business get loan by JacobyShaddix



Submitted by: David Alan Eadie 136 Clifton Road Toronto, Ontario M4T 2G6

July, 1998

Table of Contents

Summary Document

Success Stories

Sample Questionnaire

Completed Questionnaires

List of Participants

-1Introduction "We couldn't have done it without the Small Business Loan program," - Byron Newberry, partowner, Jaguar's Sports Bar and Grill, Vancouver, B.C. "I think it is a perfect program and I hope it continues." - Mike Forcillo, president of Cam-Tec Ltd., Laval, Quebec "Without giving people a chance at this kind of credit, you're taking a step back," - Mike Miletic, president, Delta Grinding, Cooksville, Ontario. "When I was just getting started more or less on my own, taking over the business from my parents, maybe the bank wouldn't have given it to me outside the SBLA, I don't know." - Mike Berrigan, president, Guysborough Transfer, Halifax, Nova Scotia "The SBLA has been very helpful to me in business and it sure has helped a lot of other businesses, too. It would be questionable whether I would be in business right now, without the SBLA." - Jim Heath, General Manager, Ure Seal Limited, Tottenham, Ontario These are a sample of the comments made by recipients of government-sponsored loans under the SBLA. It is an accurate representation of the attitudes expressed by successful applicants to the SBLA program that were interviewed between January and May 1998. They ware contacted to help give a personal perspective to the SBLA loan guarantee program. The statistical representation and analysis of the program can be found in "Impact of SBLA Lending: An Evaluation of the Economic Impacts of the SBLA Program" - published in December 1996. These stories present the people behind the statistics.

Methodology The (enclosed) questionnaire was primarily based upon the one used by the 1996 study noted above. It was felt that by using the first questionnaire as a guide, the results from this initiative would be reinforced by theirs. The intended purpose of this communications initiative is to present personal stories about the positive effects the SBLA has had on people`s businesses. These stories are not quantifiable entities and can`t be derived from questionnaires, no matter how comprehensive. They are anecdotal and are drawn out by personal interviews. It was never intended that quantifiable results should obtain from this exercise and therefore, it was felt that the questionnaire should act more as a control than a search for hard information. In any case, the stories that were produced were felt to be the prime objective and that the interview process was the main source of information.

-2How administered and rates of return The rate of return of the questionnaire was partially determined by how it was administered. Some candidates were operating with limited resources of time and weren`t able to answer the questions during the course of the interview. In those cases the questionnaire was sent to them afterwards so that they could complete and return it at their leisure. Predictably, the rate of return for that method was smaller than for those who were asked the questions directly. Another method of administering the questionnaire - sending the questionnaire prior to conducting a prearranged interview - achieved better returns. This was tried, again, because of time constraints and also it was felt that the subjects might feel more comfortable if they were more aware of the nature of the interview to come. It should be noted that great care was taken to assure candidates that their participation would in no way impact on their current relationship with SBLA nor on any future dealings they might have with the program. It was also explained that the reason for the interview was to support efforts to renew and expand the SBLA and, furthermore, that according to the terms of its mandate it may soon cease to be. This possibility aroused concern and, in fact, may have convinced some to participate in this exercise when they might otherwise have begged off. Candidates Candidates for the questionnaire and interview process upon which the stories were based were chosen on the basis of region, by type of business and by availability. Candidates were contacted by interviewers who took care to identify themselves as independent business people, working under contract to Industry Canada. The interview process Very few people refused to become involved. Those that declined to participate did so because they were too busy, although one said that he didn`t want to draw attention to his business success. Even with those cases where the interview was conducted concurrently with the questionnaire, an air of informality was encouraged and candidates, for the most part, freely discussed their businesses and their business lives. Results The one thread that runs through the narratives of all the businesses that were profiled is that they all successfully applied for government loan guarantees. Some needed the financing to get bigger, to stay in business or to start a business in the first place. Some might have found financing elsewhere, some might not. Some common themes are woven through that thread. Quite a number of participants expressed a very dim view of the banks - saying that the banks expected too much collateral, were too hard to please, and offered little in return. For some,

-3banks were only approached after first securing a government-backed loan guarantee. With almost no exceptions most businesses did do better as a result of their loans. Their success was demonstrable. Sales and profits increased. They were able to hire more full and part-time people. In some cases, local production was substituted for imports, both nationally and regionally. Almost unanimously, business people felt their efforts were good for their communities. Judging by the people interviewed it appears that bank personnel are very aware of and keen to promote the use of the SBLA loan guarantee as a component of a financing package for their small business clients. Many candidates expressed marked enthusiasm for the SBLA, a few taking a broad look, saying that small business wouldn`t exist and thrive in Canada if it wasn`t for SBLA involvement. This is quite a different view of government involvement in Canada`s business life than one normally hears from this sector. A sizeable percentage of the subjects interviewed were not at all familiar with the SBLA program even though they had successfully applied for an SBLA loan guarantee. This is, at first blush, very surprising given the fact that, in many cases, their businesses depended upon the funds obtained by virtue of the program. This is explained by the fact that candidates only came to know of the program by way of the loans officer at their bank who also filled out their applications for them and presented the financing package as fait accomplis. Candidates were naturally more concerned with their businesses than in what they obviously felt was one more detail in their financing picture. In a small but significant number of cases candidates didn`t even know that they had applied for a government loan guarantee, let alone that they had actually gotten one. This seems to reinforce the above indication that business people tend to focus on the operational aspects of their businesses. As long as the monthly loan payments seemed manageable, they were not concerned about the source of their funds. Neither were the up-front fees or the slightly higher interest rates an issue with most. Participants indicated that this was just another of the necessary costs of doing business. Again, their monthly loan payment was their primary focus.

