Borrowing money for the first time in Canada
Aug 17th 2019, 4:06 am
#16
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Re: Borrowing money for the first time in Canada
I know, I don’t particularly want to secure against the house but the interest rates are high on the unsecured lines of credit.
I still have the issue of them not granting me anything though due to no credit history and a “large” uk mortgage. I was even initially turned down last year for a measly $500 overdraft.
Aug 17th 2019, 10:46 pm
#17
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Re: Borrowing money for the first time in Canada
It's unfortunate, but any rental property with a loan against it is going to adversely effect the amount of money you can borrow.
The mortgage is a liability, but it is not offset by the rental as this income can cease at any time, so the mortgage payments plus any associated costs of ownership will be set against the total amount you can borrow.
Not declaring, if asked about other debts in your application, could be considered fraud, though you would have to seriously piss off the lender for them to pursue that,
The mortgage is a liability, but it is not offset by the rental as this income can cease at any time, so the mortgage payments plus any associated costs of ownership will be set against the total amount you can borrow.
Not declaring, if asked about other debts in your application, could be considered fraud, though you would have to seriously piss off the lender for them to pursue that,
Aug 18th 2019, 12:07 am
#18
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Re: Borrowing money for the first time in Canada
You obviously went to the wrong bank and spoke with an incompetent lender. I would expect you to pledge your home to the bank for the loan. If you’re not prepared to do so then you’re not prepared to place your assets behind the loan, so NO DEAL. It’s that simple. You’re not putting anything into the deal. The bank’s lending you depositors funds and has a duty to protect them to the fullest.
Aug 18th 2019, 12:15 am
#19
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Re: Borrowing money for the first time in Canada
Firstly, why is the company giving employees the chance to put money into the company? Is this a long standing, successful arrangement, or is this a new thing? If this is the first time they're doing it, what's their rationale? Are they in financial trouble, have their profits been declining, do they have a lot of debt? Do they want the funds to enable them to expand their business? Before putting any money into the company, research their financial records over the past five years. The UK has an online site called Companies House that provides full financial information for all registered companies, does Canada have something similar?
Also, how does the 'better salaries' work? Will the contract state that your husband receives a set payment amount every fortnight/month/year, or is any increase dependent on how much profit the company makes in any given period? Will the contract include a 'get out' clause, ie can your husband request his investment be returned?
If the company goes bust, what will the contract state re his status? Is the money he's putting into the company considered a loan, in which case would he be a secured creditor, thus being one of the first in line for any funds remaining, or would he be an unsecured creditor? Or is he actually buying shares in the company? Or, is he buying into the company as a part-owner and thus proportionately liable for its debts?
Lots to consider! I find with investing that it's vital to think of the worst that could happen, and whether or not you have the financial resources to withstand any losses/liabilities. Wishing you the best of luck.
Last edited by spouse of scouse; Aug 18th 2019 at 12:18 am.
Aug 18th 2019, 1:41 pm
#20
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Re: Borrowing money for the first time in Canada
It's unfortunate, but any rental property with a loan against it is going to adversely effect the amount of money you can borrow.
The mortgage is a liability, but it is not offset by the rental as this income can cease at any time, so the mortgage payments plus any associated costs of ownership will be set against the total amount you can borrow.
Not declaring, if asked about other debts in your application, could be considered fraud, though you would have to seriously piss off the lender for them to pursue that,
The mortgage is a liability, but it is not offset by the rental as this income can cease at any time, so the mortgage payments plus any associated costs of ownership will be set against the total amount you can borrow.
Not declaring, if asked about other debts in your application, could be considered fraud, though you would have to seriously piss off the lender for them to pursue that,
I’m asking for such a small amount against a property that no other bank is invested in, should I default on the loan they get a property that they can easily sell to cover it. It’s a win win for them.
I feel eel like this is just a computer says no situation.
Aug 18th 2019, 1:43 pm
#21
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Re: Borrowing money for the first time in Canada
You obviously went to the wrong bank and spoke with an incompetent lender. I would expect you to pledge your home to the bank for the loan. If you’re not prepared to do so then you’re not prepared to place your assets behind the loan, so NO DEAL. It’s that simple. You’re not putting anything into the deal. The bank’s lending you depositors funds and has a duty to protect them to the fullest.
Aug 18th 2019, 2:07 pm
#22
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Re: Borrowing money for the first time in Canada
I feel a bit embarrassed to be posting this as I'm sure you've already done your due diligence on the company your husband works for, but just in case....
Firstly, why is the company giving employees the chance to put money into the company? Is this a long standing, successful arrangement, or is this a new thing? If this is the first time they're doing it, what's their rationale? Are they in financial trouble, have their profits been declining, do they have a lot of debt? Do they want the funds to enable them to expand their business? Before putting any money into the company, research their financial records over the past five years. The UK has an online site called Companies House that provides full financial information for all registered companies, does Canada have something similar?
