BDC's new Operating Line of Credit Guarantee(TM) now available through financial institutions
Eligible companies can obtain up to a 40% increase in their line of
credit
MONTREAL, June 25 /CNW Telbec/ - The Business Development Bank of Canada
(BDC) is pleased to announce that entrepreneurs can now request BDC's
Operating Line of Credit Guarantee from their financial institution. The
Guarantee, which enables eligible companies to obtain up to a 40% increase in
their current operating line of credit, is designed to help creditworthy
Canadian businesses overcome temporary liquidity problems.
"As capital remains scarce in the market, an increasing number of
creditworthy entrepreneurs are finding it difficult to get the credit they
need to finance their operations," said Jean-René Halde, President and Chief
Executive Officer at BDC. "The Operating Line of Credit Guarantee helps fill
that gap. Working together with Canada's financial institutions, BDC will help
ensure that businesses have access to the short-term financing they need to
remain successful and grow in the months ahead."
The Operating Line of Credit Guarantee provides financial institutions
with the option of obtaining a guarantee for a portion of their clients'
operating lines of credit - either to increase or to maintain it. Through the
program, financial institutions and BDC will share the risk while providing
increased support to their clients. To request the guarantee, the financial
institutions contact BDC which acts as a behind-the-scenes partner throughout
the process.
Terms and eligibility criteria
The Operating Line of Credit Guarantee applies to operating Lines of
Credit with authorized limits of a minimum of $400,000 and a maximum of
$40,000,000. The guarantee supports a maximum incremental amount, or portion
of the line of credit, of between 25 and 40%. The guarantee amount ranges
between $50,000 up to a maximum of $5 million. The guarantee is valid for a
period of 12 months and can be renewed annually.
Businesses eligible for the guarantee are those who have an operating
Line of Credit secured by short term assets, such as accounts receivable and
inventory. Among other things, the business must be commercially viable, have
been in operation for two or more years, have had an operating Line of Credit
with the financial institution for at least one year and have a positive
tangible net worth.
The new guarantee is provided through Canadian financial institutions.
Interested businesses can obtain further information by consulting with their
financial institution, or on the BDC Web site.
About BDC
BDC is Canada's business development bank. From 100 offices across the
country, BDC promotes entrepreneurship by providing highly tailored financing,
venture capital and consulting services to entrepreneurs. Visit www.bdc.ca for
more information.
