BDC Financing — Purchase Order Loan
Highlights
This program is designed for you to help manage large purchase orders without the stress. Purchase Order Financing offers up to 90% financing to cover a significant portion of your purchase order amount, with up to 18 months to repay your loan. This means you can take on new business opportunities and increase your cash flow without shortchanging your operations.
Key Benefits:
- Flexible Financing: Align loan repayment to purchase order payment terms, with interest-only payments and one balloon payment at the end of the term.
- Discrete Financing: Loan disbursement directly to you, allowing you to pay suppliers without your clients knowing.
- Currency Flexibility: Money disbursed in Canadian or U.S. funds, helping you avoid currency exchange fluctuations.
By being approved for this program, you can accept larger contracts, purchase inventory quickly, and expand into new markets. It's easier to qualify than you might think, making it a practical solution for your business growth.
Financing Details
Type of Financing: Loan
Repayment Terms and Interest Rates:
- Repayment Term: Up to 18 months to repay the loan.
- Interest Rates: Flexible interest-only payments with one balloon payment at the end of the term.
Eligible Expenses:
- Purchase Orders: Financing up to 90% of the purchase order amount to cover significant portions.
- Inventory: Purchase inventory to fulfill large orders.
- Growth Projects: Funds can be used to expand into new markets, both domestic and international.
- Supplier Payments: Pay suppliers upfront to secure discounts and avoid currency exchange fluctuations.
Restrictions on Use of Funds:
- Funds cannot be used for taxes, deposits, or other payments received from the buyer.
Fees:
- No specific fees mentioned, but subject to approval and certain conditions may apply.
Qualifications
- Must be a business operating in Canada.
- Must have a purchase order (PO) that requires financing.
- Must be able to repay the loan within 18 months.
Business must be able to provide necessary documentation for loan approval.
Disqualifications:
- Businesses unable to provide a valid purchase order.
- Businesses unable to repay the loan within the specified 18-month period.
- Businesses that do not meet the approval conditions set by the financing body.
Description
This program allows your business to borrow up to 90% of the purchase order amount. You can use this money to cover a significant portion of your purchase orders, helping you take on larger contracts without straining your cash flow.
You can use the funds to:
- Accept larger contracts by purchasing inventory to fulfill orders quickly.
- Expand into new markets, both domestic and international.
- Improve profitability by paying suppliers upfront to get special discounts and avoid currency exchange fluctuations.
Flexible repayment terms are a key benefit. You can align loan repayment with your purchase order payment terms, including interest-only payments and one balloon payment at the end of the term. The loan is disbursed directly to you, allowing you to pay suppliers without involving your clients. Additionally, you can avoid dealing with currency exchange fluctuations, as the money can be disbursed in Canadian or U.S. funds.
The loan term is up to 18 months, giving you ample time to repay. This program is an excellent opportunity to grow your business and take on new opportunities with less financial stress.
Program Steps
Gather Necessary Documentation:
- Financial statements (last two years)
- Business plan
- Tax returns (last two years)
- Proof of business registration
- Identification documents for business owners
- Quotes or invoices for intended use of funds
Complete the Application Form:
- Fill out the application form provided by the program.
- Ensure all sections are completed accurately.
Prepare a Detailed Business Plan:
- Outline your business model.
- Include financial projections.
- Detail how the funds will be used to grow or support your business.
Submit the Application:
- Submit the completed application form along with the gathered documentation.
- Ensure all documents are organized and clearly labeled.
Attend an Interview or Meeting (if required):
- Be prepared to discuss your business plan and financial needs.
- Answer any questions the program administrators may have.
Review Loan Terms and Conditions:
- Carefully review the terms and conditions of the loan.
- Understand the repayment schedule, interest rates, and any associated fees.
Sign the Agreement:
- Once approved, sign the loan agreement.
- Ensure you keep a copy for your records.
Receive Funds:
- Upon signing the agreement, the funds will be disbursed to your business account.
- Use the funds as outlined in your business plan.
Maintain Records and Compliance:
- Keep detailed records of how the funds are used.
- Ensure compliance with all terms and conditions of the loan agreement.
Repay the Loan:
- Follow the repayment schedule as agreed.
- Make timely payments to maintain good standing.