-4Conclusions - Recommendations It is apparent from both statistical studies and personal interviews that most business people feel that the program works and works well. Aside from minor discussion about the fee structure, support from among successful applicants was strong and unequivocal. Therefore the following recommendations focus on communication and promotion of the program rather than substantive changes to the program itself. Loans officers and other lending professionals know the SBLA loan guarantee program. In general, unless they have already applied to the program, small business people don`t. They may not have to, provided that it continues to be in the interest of lending institutions to promote the program to its clients. However a strong argument could be made that it would be to the advantage of the SBLA, the small business community, and the community at large, if greater efforts were made to promote the program to the general public and attract a broader pool of potential applicants. It is therefore recommended that the SBLA initiate an active public education campaign. The campaign could include direct advertising, a speakers` program, distribution of communications products to the general public, and the inclusion of information about the program in speeches by Members of the government. In addition, members of the media should be encouraged to cover the proceedings of the committees which will help determine the fate of the program. For an example; it is clear that most business people who received loan guarantees are not only proud of their achievements but, if asked, would likely be willing to share their experiences with others. It is therefore recommended that all loan guarantee recipients be provided with promotional material for distribution to their customers, suppliers and neighboring business as a means of promoting the loan guarantee program. Such material may take the form of printed brochures, videotapes and a supporting Web site which features tailored program information and success stories. If recipients are willing to serve as references for the program, or to speak about the SBLA at business groups, they should be provided with speaking notes and audiovisual support. As well, bank personnel or institutions who do a particularly good job of screening applicants should be identified, recognized and rewarded. Support should be provided so any innovative methods or procedures they use can be duplicated within their organizations. Where approved loans meet national or regional employment and economic development goals, both the borrower and the lending institution should recognized, particularly where creative solutions have been devised. When the loan is paid off, both the recipient and the lending institution manager should receive a communication from the SBLA reinforcing the program`s benefits, and again providing secondary promotional materials.

-5SBLA SAVES FRANCHISE INDUSTRY "It would stop the franchise industry cold in its tracks if they stopped the SBLA program." Howard Muchnick is a co-owner of Bagel Franchise Inc., which operates three different franchise concepts throughout southern Ontario. The company has 13 franchises operating and will open 15 more during the spring and summer. "In my opinion, the banks do not want to lend to food businesses. They know that most people who open restaurants go out of business in the first few years, because it is a very high-risk, high turn-over business," he said. "Without the SBLA guarantee, the banks would totally stop lending money to restaurants and the only people who would have access to financing would already have considerable assets in hand." Each operator who buys a franchise becomes the owner of an independent, separately-owned company. Mr. Muchnick cites Elm Cities Bakeries in Oshawa as an example. It operates a Bakeworks store that got started with an SBLA-guaranteed loan of $195,000. "We advertise in trade shows and newspapers to attract franchisees," Muchnick said, "and for many if not most of them the only reason they would seriously participate is because they know that there are government-backed loan programs available." Muchnick believes the franchising industry, more so than many others, has been founded on the availability of money. "What franchising has done is allow somebody without the relevant skills to get into a business that is fairly sophisticated, " he said, "something that they could not hope to begin to do immediately themselves." Muchnick used his bagel business as an example. "We supply the technology and the technique as well as the frozen product to the franchisees," he said. "It would take someone working on their own 20 years to figure out how to do what we do, but they don't have to. They can just buy the whole concept." He pointed out that SBLA loans make it possible for new immigrants to begin working at a business of their own immediately without putting all their available funds at risk. "If they had to use all the money they have in the world," he said, "they would have nothing left and they would be very unwilling to take a risk. "All you need to do is change this program in any way, shape or form, and you will see the spigots start to shut off. It may not have much of an impact on other businesses, but in food franchising it would have an immediate and very negative impact. This is a wonderful program and it makes terrific sense in a small country like ours, where, if you are realistic, there are difficulties with risk-taking."

-6SBLA - HELPS BANKS TOO Michel Lavoie knows a lot about building. He's spent the better part of the last 16 years building a successful carpentry business, Ebenisterie Lavoie, one that's turned out to be a major employer in St. Louis du Ha! Ha!, in eastern Quebec. Lavoie specializes in kitchen cabinets, but when he was approached last year by a potential client looking for custom made coffins, he saw a chance to expand his business. But there was a hurdle to overcome. He needed an expensive new tool to allow him to carve and the make decorative moldings the client required. So as he had many times before, he turned to his local Caisse Populaire for a loan. And as always, his banker asked him if he would like to sign on to the SBLA program. "Sometimes I think the SBLA is just as advantageous to banks as it is to businesses," says Lavoie. "I mean it doesn't give businesses a deal on rates or anything like that... It just makes loaning less risky for the banks. To me, it's kind of like a double security." He says the program improved his chances at getting the loan, and certainly made the process a lot smoother. The new machine has been delivered from Montreal, and then coffins were in the works. Lavoie started out in 1981 with only one employee. Now he has 15 local carpenters working at his shop, ten of them full-time. The rest come in to help with bigger orders during his busy season. Besides cabinets and coffins, they also create office and home furnishings - all tailored to client's wishes. He's always a welcome sight at local hardware stores. For the past sixteen years he's been buying most of his equipment and wood from local suppliers. Lavoie is from nearby St. Elzear, but he didn't pick St. Louis de Ha! Ha! simply out of a sense of belonging. There were geographic considerations as well. "We are right between Riviere-du-Loup and New Brunswick," he says. "And we get business from both directions." Location, quality, and diversity. That's what Lavoie is building on.

