Types of loans available to SMB's
Why every business should be considering bridge loans.
The COVID-19 lockdown has been devastating to many Canadian businesses, and the sad reality is that many of them will not survive this. Federal, provincial, and local governments have all introduced programs to help such as the Canadian Emergency Wage Subsidy (CEWS) which covers 75% of an employee’s wages for businesses of all sizes who have lost at least 15% of their revenue due to COVID-19, and the FedDev Regional Relief and Recovery Fund which provides interest-free loans to small and medium sized businesses who have lost revenue during this pandemic.
Through programs involving subsidies, rent relief, repayable loans and payment deferrals on business costs such as income tax and WSIB, it is hoped that more businesses will have the support they need to survive the COVID-19 pandemic.
As a business owner of a small to medium enterprise (SME), it is important to take advantage of every program that you qualify for to ensure your business can weather this storm.
In addition to the government loans and relief programs that are currently being offered, you may want to consider other types of loans as well. At CORFinancial, we offer our SME clients the following:
Commercial Mortgage Refinancing: if you own your own building, you may be able to reduce the amount of interest you pay and/or reduce your total monthly payment through a process called refinancing. This is where you break your first mortgage and get a new one at a lower interest rate. Since the Bank of Canada has lowered interest rates a number of times since COVID-19 started, this may be a good time for you to refinance your commercial mortgage. Keep in mind however that by breaking your first mortgage, you will incur a financial penalty so you will want to consult with one of the loan experts at CORFinancial to help you determine whether this is a good strategy for you.
Construction Financing: Believe it or not, there are some SMEs that are thriving under the current conditions. If your business is one of them, you might be looking to expand and in need of more space. At CORFinancial, we can help you get the financing you need to build your next project.
Working Capital: Some businesses are going to need additional funding, in excess of the Gov’t programs, to fund day to day operations . With creative working capital financing, we can help them do that.
Accounts Receivable Loans: The financial challenges of some businesses have been compounded by the fact that they have customers who have not been able to pay their bills. Accounts receivables however are assets which your SME can get a loan against. This can help keep you going until your customers are able to pay.
Purchase Order and Inventory Financing: Large orders can be problematic for SMEs if they do not have the inventory or the funds to fill the order. Purchase order or inventory financing can help.
Why every business should be considering a bridge loan during COVID-19
A Bridge Loan is a short-term loan that businesses can use until another expected event happens – such as getting funding from another source, payment on a contract, the sale of property, or re-opening after COVID-19. It is called a bridge loan because it is quite literally meant to bridge the gap.
For SMEs across the country, this has been a time of unprecedented uncertainty. At some point, the economy will return but without sufficient funding, it may not happen soon enough for some businesses. Access to bridge loans can help companies survive.
Contact CORFinancial today!
If you would like to learn more about bridge loans or any of the types of financing that we offer for SMEs, contact us today. Together, we can help you get through the COVID-19 lockdown.