It’s all about cash flow.
Positive Cash flow is when you have more money coming in than goes out each month. Simple to understand but for many of us, this just isn’t happening right now.
Continue reading “It’s all about cash flow.”
Help for small and medium sized business owners
The Business Development Bank of Canada (BDC) is devoted exclusively to entrepreneurs.
Here is a quick outline of some BDC Financing Options
Online Financing:
- Been in business for more than 2 years (at least 24 months of sales)
- Looking for a loan of $100,000 or less
- They can fill in the application using the link below. If they don’t have a rep, leave it blank
https://www.bdc.ca/en/financing/pages/default.aspx
If you require more than $100,000, there is another program being offered by BDC which the details have yet to come out. Rumor has it will be based on completion of (a) statement of personal affairs form by each shareholder (b) application for financing and (c) last 2 years of financials prepared by a CPA
Support for entrepreneurs impacted by the coronavirus COVID-19
Effective March 18, 2020, new relief measures for qualified businesses include:
- Working capital loans of up to $2 million with flexible repayment terms such as principal postponements for qualifying businesses;
- Postponement of payments for up to 6 months, free of charge, for existing BDC clients with total BDC loan commitment of $1 million or less;
- Reduced rates on new eligible loans;
- Additional details regarding Business Credit Availability Program (BCAP) measures, including industry specific support, to be announced in the coming days.
View BDC.ca special support initiative to learn more.
As always, I welcome your comments, calls and questions.
Steve Garganis 416 224 0114 steve@mortgagenow.ca
Your best interest is my only interest.
My advice is simple: Over 50? Get a secured line of credit while you can qualify.
Contrary to media reports about our ‘record personal debt levels’, it’s extremely prudent to ensure you have access to emergency money.
The line of credit popularity that took place in the ’90s wasn’t a bad thing. It allowed us to borrow at low rates to invest or spend as needed. Many successful investors have been doing this for decades. Borrowing to invest makes smart financial success. Don’t let anyone tell you differently.
We’re seeing more reasons for Canadians to get a secured line of credit now: Age; Income; and Qualification.
Continue reading “My advice is simple: Over 50? Get a secured line of credit while you can qualify.”
50+ with little or no Mortgage? You Need a Line of Credit!
Contrary to media reports about our ‘record personal debt levels’, it’s extremely prudent to ensure you have access to emergency money.
The line of credit popularity that took place in the ’90s wasn’t a bad thing. It allowed us to borrow at low rates to invest or spend as needed. Many successful investors have been doing this for decades. Borrowing to invest makes smart financial success. Don’t let anyone tell you differently.
We’re seeing more reasons for Canadians to get a secured line of credit now: Age; Income; and Qualification.
Continue reading “50+ with little or no Mortgage? You Need a Line of Credit!”
BMO announces lower rate IF you take a shorter amortization!
Have you heard the big news? BMO lowers rate their best discounted 5 year fixed rate to 3.49% to encourage Canadians to take an amortization 25 years or less. They claim they want to encourage Canadians to pay their debt off faster….. Sounds nice and in keeping with the Christmas spirit, doesn’t it?
Ok, before we get all warm-hearted and teary eyed, let’s take a closer look at what this really is. First, this IS NOT the best discounted fixed rate in the market. A good Mortgage Broker can get you 3.39% out there with no restrictions on amortization (even lower with some No Frills mortgage products). We all want to pay our mortgage off faster, but choosing a shorter amortization only limits your future options… My recommendation to almost all my clients is to take the longest amortization possible……
It’s not that I want you to have a mortgage forever, it’s about having options…. I always take a ‘what if’ approach…. Follow me for a minute…
Let’s say you had a $300,000 mortgage and you took this BMO 3.49% rate, your payments on a 25 year amortization with be $1496.23/mth. But if you took a truly discounted mortgage at 3.39% with a 35 year amortization, your minimum payment would be $1216.75/mth. You could always INCREASE your payment to accelerate your amortization to 25 years or shorter.
Now, let’s say you lost your job, had some unexpected expense come up, or a financial emergency or just needed to lower your payments. If you chose 25 year amort, then you are stuck with that payment.. if you chose 35 year, then you can always go back to that lower payment… That’s the flexibility that we want. It’s not about taking longer to pay, it’s about having the option to reduce your payment if needed.
LET’S NOT FORGET THE BANKS HISTORY WHEN IT COMES TO RATES
In keeping with the Christmas theme, Mr. Potter would be approve the Banks latest strategy. In case you didn’t know, the 5 year Canada Bond is in record low territory…. hovering at around 1.31%… the 5 year fixed rates are priced from the bonds… the spread is normally around 1.25% to 1.40%… and yet today, the spread is 2.18%…. WOW! and why? TO MAXIMIZE PROFITS. This is has nothing to do with wanting to helps Canadians. 5 year fixed rates should be under 3.00% but they aren’t, because the Banks want to maximize profits.
VARIABLE RATE PRICING IS AT 1990’s LEVEL
Variable rate pricing went from Prime less 0.90%, 3 years ago, to Prime plus 1.00% in during the October 2008 US mortgage crisis, to Prime less 0.75% just six months ago…. to Prime plus 0.20% today. That’s right, Prime PLUS 0.20%. Haven’t seen this pricing since the ’90s. There are no fundamental reasons for this… it’s simply profit taking by the banks.. they are forcing us to take a 5 year fixed rate. Sure, today’s 5 year fixed rates are at historical lows, so there is very little attention being given… but when rates go up, and they will in a few years, we will start to ask for more competitive products and better options other than a 5 year fixed rate…. (Can you see Mr. Potter’s grin getting larger?).
My advice… think about who your banker works for….and who your Mortgage Broker works for….
