Frequently Asked Questions

• AWE is a business plan lender and we strongly focus on business viability and the business plan provided by the applicant. We are a not-for-profit organization with a mandate is to help women be successful in business so we do a lot more than just lend money. 
• We provide individual business advising.
• We have a maximum loan of $150,000.
• Our minimum security and equity are lower than most lenders. 
• Lower credit scores do not immediately eliminate you.
• We have flexibility in what you use the money for.
• If you get a loan with us you are assigned to a Business Advisor who will work with  
• You for the duration of your loan to guide you along the way.
• We do not charge penalties for early payout
• We do not charge annual renewal fees

What is equity?

• This is money you have or will personally put into your business. We look for a minimum investment by the applicant of 25% of total debt. So, for example, if you were borrowing $100,000 then aWe would look to you to put in $25,000. (If a client is looking for a large loan, i.e. some from another lender as well as aWe, we will try to be flexible on this.)
• The equity may or may not be new money. If the business already exists, you may have invested money years ago. The current value of this equity would be determined by your most recent business balance sheet.
• Money that other people put into the project with no obligation of repayment (gifted money) can also be considered as equity.
• Starting a business using 100% debt financing is not good practice as it puts the business at additional risk. aWe requires that you invest at least 25% of your own money into a project. Many other lenders require much more. If you don’t have money to put into your business you may want to delay your application.

 

What is security?

• Sometimes lenders call security ‘collateral’. This collateral includes tangible assets or “things” that a lender can register an interest in against your loan debt. A residential mortgage is one example: for as long as you own a house with a mortgage, the lender will register a position against that house just in case something happens to you and you can no longer repay the loan which financed the house purchase. In this event they can sell your house and use the proceeds to offset the mortgage debt. Same with a business loan - lenders look for something tangible they can sell to offset the outstanding debt if you can no longer repay on the loan. 
• AWE looks to secure a minimum of 30% of the loan amount (many other lenders look to secure the full amount). For example, if you were to borrow $100,000 aWe will want the security value to be $30,000 at a minimum. In some instances of high risk, additional security may be requested.
• We calculate a net realization value for whatever you offer as security to determine the security percentage value. This will be the expected value of the asset less the realization costs, if the asset must be liquidated.
• AWE is somewhat flexible with security requirements. We can consider different types of tangible assets including vehicles if not more than 5 years old, business equipment, equity in a house or property. On larger loans a house or property may be required while on smaller loans we may consider a vehicle or other personal or business assets. aWe does not accept marketable securities as collateral for its loans.
• What you offer is up to you and you need to feel comfortable with your decision. A business advisor can work more with you on this but it is something you should consider before you apply.

 

What if I have an existing business or if I’m purchasing an existing business?

• If you have an existing business already, we may not need a fully detailed business plan but we will need a written description of the history of your company to date, what is happening in your company now that you need a loan, what your plans for the future are, up to date accountant-prepared financial statements (at minimum the Income Statement and Balance Sheet for last two years plus interim statements) and the sales assumptions and cash flow projections for the next two years.
• If you are purchasing an existing business, we may not need a fully detailed business plan but we will need a written description of the company purpose and its operations, what research you have done to determine that this is a good business opportunity, what your future plans are for the business, up to date accountant-prepared financial statements (at minimum the Income Statement and Balance Sheet) and your own sales assumptions and cash flow projections for the next two years. If you have ideas about driving up revenue, you’ll want to address them in the plan and it would be a good idea to conduct some primary research [surveys of your target market (in your intended location and surrounding area, current customers] to find out if your ideas will produce the desired effect. We also look for a formal business appraisal of the business. How much of the asking price is equipment, inventory, renovations, good will etc. The current accountant can do this.

 

What about shareholders loans, do they count as equity?

• They may, and your business advisor can give you more details on that. AWE will require that repayment of shareholder loans be postponed until its loan is repaid in full.

 

Why is a credit check done?

• The credit report gives us some insight into how much debt is being carried and how well that debt is being managed. 

 

What if my credit history is not very good?

• This would automatically disqualify you with some business lenders, which have a minimum Beacon score. We have more flexibility to take the larger picture into consideration.
• We see all ranges of credit. We don’t automatically exclude anyone unless there is more than one bankruptcy or clear evidence of ongoing poor debt management. If there is an outstanding judgment or lawsuit on your credit report we will ask you to clear that before applying.  

 

How much does a loan from AWE cost?

• Other lenders often charge monthly and/or annual fees on their loans, and generally there are penalties charged for early payout. 
• AWE is a not for profit organization and we only try to offset some of our costs in processing a loan. The application fee you submit when you apply covers the cost of the necessary credit and security checks, and gets you a full review of your business plan plus a decision on the loan. 
• If a loan is approved there is a one-time administration fee of 1% of the loan amount, to a max of $500.00, which covers a portion of the administration costs we incur to establish the documentation and monitor the loan. Beyond that there are no other general administration fees, only minor fees for missed or late payments or security changes that may be requested during the term of the loan.
• Additionally, you have the benefit of paying out your loan or making extra payments at any time without incurring penalty costs.

 

How long does it take to get a loan?

• The length of time to get a loan depends on the quality of the initial information that you supply, how quickly you can respond to our requests for more information or clarification, and the number of loans that are currently being processed. We do not start a loan review until we have a complete application package.
• The timeframe is generally 4-6 weeks from the time we get ALL the information needed (business plan, financial projections, proof of equity, security information, loan application, $100 non-refundable loan application fee and anything else we need).
• Once a loan is approved, time is also needed to produce and process the loan documents before any money can be released.

 

What happens if I get a business loan and then my business closes?

• Any loan is a repayable debt that you would still be expected to repay.