-7FAST SBLA SERVICE FOR HALIFAX FOOD SERVICE BUSINESS Delston Inc. of Halifax, Nova Scotia has been in business for a long time - almost ten years. For most of those years they've also had a relationship with the Small Business Loans Act, with several loans guaranteed under its auspices. Just last year Delston Inc. was granted a loan guarantee of approximately $45,000 for the purchase of kitchen equipment. They operate a successful contract food service management company, working with institutional accounts like the Halifax Regional School Board, Dalhousie University and the Nova Scotia Community College. When Bruce Dalo, Delston's general manager, approached his credit union for the loan, the branch manager offered to arrange the loan under an SBLA guarantee. When Dalo asked "Why SBLA?", his manager replied that the government guarantee made the loan quick and convenient, so for Dalo, "That was it." As for the extra fees? "I chose to ignore them. It all became part of what was financed." The interest rate was competitive but the deciding factor, Dalo said, was simplicity. "It was easy to do. All we needed to provide were the receipts to support the chattel and that was it." Dalo says his company would probably have been able to get financing without the SBLA but, "We would have had to do a little more work to get it. We probably could have done one of two things, we could have borrowed the money in a more traditional way or we could have financed it out of cash flow without too much pain, but it made more sense to borrow." As a businessperson in a competitive sector, Dalo appreciates the convenience of the SBLA but also understands its importance to new businesses as well. "I can certainly see how it could make a huge difference if you were just starting out or running a small business with one or two people." Delston Inc. is a limited company with 300 employees, of whom about 200 work full-time. That's a significant and influential employer in a market like Halifax where so many jobs are seasonal or part-time. There's no question that Delston Inc. is a major contributor to the well-being of the whole community, just as the SBL has been an important factor in its own success.

-8SBLA PART OF FITNESS REGIMEN Knowing a business 'from the ground up' used to be a just a complimentary expression. In Mike Forcillo's case it's more of a job description. He's been in the fitness business for 40 years as an owner and operator of fitness centres, and as a manufacturer of gymnasium equipment. But he doesn't just run the gyms, he also builds them. "We are a family-owned business," he said, "We build and operate the gyms and we also manufacture fitness equipment and sell it to various companies." He is the president of Cam-Tec Ltd. based in Laval, outside Montreal, and operates a fitness club in Montreal and another in Kingston. Forcillo has owned as many as eight fitness clubs at one time, and he is also currently negotiating the purchase of a non-operating fitness club in another prime Montreal location. Talking about the Small Business Loans Program, Forcillo said, "When we started the club in Kingston it was the first time we ever worked with this program. We have used SBL guaranteed bank loans three times for Frontenac Fitness. The most recent one was for $20,000, the first was $27,000, the second was $127,000." The fitness centre in Kingston employs 26 people, and there are about 50 other employees working in the other two companies. "My business is very controlled," he said. "We built the Kingston location ourselves. We do our own construction and we do all our own advertising and management. I guess that is why we are still around; whatever comes in stays in one office." Forcillo is proud of the sound construction and quality materials that go into his fitness facilities. "When you have 400 or 500 people going through a fitness centre in the course of a day, all your areas are high-maintenance. The best way to control costs in operations and upkeep is to build smart up front, and use the right materials," he said. "People want a clean environment and good service. Gyms today require a family atmosphere and facilities for children like day care." For the future, Forcillo is planning more fitness clubs. As well as the 50,000 square foot building he is negotiating for in Montreal, he hopes to expand into the Ontario market. Forcillo is hoping that the Small Business Loans Program will be available to help finance that expansion. "I find that this program really helps the industry. I think it is a perfect program and I hope it continues."

-9IT TOOK A LOAN TO BUILD A DREAM Michel Raymond first laid eyes on his dream while he was on duty as a Bell Quebec technician early last year. He was called out to fix a phone line at a small, homespun resort nestled in Quebec's Laurentian Mountains. The resort had an inn, campgrounds, and the great outdoors for a playground right at its doorstep. And it was within easy driving distance of Montreal. It wasn't long before he brought his wife to spend the weekend. "We fell in love with the place at first sight," says Raymond's wife Aline. It turned out the owners were looking to sell and the Raymonds began to think about buying. The Raymonds are in their 40`s, with two young teenagers and neither had any experience running a resort. They knew it was going to be tough to convince a bank to lend them the money. Then there was the fact the resort had fallen into disrepair under the old ownership and a makeover was definitely in order. On the positive side of the ledger, the travel and tourism trade in Quebec was healthy, and they had a supportive, extended family. Besides, this was a dream they were determined to make happen. "This is going to be our retirement security. This is our future," says Aline. A mortgage on their home plus savings only covered half the cost of the resort and start-up costs and they needed a loan. They went shopping at several institutions, always with the SBLA in mind. They'd heard about the program and were sure they'd need to use it. The results were fast in coming. "Two weeks later," says Aline "we were set up at the resort - now called Domaine Marie-Max. It was ours." Aline says finding financing would have been very difficult without the SBLA, and is happy it was at their disposal. But she does have a major problem with the program. She thinks the payback period is too short. "Ten years isn't enough," she says. "When you're just starting out, you need to have spending flexibility. It was a very tough first year." But they made it. Michel still works at Bell while Aline runs Domaine Marie-Max on a day-to-day basis. It's a year-round, seven days a week job with eighteen hour days and the Raymonds still have a long way to go before Domaine Marie-Max is a stable business. They can't afford to hire any full-time employees, and still depend on their extended family to help run the place. But they're optimistic and as long as the next couple of seasons are good, they know they'll make a future of it.

