Manufacturing and Processing Assistance - Operating Loan
Highlights
This program is designed for businesses like yours that are involved in manufacturing and processing. It offers term loans for purchasing capital assets and operating loans for managing accounts receivable and inventory. This means you can get the financial support you need to grow and sustain your business.
Key Benefits:
- Capital Loans: Up to 80% financing for purchasing land, buildings, and specialized equipment. Flexible repayment options aligned with your cash flow.
- Intermediate Term Loans: Financing for asset improvements with terms up to 10 years.
- Operating Loans: Up to 100% financing for inventory and day-to-day operating costs, based on purchase orders and signed contracts.
Why Apply?
- Flexible Financing: Tailored to your business needs with terms up to 20 years.
- Government-Backed: Provides security and confidence in your investment.
- Ease of Qualification: Designed to be accessible for businesses like yours.
By being approved, you can secure the funds needed to expand, improve, and manage your operations effectively. This program offers a reliable and supportive financial solution, making it easier for you to focus on growing your business.
Financing Details
Type of Financing:
- Capital Loan: For purchasing and refurbishing capital assets, and sometimes for debt restructuring.
- Intermediate Term Loan: For improvements to business assets, excluding non-income-generating vehicles.
- Operating Loan: For purchasing inventory and covering day-to-day operating costs.
Repayment Terms and Interest Rates:
- Capital Loan: Maximum term of 20 years. Flexible repayment options aligned with business cash flow. Secured by first charge on real property or financed asset.
- Intermediate Term Loan: Repayment term equals the asset's expected life, up to 10 years.
- Operating Loan: Up to 100% financing, repaid from inventory sales based on cash flow.
Eligible Expenses:
- Capital Loan: Land, buildings, specialized equipment, and in some cases, production inventory.
- Intermediate Term Loan: Improvements to business assets.
- Operating Loan: Inventory purchases and day-to-day operating costs.
Ineligible Expenses:
- Intermediate Term Loan: Vehicles that do not directly contribute to business income or sales.
Fees:
- No specific fees mentioned for these loans.
Qualifications
- Must carry on business, or intend to carry on business, in Prince Edward Island.
Must operate a business that produces a product by mechanical method from a raw material that is altered to add value.
Disqualifications:
- Vehicles that do not directly contribute to the business’s income or sales.
Description
This program offers your business term loans for purchasing capital assets and operating loans for managing accounts receivable and inventory.
Capital loans can be used to buy land, buildings, specialized equipment, or even for debt restructuring. These loans have a maximum term of 20 years and come with flexible repayment options that match your business’s cash flow. The loan amount can cover up to 80% of the purchase price or fair market value of the assets.
Operating loans provide up to 100% financing for inventory purchases and day-to-day operating costs. These loans are based on your company’s cash flow and are repaid from the sale of inventory.
This program is designed to support your business by offering financial assistance with favorable terms, ensuring you can invest in essential assets and manage daily operations effectively.
Program Steps
Gather Required Documentation:
- Financial statements (balance sheet, income statement)
- Business plan
- Purchase orders and signed contracts/agreements
- Quotes for land, buildings, specialized equipment, or production inventory
- Proof of business registration and operation in the province
Complete the Application Form:
- Access the application form from the Finance PEI website or contact their office to obtain it.
- Fill out all required fields accurately, including business information, loan amount requested, and intended use of funds.
Prepare a Detailed Proposal:
- Outline the purpose of the loan, including how the funds will be used to purchase capital assets, inventory, or for operating costs.
- Include a repayment plan that aligns with your business’s cash flow.
Submit the Application:
- Submit the completed application form and all required documentation to Finance PEI.
- You can submit the application in person, by mail, or electronically as specified by Finance PEI.
Review and Follow-Up:
- Finance PEI will review your application and may request additional information or clarification.
- Be prepared to provide any additional documentation or details promptly.
Approval and Loan Agreement:
- Upon approval, review the loan terms, including the interest rate, repayment schedule, and any associated fees.
- Sign the loan agreement and provide any required security or collateral documentation.
Receive Loan Funds:
- Once the agreement is finalized, the loan funds will be disbursed.
- Use the funds as outlined in your proposal to purchase capital assets, inventory, or cover operating costs.