Donald Teuma-Castelletti
OTTER LAKE Jan. 18, 2018
SADC Pontiac have officially announced a new fund in response to aging entrepreneurs in the area, with the hope that a younger demographic will seek to continue the unique businesses.
A new business transition loan is now available, offering anywhere from $5,000 to $50,000 for those looking to take over a pre-existing business.
There are 10 factors to be considered with the risk analysis matrix to determine how much an individual can receive in funding: how long the business has been open; the professional experience of management; credit history; financial flexibility; the market, customers and competition; a prepared marketing strategy; working capital; capitalization; profitability; and repayment capacity.
“If you’re good at all of this, that means you will have a cheaper rate,” said Mario Guay, a business advisor for the SADC Pontiac who presented the new loan.
This loan will have no principal payment for the first six months and have an amortization period of up to 10 years and six months. It was also said that it could be combined with a youth strategy loan, so long as all criteria are met.
“Of course, $50,000 is not enough to take over a [business], I understand that, but it may help to conclude the deal,” said Guay.
Guay suggested that having this loan even present in a bank account would look better for applying for bank loans, with purchases of bigger businesses, such as a farm.
The new loan was announced at an SADC Pontiac presentation on transferring farm ownership on Jan. 18. This loan comes after a survey conducted last summer showed many business owners were preparing for retirement but had no plan in place for finding a replacement to take over their business.