- 10 FRANCHISING NO PIECE OF CAKE - EVEN WITH SBLA Bob Hughes moved to Victoria from Toronto about eight years ago. Like so many Torontonians, he took advantage of a hot real estate market that allowed him to leave winter behind for good. The only problem for Bob was that he had been working in the aerospace industry - senior forecaster for MacDonnell/Douglas Canada - and there wasn't much in that line on Vancouver Island. So he worked at a couple of other jobs before deciding he could do better on his own in the food franchising business. With the number of franchises you see popping up everywhere, you'd think that they'd be an easy business to get into. After all, by definition you're selling a well-known product. If you've done your research and your chosen area can support your business, it seems reasonable that money lenders would consider it a sure thing and have no trouble financing you. Bob Hughes knows it isn't easy. He and his partner operate a combination Mr. Submarine/Baskin-Robbins franchise in Victoria. They had done their homework and found what appeared to be the perfect location - right across from a high school and just down from a new Zellers store. What could be easier that selling sandwiches and ice cream to teenagers and hungry shoppers? The franchisers agreed. All they had left to do was come up with the financing. "We tried several banks and none of them seemed to know what they were doing," says Mr. Hughes. Still, he understands why the banks may be a bit wary of backing them. "The food industry is renowned for not doing well," he says. "The TD Bank seemed to have the most on the ball," he says, "so we sat down with them and they arranged most of it." Even with the SBLA loan guarantee it was not easy. He's not sure about whether or not it is the case with all franchises, but "You have to get tentative approval from the banks before the franchisers will give you the final 'go','' he says. It can be a frustrating situation, especially considering that he and his partner had to put up their homes as collateral. Perhaps typical of many would-be small business people, Bob Hughes was unaware of the SBLA or how it worked before he actually got a guaranteed loan. His banker told him about the program and worked everything out for him. Even now that he's a successful applicant the mechanics of the arrangement are something he'd rather not worry about. He's got other things on his mind... such as how much vanilla he should order.

- 11 SMALL BUSINESS LOAN - A STAKE IN THE FUTURE Art Grasby has been buying and selling semi-trailers in Saskatoon, Saskatchewan for about 25 years. Most of that time he worked for someone else, but about four years ago the construction industry in Saskatchewan was in a bit of a decline and Mr. Grasby decided to go out on his own. "I figured I might as well go broke working for myself as for somebody else," he jokes. As it turned out Grasby Trailer Sales didn't go broke and as he puts it, "right now business is good". Though he's "dabbled in highway rigs," he mainly sells trailers used in the construction industry - gravel haulers and the like - and he knows that there are always times when the business might not be so strong. It's one of the realities of being in business for oneself. Since he started Grasby Trailer Sales he's received two SBLA-backed loans. The first helped him set up his business and the second allowed him to buy the land where he keeps his stock. Like many applicants to the SBLA he was unaware of the government loan guarantee program until he spoke to his bank. He's very happy that the program exists. He says he might not have gotten financing without it. Buying the land didn't make a great deal of impact on his day-to-day operations, but, as he says, it may help in the future, "at least I'm paying for something which might be worth something down the road instead of just putting money down for rent." Though he doesn't discount the idea of someday expanding, his remains a one-man operation. He laughs that this way he don't have to set an example for anybody, but there is more to it than that. By himself he can keep a firm handle on Grasby Trailer Sales and he remains his own best asset.

- 12 SBLA-BASED CREDIT MEANS STEP AHEAD FOR SMALL BUSINESS When Mike Miletic came to Canada from Serbia in 1985, he delivered pizzas and worked for an uncle in construction. Miletic had been a machinist in Yugoslavia and wanted to return to his trade. So ten years ago he bought his first machine and started Delta Grinding in Cooksville, Ontario. His first major machining contracts, for Husky Injection Molding in Bolton, lasted seven years before Miletic's competitors found a way to supply the work cheaper. But the work he'd done for Husky helped to pay for his house, the building where he operates Delta Grinding, and the equipment he used up until last year. That was when he took out an SBLA-guaranteed loan of $197,000 towards the full purchase price of $305,000 for two computer numerically-controlled grinding machines. "I used to have all manual machines, but you have to follow technology, otherwise you are going to close the door. You have to buy as much technology as your wallet can handle," Mr. Militec said, I bought two machines and I know I can handle the financing." He says that the sales generated by his new machines now bring in about 80 per cent of his present income. His bank manager suggested the Small Business Loans program. "I went to the bank and asked for money," he said, "and the manager told me they could offer the guaranteed loan up to $250,000." Without the loan, Militec said, he could have found other forms of financing, but he prefers to keep his business affairs consolidated with one bank branch. Does he consider the SBLA a positive program? "Definitely. It is easy and convenient. It was approved within a few days," he said. "My opinion of the SBLA is this, you are going to lose some and you are going to win some, but you are going to win more than you lose because you are helping small businesses. Without giving people a chance at this kind of credit, you're taking a step back," he said. "Business seems to be very good right now," Miletic said. He is concentrating on machining for the molding industry, and is doing a great deal of work for a large company in Guelph, an automotive parts supplier whose orders have outrun their current capacity. "They cannot handle any more in-house," Miletic said, "and they just brought 20,000 pieces to my shop." Without the outside capacity of shops like Delta Grinding, he said, larger places would lose production flexibility. "If they shut down the line, they are going to lose their contracts with the big auto-makers, so they need small business like me to kept them going. I am running all over the place now."

