of the required criteria is not well understood even by the branch advisors who are selling the products and trying to qualify them with underwriters after application is fully structured and complete. Major Disadvantage of this particular arrangement, is when application is rejected, applicants file has a note on it stating that the deal was rejected and most likely this deal will not be able to be approved in a near future at any other branch of the particular bank due to the above mentioned note on file.

Also there are significant requirements on business plan and financial plan, including break even analysis when it comes to qualifying start-up applicants for small business loan like this. Only in depth knowledge of the products and small business financing allows experts to deliver appropriate business plans and financial plan and analysis that fits into banks requirements, even small mistakes may cost the applicants the approval, delay transaction execution and possible completely break up the whole transaction.

For existing businesses obtaining cash flow financing is also challenging mostly due to the fact that many businesses show literally no income, amortize most of the assets at the shortest life span possible, have poor business practices such as bad book keeping habits, unorganized management and office employees. Most of these issues have to be dealt with and advised prior to obtaining cash flow financing. It is imperative to see from financial statements where the company is making money and where it is losing money. If a company is writing off assets as a tax optimization technique it’s important to see the legality of such write offs and whether or not a bank will be lenient to add those write offs to company bottom line in order to show that cash flow loan can be serviced out of company’s operation rather than from any other means. Usually most banks require minimum 125% of debt service ratio in order to approve the loan, using expertise of www.WeCanFinancial.ca after a thorough review and analysis of companies performance, very often we were able to help our clients obtaining financing with 110% debt service ratio and sometimes less.

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