Term loans
maximum $1,000,000 can be used to finance:
purchase or improvement of land or buildings used for commercial purposes
purchase or improvement of new or used equipment
purchase of new or existing leasehold improvements, i.e., renovations to a leased property by a tenant
intangible assets and working capital costs
For example, you can use a term loan to finance:
commercial vehicles
hotel or restaurant equipment
computer or telecommunications equipment and software
production equipment
costs to buy a franchise
Line of Credit
Maximum of $150,000 for Lines of credit can be used to pay for working capital costs, that is, day-to-day operating expenses of the business.
Interest rates
For term loans, the interest rates are determined by your financial institution and may be floating or fixed.
Floating: The maximum chargeable is the lender's prime lending rate plus 3%.
Fixed: The maximum chargeable is the lender's single family residential mortgage rate for the term of the loan plus 3%.
For lines of credit, the maximum chargeable is the lender's prime lending rate plus 5%.
Registration fee
For term loans, the 2% registration fee is based on the total amount loaned under the program.
For lines of credit, the 2% registration fee is based on the total amount authorized.
Registration fees must be paid by the borrower to the lender and they may be financed.
Financing terms
Lenders have the option to take an unsecured personal guarantee.
For real property and equipment, security must be taken on the assets financed. For leasehold improvements, intangible assets, working capital costs and when financing a line of credit, the lender must take security on other business assets.