- 13 Miletic believes things will be good in the automotive parts business for the next two years, because Ford, General Motors and Chrysler all have big plans and big sales ambitions for the 2000 model year. "The auto industry is pushing everything," he says. Today, he works with his brother and wife in a 5,600 square foot building and hopes to bring his 17-year old son into the computing side of the increasingly automated business. Miletic said, "Now, it is easier, after ten years. I was working Saturdays and Sundays, sometimes 20 hours straight. For the first seven years, I never had a vacation." But that doesn't mean things are easy now. Interviewed at the end of April, he had been working until 3:00 AM and getting up at 7:00 in the morning for the last three days, coping with a new contract.

- 14 SPEED AN ASSET FOR GUYSBOROUGH TRANSFER Mike Berrigan of Halifax, Nova Scotia has been working at Guysborough Transfer, the family business, since he got out of high school. Guysborough Transfer is a general freight company, specializing in transporting containers from the port of Halifax for large clients like Oceanex Transportation. His trucks range as far as 250 miles, with St. John, New Brunswick typically being the farthest destination. As a freight carrier, Guysborough Transfer does not need a large yard of his own, so Berrigan leases space large enough to park his four trucks and chassis. He received his first SBLA-guaranteed loan in 1986 when he bought the business from his father. His bank manager at the time made him aware of the program and offered to arrange the loan with an SBLA guarantee. Since then, he has taken out about half a dozen SBLA-guaranteed loans, the most recent for $100,000 to buy a used tractor and two container chassis. He appreciates the fast, convenient access to the substantial sums of money he requires for capital purchases. "It's never been more than two or three days before I receive an answer. They have been very good. I suppose the bank puts them through pretty fast because they can't lose." Today, he believes that the bank would approve his loan applications outside the SBLA program, but things looked different back in 1986. "When I was just getting started more or less on my own, taking over the business from my parents, maybe the bank wouldn't have given it to me outside the SBLA, I don't know." Berrigan considers the upfront fees attached to the SBLA-guaranteed loan a reasonable price to pay for the convenience and availability of the loan. With the new equipment he added in November, Berrigan says annual sales are now running at about $600,000 compared with about $300,000 in the previous year. "We're very busy right now," he said, and as soon as his year-end financial statements are prepared, he believes he will be looking for another SBLA loan to purchase another truck. "I would probably look for about a $150,000 loan and that would probably put sales up by about $150,000 a year," he said. Today, Guysborough Transfer has four employees and four trucks. Berrigan wants to grow the company with the addition of several more tractors so he can devote himself to management full-time. Right now he still drives 40 or 50 hours a week and puts in another 20 hours at the office. He's 44 now and after 25 years on the road he's looking forward to hanging up his 'spurs'.

- 15 FEES NOT AN ISSUE AT THE HAWG`S BREATH SALOON On a recent Friday morning in early spring, Laura Hawkins Doerr was writing up the lunch menu at the Hawg`s Breath Saloon in Kincardine, Ontario. "I made soup last night," she said, "Boston clam chowder and chicken soup with white and wild rice." The specials that day, she decided, would be corned beef and a seafood melt. Doerr describes her business as, "A trendy little spot, sort of like an Irish pub. I have been told by customers that they have never seen anything like it. We came in here, renovated the whole place and created a whole atmosphere with a lot of character." After opening her business, the need for a more effective cooling system quickly became obvious, so Doerr got in touch with her banker. "We have a great relationship with our bankers. I just phoned him up and said, 'We need an air conditioner, what can you do?'" Approval for a $5,200 loan came through quickly. Did she ask her manager to arrange an SBLA-guaranteed loan? "No, the bank manager would have looked after that." When she looked at the paperwork, did she get curious about the Small Business Loan program? "No. 'How much as month am I going to be paying?' That was my only question." The fact that her SBLA-guaranteed loan was a little more expensive was not an issue. "I knew we could have it paid off within the next year, so that wasn't a concern. We needed the air conditioner. It had to go in," she said. "We were a new business, and we didn't know how things would go over the next few months, so that was a lot of money to put out at once. We thought a small business loan would be the route to take." Doerr provides about 30 hours a week of work for each of her three employees, and she knows her restaurant makes a real contribution to the life of her community. "There was a need to be filled," she said, and that also happens to be pretty much the way she thinks about the Small Business Loans programed.

- 16 EXPERIENCE COUNTS WITH THE SBLA "We couldn't have done it without the Small Business Loan program," said Byron Newberry. He's the part-owner of Jaguar's Sports Bar and Grill in Vancouver and has definite views on the subject of small business loans. "The banks won't do that much for a new business going into the bar business," he said. "They don't like the entertainment industry and even though my partner and I both have an extensive background in it, they wouldn't have put up the amount we needed without the Small Business Loan guarantee." Jaguar's is more like an entertainment complex with a 260-seat pub, a 120-seat restaurant and a 60-seat pool side patio. It also features a full, completely open kitchen. Located in the Quality Inn Executive Suites, Jaguar's also provides all the food and beverage for the brand-new, 133-bed hotel. As well, they offer a full range of services which include catering, conference room support and room service. Quality Inn is itself a franchise operation, so Newberry is an independent owner, providing a comprehensive service to another independent owner. Is it becoming more common for hospitality companies to import a service rather than provide it? "You bet," said Newberry. He came to the food and beverage industry from a background in commercial real estate. "I am a realtor, and I do marketing studies all the time. I also have a background in food and restaurant operations so I recognized this opportunity when I saw it," he said. Nevertheless it took him a year to put it together. "I started this January 1996 and I opened in December." A big part of the project involved arranging the finances. The entire package included $680,000 from the Honk Kong Bank with the SBLA-guaranteed $250,000, plus a significant cash component completed the total investment of $1.1 million. Even though he has a background in hospitality management, Jaguar's is a much bigger enterprise than any he has managed in the past, an opportunity that the SBLA made possible. "We have 25 employees, half full-time and half part-time," he said. "I am happy, more or less, with the way the business is going, but it could be better. We're starting to hit the break-even point." "With my background in commercial real estate, I have structured deals for clients using SBLA-guaranteed loans many times." This time, Newberry tapped the program for a venture of his own.