Also, how does the 'better salaries' work? Will the contract state that your husband receives a set payment amount every fortnight/month/year, or is any increase dependent on how much profit the company makes in any given period? Will the contract include a 'get out' clause, ie can your husband request his investment be returned?
If the company goes bust, what will the contract state re his status? Is the money he's putting into the company considered a loan, in which case would he be a secured creditor, thus being one of the first in line for any funds remaining, or would he be an unsecured creditor? Or is he actually buying shares in the company? Or, is he buying into the company as a part-owner and thus proportionately liable for its debts?
Lots to consider! I find with investing that it's vital to think of the worst that could happen, and whether or not you have the financial resources to withstand any losses/liabilities. Wishing you the best of luck.
Firstly, why is the company giving employees the chance to put money into the company? Is this a long standing, successful arrangement, or is this a new thing? If this is the first time they're doing it, what's their rationale? Are they in financial trouble, have their profits been declining, do they have a lot of debt? Do they want the funds to enable them to expand their business? Before putting any money into the company, research their financial records over the past five years. The UK has an online site called Companies House that provides full financial information for all registered companies, does Canada have something similar?
Also, how does the 'better salaries' work? Will the contract state that your husband receives a set payment amount every fortnight/month/year, or is any increase dependent on how much profit the company makes in any given period? Will the contract include a 'get out' clause, ie can your husband request his investment be returned?
If the company goes bust, what will the contract state re his status? Is the money he's putting into the company considered a loan, in which case would he be a secured creditor, thus being one of the first in line for any funds remaining, or would he be an unsecured creditor? Or is he actually buying shares in the company? Or, is he buying into the company as a part-owner and thus proportionately liable for its debts?
Lots to consider! I find with investing that it's vital to think of the worst that could happen, and whether or not you have the financial resources to withstand any losses/liabilities. Wishing you the best of luck.
He would be buying in as a part owner. The company was started by a husband & wife who have since split and she wants out. My husband is very good friends with his boss who doesn’t want just anyone buying in.
Our intention when we came here was always to start our own business but we have been really indecisive about what we want to do and what would work in this area. This seems like a good option as it’s already established (though only 3years old) and the buy in cost is pretty cheap.
He he would move to a full time salary, essentially what the ex wife was getting. I can take over the bookkeeping which will be more hours and a better rate than one of my current jobs.
We have seen the books and all the financial info and although no one will be getting rich anytime soon the company has always broken even which isn’t bad for a new business.
I know there are risks but if we keep going as we are we are not going to get anywhere.
Aug 18th 2019, 9:37 pm
#23
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Re: Borrowing money for the first time in Canada
confused_uk
Sorry I did not catch which province you are in but have you considered another route.
As you are intending to buy into a business, have you considered a loan specific for that? I recently gave a presentation to an organisation called the Community Business Development Corporation (CBDC) here in Atlantic Canada. I know they are throughout Canada but not sure if they are CBDC everywhere. Part of what they do is to provide low interest loans to persons starting or buying into a business.
They are none profit, local community based and also provide assistance and mentoring.
This is the Atlantic Canada one CBDC | Community Business Development Corporations
Also if you entered Canada on a provincial scheme, you could consider approaching your provincial government innovation/ invest organisation. They are in most provinces linked to the immigration system and provide business funding mentoring etc.
Hope it helps Good Luck
Sorry I did not catch which province you are in but have you considered another route.
As you are intending to buy into a business, have you considered a loan specific for that? I recently gave a presentation to an organisation called the Community Business Development Corporation (CBDC) here in Atlantic Canada. I know they are throughout Canada but not sure if they are CBDC everywhere. Part of what they do is to provide low interest loans to persons starting or buying into a business.
They are none profit, local community based and also provide assistance and mentoring.
This is the Atlantic Canada one CBDC | Community Business Development Corporations
Also if you entered Canada on a provincial scheme, you could consider approaching your provincial government innovation/ invest organisation. They are in most provinces linked to the immigration system and provide business funding mentoring etc.
Hope it helps Good Luck
Aug 18th 2019, 10:02 pm
#24
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Re: Borrowing money for the first time in Canada
confused_uk
Sorry I did not catch which province you are in but have you considered another route.
As you are intending to buy into a business, have you considered a loan specific for that? I recently gave a presentation to an organisation called the Community Business Development Corporation (CBDC) here in Atlantic Canada. I know they are throughout Canada but not sure if they are CBDC everywhere. Part of what they do is to provide low interest loans to persons starting or buying into a business.
