Last week we announced the launch of two new Federal loans for businesses: the Jobs and Growth Fund and the Aerospace Regional Recovery Initiative (ARRI). However, many readers of our newsletter and blog were skeptical about them because they were not grants.
We see the trend across all levels of government that grants are being slowly replaced with interest-free loans. Given the tremendous amount of money the governments spent on fighting pandemic, we think that the business community should start getting used to government loans. We expect that they will replace many grants.
The good news, however, is that government loans have three key advantages:
- No interest.
Although the interest rates are generally low, don’t get confused that there is no big difference between 0% and 5%. If you add up all the interest accumulated over the years, you will see significant savings if you apply for government loan.
- No collateral or personal security.
As my banker friend jokes, the bank would have taken a first child as loan security if it was allowed to do so. The government doesn’t even demand your business assets or personal property as security.
- Flexible repayment schedule.
The government loan is repaid over 5-7 years, and the payment schedule may be negotiated at the time of approval. Furthermore, in most cases, you don’t start repayment until after 12 months of the project completion. And the project may last 3-4 years.
I hope the above information helps to demystify some of the misconceptions about government loans.
Fill out the Eligibility Check form now, to make sure you don’t miss this funding opportunity http://www.fgwinc.ca/