- 17 SBLA HELPS ADULT COMMUNITY BUILD FOR A LIFETIME Karwood Estates of Paradise, Newfoundland, is an adult housing development business about eight miles west of St. John's. The company's housing units are designed to anticipate the changes in a person's mobility and access requirements and meet them in advance. As its residents grow older their homes won't have to change with them. This anticipation of its residents' changing needs won a Canada Mortgage and Housing Corporation FlexHousing Design Competition for its innovative, adaptable housing designs. The family-owned company is very proud of that. A ten-year project, Karwood Estates is in the first phase now, and sold its first home about two years ago. Company president Hubert Hussey said, "The first phase entails about 45 building lots, and they are partially sold right now. Last year, we sold nine, which represents about a million dollars worth of turnover. Twenty or so sales a year would make us a big business." Hussey's bank manager introduced him to the small business loan program. Karwood Estate's most recent SBLA-guaranteed loan was relatively small, under $10,000, to assist with the purchase of a pickup truck, but Hussey has also had a much larger SBLA-backed loan which he used for the purchase of furniture and appliances for another development which he has since sold. Besides building the housing units, Karwood Estates is planning a 60-bed personal care home for seniors. "It would be a 60-bed, level 1 and level 2 care facility," Hussey said, "meaning it would not require nurses on staff. The facility will look after people who might need some help with bathing and food preparation and so on, but don't need on-site medical attention." In the next two years Hussey wants to start bringing personal services to people who need it in their own homes. "It is all interrelated," he said, "with the health care facility allowing the same ease of access as the housing. It is a combination of health care and housing that we are putting into the development." What would a visitor to the Karwood site see? "You would see a lovely country setting with all the city services, in a partial stage of development," Hussey said, "with various types of housing, some attached, some not attached. You would see different areas located around a natural pond. We put a stream in last year for fish breeding, and we can walk in the woods two minutes away from any of our housing units and pick berries." Karwood Estates has seven employees and provides full-time work for as many as 50 subcontractors at any given time. "We will certainly be looking at Small Business loans for some bigger things we want to do here, if the program is still available," Hussey said.

- 18 MERGER MADE POSSIBLE WITH SBLA When Francois Lafaille and his partners looked at their numbers last year, they decided they had to get bigger if they were really going to get anywhere. "We needed to merge, " Lafaille says, "We needed to cut costs, and expand." Their company, Lafaille Insurance, was humming along at a moderately successful pace in west-end Montreal. But it wasn't growing. Client lists had become stagnant. Lafaille decided it was time to take a second look at the market. Lafaille heads up a group of what he calls "general" insurers, providing basic insurance for individuals and businesses. He found that nearby R. Landreville Insurance was doing much the same thing - in the same vicinity. They even shared a couple of clients. Lafaille started thinking about a merger but he wasn't sure if Landreville would agree. Lafaille soon found out the Landreville partners also shared many of his concerns, and were facing some major changes in its upper management. The timing for a merger was perfect. It was time to talk money, but Lafaille needed more than just acquisition capital. He needed to cover merging costs, like new office equipment and additional office space. So he turned to Boreal Insurance for a loan. Boreal suggested they ask for partial backing from the SBLA program, and Lafaille said why not. It didn't take long before they had the money. The two companies completed their merger earlier this year, and Assurances Lafaille, Migneron Inc. now do business out of a larger Notre Dame Street office. Lafaille admits he doesn't know much about the SBLA, because Boreal Insurance did most of the dealings with the program. But he liked how fast the program moved, something he says is essential in the world of business. "Without the loan, there is now way we could have bought up Landreville." he says. And all in all, it actually improved their relationship with Boreal. "I think they felt more secure about the move, knowing we had that backing." So far, profits at the new, bigger company are up about two percent. But Lafaille expects they will grow at a faster rate with time. Unfortunately, three employees will have to be let go - with the merger, there was a bit of overlapping in some of the lower level jobs. But Lafaille says that all and all, they've turned two moderate performing businesses into one with some real potential.