They are none profit, local community based and also provide assistance and mentoring.
This is the Atlantic Canada one CBDC | Community Business Development Corporations
Also if you entered Canada on a provincial scheme, you could consider approaching your provincial government innovation/ invest organisation. They are in most provinces linked to the immigration system and provide business funding mentoring etc.
Hope it helps Good Luck
Sorry I did not catch which province you are in but have you considered another route.
As you are intending to buy into a business, have you considered a loan specific for that? I recently gave a presentation to an organisation called the Community Business Development Corporation (CBDC) here in Atlantic Canada. I know they are throughout Canada but not sure if they are CBDC everywhere. Part of what they do is to provide low interest loans to persons starting or buying into a business.
They are none profit, local community based and also provide assistance and mentoring.
This is the Atlantic Canada one CBDC | Community Business Development Corporations
Also if you entered Canada on a provincial scheme, you could consider approaching your provincial government innovation/ invest organisation. They are in most provinces linked to the immigration system and provide business funding mentoring etc.
Hope it helps Good Luck
We are in NS. I thought the credit union would treat us like it was a business loan knowing what it was for and that the business is with them but they transferred us over to the personal banking side so 🤷♀️
Aug 18th 2019, 11:42 pm
#25
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Re: Borrowing money for the first time in Canada
You are welcome.
We also live in NS, its was the NS CBDC I presented to.
Problem with trying to obtain the money as a mortgage or home equity loan is they apply the mortgage stress test to your ability to repay. You must be able to meet the repayments at 5x the current rate, not necessarily doable if you are on limited income.
I would always recommend if possible, keeping any finance for business away from your personal assets if you can. Obtaining the money as a business loan rather than personal will help with that.
We also live in NS, its was the NS CBDC I presented to.
Problem with trying to obtain the money as a mortgage or home equity loan is they apply the mortgage stress test to your ability to repay. You must be able to meet the repayments at 5x the current rate, not necessarily doable if you are on limited income.
I would always recommend if possible, keeping any finance for business away from your personal assets if you can. Obtaining the money as a business loan rather than personal will help with that.
Aug 19th 2019, 12:57 am
#26
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Location: SW Ontario
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Re: Borrowing money for the first time in Canada
You are welcome.
We also live in NS, its was the NS CBDC I presented to.
Problem with trying to obtain the money as a mortgage or home equity loan is they apply the mortgage stress test to your ability to repay. You must be able to meet the repayments at 5x the current rate, not necessarily doable if you are on limited income.
I would always recommend if possible, keeping any finance for business away from your personal assets if you can. Obtaining the money as a business loan rather than personal will help with that.
We also live in NS, its was the NS CBDC I presented to.
Problem with trying to obtain the money as a mortgage or home equity loan is they apply the mortgage stress test to your ability to repay. You must be able to meet the repayments at 5x the current rate, not necessarily doable if you are on limited income.
I would always recommend if possible, keeping any finance for business away from your personal assets if you can. Obtaining the money as a business loan rather than personal will help with that.
+1
Aug 19th 2019, 1:23 am
#27
RETIRED Realtor
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Location: Winnipeg, Manitoba
Posts: 2,087
Re: Borrowing money for the first time in Canada
Its weird though, I know people who their only income is from rentals and they never seem to have a problem borrowing more for another one.
I’m asking for such a small amount against a property that no other bank is invested in, should I default on the loan they get a property that they can easily sell to cover it. It’s a win win for them.
I feel eel like this is just a computer says no situation.
Aug 19th 2019, 4:11 am
#28
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Re: Borrowing money for the first time in Canada
Aug 19th 2019, 6:06 am
#29
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Re: Borrowing money for the first time in Canada
https://canadabusiness.ca/starting/f...-new-business/
https://novascotia.ca/news/release/?id=20081217006
Personally taking out a loan or line of credit against the equity in your home would be a last resort scenario.. it's high risk
http://alpinecredits.ca/how-we-help/...SABEgKiPvD_BwE
Aug 20th 2019, 5:24 pm
#30
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Re: Borrowing money for the first time in Canada
Have you talked to the current iteration of CEED? I think it is Nova Scotia Works or something. Their whole point is to help people get into business.
I would echo what has been said about keeping business and personal separate but it seems to me a HELOC is what you want to investigate if willing to put your home up as security.
I would also get a lawyer involved when it comes to buying into a business. You very much need to see this as a business transaction and there are no friends in business, even if you get on well with the owners.
I would echo what has been said about keeping business and personal separate but it seems to me a HELOC is what you want to investigate if willing to put your home up as security.
I would also get a lawyer involved when it comes to buying into a business. You very much need to see this as a business transaction and there are no friends in business, even if you get on well with the owners.