Eligible companies can obtain up to a 40% increase in their line of credit
Montréal, Quebec, June 25, 2009 – 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.
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