- 19 SBLA HELPS AD AGENCY TO GROW AND SUCCEED When Brian Larter graduated from Humber College in 1975 he was looking for a career in communications. He wasn't expecting it to become a lifelong love affair, but after 23 years that's what it's become. After he finished school he tried a stint doing news and sports on-air with major Toronto radio stations and one year training in Winnipeg with the CHUM group. At that point he decided that what he really wanted to do was operate a recording studio producing music and commercials. "I opened a place across from Yonge and Bloor. The original name was the Commercial Factory, and then became a company called Airwaves." When his field of activity became more extensive, the company blossomed into a full-service advertising agency and assumed the name, Larter Creative. Now based in Aurora, Ontario, Larter Creative is a well-established communications company, specializing in advertising and marketing. "Here we are today, still working in the audio and radio production field, but we have also added a video editing suite that can double as another recording studio, a photo studio and a full art department." Larter has about a dozen full-time people and about half a dozen freelancers who are in and out all the time. Larter Creative has used the Small Business Loan program twice. "The first loan was used to test the waters in video production," Larter said, "and we built a video edit suite down on our lower level. It is a small, efficient digital studio." A second SBLA loan bought more equipment and allowed Larter Creative to expand the services that it offers. "In my opinion," Larter said, "in two more years we will be back to the loan program as we get into the next level of expansion." There may not be a typical Larter Creative customer, but most would fit this description, Larter said. "You are a medium to large corporation that needs to market or advertise itself internally or externally. It could be a training video for your employees, it could be a sales incentive program, it could be a national advertising program or it could be a radio program." Larter says every project Larter undertakes is managed using this checklist: objective-goal-strategy-execution-measurement. "Those five points must be in everything we present, because it keeps us on target and reduces risk, and it means the maximum return for the client." In recent years, those clients have included Reebok in the United States and Canada, Rockport Shoes and Harley-Davidson, which has been Larter Creative's longest account.

- 20 For the future, Brian Larter said, he wants to grow his company into six main divisions. "To do that we are going to need capital, so I am certainly looking to continue the partnership with the SBLA."

- 21 SBLA HELPS SET FOUNDATION FOR CONCRETE BUSINESS At first glance, being a concrete specialist might seem a curious career choice. But when you consider how much of the globe is covered by concrete and the fact that it all needs upkeep and improvement, the decision to specialize starts to make a lot of sense. The people at Services d'Expertise en Materiaux (S.E.M.) know a lot about concrete. In fact this young group of engineers are considered leading experts of the stuff. General manager Elizabeth Reid says they are the only consultants in the high technology of concrete in Canada. They serve an international clientele of mainly big industrial companies, drawing business from across the country, the United States and Europe. Reid joined S.E.M. in 1994 right out of university, just as the company was looking to expand. She and three associates - all professors and researchers in engineering at Laval University in Quebec - were in an enviable position. Demand for their advice was growing. But they needed a fully-staffed, full-time office to put their expertise on a business-like footing. They needed a loan for computers, equipment, and furnishing. The company had been dealing with the Caisse Populaire at Laval University for about six months at the time and it was the manager who told them about the SBLA. "The manager of the Caisse Populaire took care of everything, the paperwork and all," says Reid. "All I had to do was show up to sign my name... It was so fast." The Caisse released part of the loan right away and they were able to purchase their equipment almost immediately - all of it from Quebec City retailers and distributors. Without the SBLA, Reid says she knows getting a loan would have been much more of a hassle, and would have been much more time consuming. With the loan in hand she had the time to find engineers. S.E.M. hired six more full-time employees, mostly fellow engineering graduates fresh from Laval University. Today, profits have doubled, and more and more clients are knocking at S.E.M.'s doors. All concrete, it seems, is not made equal and their clients' needs can vary greatly. It is their expertise in matching different types of concrete to specific conditions and uses that has made S.E.M. a leader in their field. Elizabeth Reid says they've not only created jobs and increased trade, they've changed the concrete business in Canada. In effect, S.E.M. has started a new arm of the industry and with each new building start or bridge repair their sense of accomplishment can't help but grow.

- 22 SBLA BUYS NEW STONE SLINGER Len Burns is into stone slingers. His company, Material Placements Ltd., which he operates from his home in Fergus, Ontario, has a number of the and they 'sling' stone all across southern Ontario. It's an innovative service that he provides to building contractors and more contractors are learning about them and using Len's service all the time. But what are they? "They're machines mounted on a truck chassis that throw stone into new foundations," he said. "When builders excavate for a new house, they pour the footing and we go in and fill the inside of the footing with stone. Then the builders put the forms in and put the walls up. They lay the weeping tile, and we go back in and cover the weeping tile with stone." The slingers are doing away with the conventional way of using dump trucks, wheelbarrows or five-gallon pails and the labourers who move the stone. "In effect, our trucks look like a giant sander, but we have got a variable-speed 19-foot belt on the back and we can throw stone 35 feet from the back of our trucks." If there is no plumbing, once the stone-slinger has filled the footing and the wall has been put up, then builders can simply go ahead and lay the basement floors. "This is a big saving in time," said Burns. In half an hour, one of Burns' truck-mounted flingers can do the work for a thousand square foot basement that would take three labourers all day, shoveling and moving stone with wheel-barrows. "Also, when they form up the wall, they aren't working in the mud if it rains," Burns said, "they are in a clean environment." Burns bought his latest stone slinger with help from an SBLA-guaranteed loan of $176,000. "[The final amount] was over what the bank could lend me, so I went with the government loan," he said. "I hadn't sold the truck I was replacing yet, so I was caught with the new machine I had on order." He could have borrowed the money privately, but when his banker made him aware of the SBLA, he chose that option. Burns charges $50 or $60 a load more than a dump-truck, and he said it sometimes takes a lot to convince new builders that they can save a lot of money using the Materials Placement service. "Getting new clients is tough because until this year there haven't been lot of new builders in the market to deal with, but the housing boom is lifting demand right now." "We work from Kitchener-Waterloo as far east as Newmarket, and we go from near Niagara up to Owen Sound," he said.

