As a small or medium-scale business in Canada, you might be wondering how to get a BDC 0% interest loan.
Your business needs all the funds it can get, as a recession is predicted to hit the country in late 2023. As the country’s economic growth slows down, it is a good time to access up to $100,000 in BDC 0-interest loans.
The BDC Business Development Bank of Canada offers 0% loans through the Canada Digital Adoption Program (CDAP). To access this loan, your business must meet the eligibility requirements, including completing a CDAP through the Boost Your Technology stream.
Afterward, you can start the application process on the Innovation, Science, and Economic Development (ISED) site.
If you’re ready to get your hands on this loan, this piece is for you. Here you’ll learn how to get a BDC 0% interest loan, what the loan covers, and more. Let’s get started with a brief discussion of CDAP.
The Canadian government created the CDAP to help businesses within its provinces adopt emerging digital technologies. Therefore, they make interest-free loans accessible to business owners to cater to their digital adoption plans.
That way, the BDC interest-free loan provided through the CDAP can be used for two main things. They are to employ a digital advisor and bring the business up to speed regarding the latest technologies.
The job of this advisor would be to develop a digital adoption plan that suits your business.
However, the CDAP loan is of two types (streams). They are Grow Your Business Online and Boost Your Business Technology.
The former gives small businesses access to grants of up to $2,400, while the latter provides access to up to $100,000. Since you’re looking for how to get a BDC 0% interest loan, it falls under the latter.
The BDC interest-free loan, also known as a grant, is a Boost Your Technology grant from the CDAP. Once a business is eligible for the $100,000 grant and has been credited, the loan is payable within five years.
Generally, BDC small business loan interest rates are low. This is because they are based on the prime rate that the Bank of Canada and each financial institution set. Some BDC interest rates are paid without the principal amount for the first 6 to 12 months.
Your business might need funding, and you want to avoid bothering with any BDC loan interest rate but want the interest-free option. If this is you, here is a step-by-step guide on how to get a BDC 0% interest loan.
The first step is to meet the eligibility requirements. These requirements are outlined below:
How to go about these has been explained in the following steps:
Visit the ISED Website on your mobile browser or personal computer and apply for funds. Follow the prompts until the CDAP approves you.
The next step after CDAP approval is to create a digital adoption plan. You’d have to work with a digital adoption advisor. Once the program has been created, submit it for approval.
Working with a digital adoption advisor costs money, and the grant covers about 90% of this cost. So, you’d be required to submit your invoices to be compensated. You might get up to $15,000.
A link will be sent to the email you provided when you sought approval from the CDAP. Visit your email and check both your inbox and spam folder for the link. Click on the link to apply for the BDC 0% interest loan. Then, follow the prompts until you receive the grant.
Having understood how to get a BDC 0% interest loan, you might be wondering what expenses you can use the loan to cover. Below is a list of what up to $100,000 can be used for.
Whether you own a small business or a medium-scale one in Canada, you should know how to get a BDC 0% interest loan. Onboarding the latest technologies in your business can help you improve your production and sales.
This is the main reason why the government designed this interest-free loan. The above piece will show you a clear path on how to access the loan. You should research the Grow Your Business Online loan option under the CDAP, also provided by the BDC Business Development Bank of Canada.
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A BDC loan's application process and approval are relatively more accessible than other traditional loan options in Canada. Most BDC loan approvals depend on how long your business has existed and the amount of revenue it generates.
The general formula for calculating BDC loan rates is as follows: The BDC interest rate equals the current floating base rate (CFB) plus variance based on your personal and business information. That is, the BDC rate = CFB rate + Variance.
The documents needed for a BDC loan are a comprehensive business plan, investments and collateral, and financial projections. You'd also need to provide the credit history of your business and clear objectives.