Purpose of the Program
The Small Business Loans Association Program encourages diversification of the Saskatchewan economy and supports community economic development by making funding available, through community-run organizations, to non-traditional entrepreneurs. Thousands of small businesses have been assisted, and hundreds of Small Business Loans Associations (SBLA) have been formed, since the program was introduced in 1989.
Benefits of the Program
Retention and growth of businesses in a community is critical in retaining the population and tax base of the community and a stable population is key to retaining schools and hospitals.
Who May Borrow from an SBLA?
Any one business is eligible for the maximum $15,000 SBLA loan including any entrepreneur that has experienced difficulty in obtaining financing through traditional means. Businesses not eligible for assistance are those engaged in direct farming, exploration (e.g. mining and oil extraction), residential real estate and multi-level marketing. Charitable organizations also do not quality for assistance.
In making loans, SBLA generally judges businesses on their ability to create jobs and add services to communities. The ability of businesses to access traditional bank or credit union financing is also considered, as the intent of the program is to provide help to entrepreneurs who otherwise might not get started.
What are the Terms of an SBLA Loan?
Businesses can use SBLA loans to purchase assets, such as equipment. Monies cannot be used for operating expenses or for repayment of existing debt.
Loans are granted at competitive interest rates, which vary with each association up to a maximum of 10 percent per year. Businesses have up to five years to repay their loans. It is preferred that a client obtain all his/her loans from only one SBLA.
The principle repaid on a loan is returned by the SBLA to Saskatchewan Industry and Resources. The SBLA retains the interest to cover its administrative costs.
How Do We Apply?
To borrow from an SBLA, contact your local association for program information and application forms. If you do not know the SBLA in your area, contact Saskatchewan Industry and Resources' SBLA Program Office (see below) for referral to the association nearest you. You will be required provide the association with a completed application, a business plan and a signed demand promissory note and general security agreement along with an administration fee. The SBLA will then review and approve or decline your loan.
To establish a Small Business Loan Association in your area, contact Saskatchewan Industry and Resources' SBLA Program Office for information and preliminary review. Once you have completed your application form and incorporated your association, the department will review your application and, if it is successful, provide your association an offer of credit at an appropriate level.
What is a Small Business Loans Association (SBLA)?
Community-based interest groups, co-operatives, corporations, Rural Development Corporations and Regional Economic Development Authorities can form SBLAs. Under The Business Corporations Act or the Co-operatives Act, the SBLA can incorporate as either "for profit" or "non-profit".
Once approved and incorporated, an SBLA may access an interest-free revolving line of credit of up to $200,000 from Saskatchewan Industry and Resources. The SBLA, in turn, uses this line of credit to make loans of up to $15,000 to new and existing businesses.
To obtain more information, contact:
Yellowhead REDA Inc.
Kim Wondrasek - General Manager
Box 159, 117 Carl Ave. E.
Langenburg, SK S0A 2A0
Phone/Fax: (306) 743-5175
Email: edo@yellowheadreda.com
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