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Guidelines

Section A: Making a CSBF Loan

9 Checklist

Lenders may find the following checklist useful in assessing CSBF loan eligibility:

  • check box Business is eligible (see Item 1);
  • check box Borrower is eligible (see Item 3);
  • check box Gross annual revenue of business is not or will not be greater than $5 million (see Item 1);
  • check box Aggregate of the outstanding loan balances to the borrower and related borrowers is not greater than $500,000 of which the maximum amount of $350,000 can be used to finance the purchase or improvement of equipment and the purchase of leasehold improvements (including outstanding loan balances guaranteed under the Small Business Loans Act) (see Item 3);
  • check box Assets financed fall within the prescribed classes (see Item 4);
  • check box Percentage of assets financed does not exceed 90% of the eligible cost of the assets (see Item 5.1);
  • check box Date of purchase or commitment to purchase the assets is within 180 days before the day the loan is approved (see Item 5.1);
  • check box Expenditures or commitments were not previously financed by the borrower on a term loan (see Item 5.2);
  • check box Appraisals and update to appraisal, if applicable, have been made and received, where applicable (see Item 5.3);
  • check box Evidence is on file to support the cost of assets financed (i.e. Invoices, contracts, purchase and sale agreements, etc.) (see Item 5.1.1);
  • check box Evidence is on file to support that the assets financed by the loan were paid by the borrower (i.e. Cancelled cheques, credit card receipts, vendor's receipted invoice, or vendor's declaration) (see Item 5.1.1);
  • check box The 50% rule has been observed, where applicable (see Item 5.4);
  • check box The three year rule has been observed, where applicable (see Item 5.4);
  • check box Term of loan is not greater than 10 years (see Item 6.1);
  • check box First scheduled payment of principal and interest is within one year of the date the first disbursement of the loan funds is made (see Item 6.1);
  • check box Rate of interest does not exceed 3% above the prime rate or the posted single family residential mortgage rate (see Item 6.2);
  • check box No fees, service charge, or charge of any kind is payable to the lender by the borrower, other than the registration fee or other prescribed fees or charges (see Item 6.3);
  • check box Insurance is held over the assets given as security;
  • check box Required security has been/will be taken (see Item 7.2);
  • check box Unsecured personal guarantees or suretyships, in aggregate, do not exceed 25% of the amount of the loan disbursed. This limit does not apply to corporate guarantees or suretyships (see Item 7.4).
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