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2. Debt Capital
Debt capital is the amount of money borrowed and
used to establish the business.
• Term Loans (Fixed Assets)
Term loans are used to finance fixed assets,
leasehold improvements and other long-term
business assets. The loans are usually secured by
the assets and standard guarantees.
• Small Business Loan Program
These loans are guaranteed by the federal
government at a rate of no more than prime plus
3 per cent. To be eligible, a small business must
have annual gross revenues of less than
$5 million. Capital is available to finance fixed or
moveable equipment, construct, purchase or
improve a facility. The maximum available is
$250,000. Contact any chartered bank.
3. Working Capital
Working capital is the excess of current assets over
current liabilities. It is the money available to
finance the routine operations of the business.
• Operating Loans
These loans are usually termed lines of credit, and
are used to finance inventory and receivables.
Operating loans usually fluctuate over the year,
according to your business needs. These loans
solve short-term cash flow problems and are
secured by accounts receivable and inventories.
The loans are usually secured by the assets and
standard guarantees.
Potential Sources of Capital
Agriculture Financial Services Corporation
(AFSC)
Alberta Women’s Entrepreneurs (AWE)
AVAC
Banks – small business loans
Business Development Bank of Canada
Farm Credit Canada
Western Economic Diversification
For additional information see the Sources of
Assistance section on page 53.