- 23 "I need a lot of foundations in a day to keep the equipment working. My break even is 200 tonnes a day, and that is what I have to average throughout the course of the year. At this time of the year, I have to be running 400 tonnes a day, because in the winter I only see 100 or 120." Burns has four vehicles and three people working now, plus one employee doing his books and another driving a spray-truck to various locations so slinger operators can concentrate on operating their equipment. He knows his efforts are making a positive and innovative contribution to the construction industry in southern Ontario. His business is growing. If you're in the building trade it might not be long before there's a stone slinger in your future.

- 24 BRANCHING OUT WITH SBLA Sutherland Excavating of Millerton, New Brunswick has been in business since 1990, but the company does a lot more than dig holes. "It is kind of misleading in a way, when you say Sutherland Excavating," General manager Blake Sutherland said, "because we have branched out into so much more." In fact, most of Sutherland Excavating's business now involves environmental clean-up; removing and replacing old and rusting underground gasoline tanks and cleaning up toxic spills on land and water. They also do residential landscaping site work and build logging roads for pulp and paper companies. In 1997, Sutherland took out an SBLA-backed loan of just over $100,000 to buy new equipment. Since then, sales have risen from about $250,000 to around $1 million. "We went to the bank and asked for a loan and the manager suggested we put it under the SBLA. It was quite convenient, using the SBLA. The banks are a lot more eager to lend you the money under that program," he said. Over the years Sutherland Excavating has had three different SBLA-backed loans. "We don't have a problem now with credit, because we are growing," Sutherland said, "but when we started out the SBLA was a big help. Eight years ago they literally almost didn't want to talk to me because I guess I didn't even know what a balance sheet was. They would lend to me without an SBLA guarantee but they are an awful lot quicker with it now, that's for sure." Sutherland says the loan has allowed the company to increase its payroll as well as its sales. "Without it, we would probably still be in business but we probably wouldn't be employing the same number of people. The employees that we have are getting top wages for the area for this type of work, and they are getting steady work all year, so it has meant a lot." As well, Sutherland said, "We provide services that are valuable to the area, like oil-spill response. We maintain specialized equipment and we do year-round training so that if a tanker truck overturns, for example, we know how to respond." Sutherland Excavating has also acquired several boats and specialized equipment for marine oil spills. "There are a couple of marine bulk plants here and we have year-round contracts to provide oil-spill response and oil-spill training, so we are on retainer." They've been expanding and diversifying so much over the past few years that they've considered changing the name of the company but so far they've resisted. "Sutherland Excavating is well known," says Blake Sutherland. It seems that for any business reputation and familiarity count for a lot.

- 25 SBLA - FILLING A NEED WHERE OTHERS CAN'T The employment picture was pretty bleak in Quebec when Paul Tessier got out of College in 1992. Still, he didn't want to move out of the province or even out of Drummondville to look for work. So, like many other Canadians, he decided to look to himself for a job. Paul Tessier was about to become an entrepreneur. He decided the first thing to do was look for a demand in his community that he could supply. "I did a survey of local businesses, to see what kind of services that no one else was offering," Tessier says. In just a few days, he found that Drummondville business owners were having trouble finding a company to produce business documents. They wanted a service that could do everything from designing reports, to colour photocopying. Paul Tessier knew that he was the man for the job. But Tessier needed space for his business, the high-tech equipment that would give him a competitive advantage, but mostly he needed start-up capital. He first turned to the Quebec government's programs which provide loans and bursaries for high-tech businesses. "But my idea didn't quite fit their bill," he says. Tessier found out about SBLA from the manager of his local Caisse Populaire where he went for a business loan. Still in his 20's, and only just out of school, he figured on being labeled a risk. But with the SBLA, he had his loan in two days. Tessier says he couldn't believe it. "I still think I could have come up with the money without the SBLA, but it certainly made it easier. It gave me a sense of legitimacy, I guess." He's turned to the SBLA six times over the last six years as his small business slowly grew. When he started, he was a one-man operation. Now he employs five people - two full time and three part time and after three years, he hit an important goal - $200,000 in revenues. Remembering his own post-college experience, he hired two of his employees fresh out of school. Mr. Tessier also knows the importance of community. All the company's computers, printers and photocopiers, were bought from local distributors. He feels proud that Tessier Documentation has made an impact. "It's a small business, but I think it's helped the economy roll along, in its own way."

- 26 SBLA - EXPANDING CANADIAN AUTO PARTS SUPPLIERS Pat Vaffino had been working as a machinist at Omega Tool in Windsor, Ontario for 12 years when he thought, "'My employer could be my customer', so I took a chance." It was a chance worth taking. Three years later and thanks in part to a $200,000 SBLA loan guarantee, he has 12 full-time employees in a brand-new lease-to-own building. The 35-year old Vaffino owns Tool-Tec Welding. His company works on molds and dies for the tool and mold industry and supports the many business that supply the Big Three auto-makers with parts. "If there are any engineering changes or machining errors on the tools that dedicated tool-making companies produce, we take care of all the welding for them," he said. So what qualifies Pat Vaffino to own and operate a welding business? "A lot of nerve," he laughed, and then, speaking seriously, he said "I had a dozen years of experience with the top tool company in Windsor, and then I got in to the welding aspect of the business, so I think my background helped me get the business off the ground.". The SBLA-guaranteed loan of $200,000 was part of a three-loan, $400,000 package that allowed him to invest in a new boring mill. "The bank suggested the program and my accountant agreed with it," Vaffino said. "The bank said it had no control over the higher interest rate, but let's face it, new businesses will pay more, no matter what the financing." Today, Vaffino believes he has built his business to a position where he can ask for, and get better interest rates. And the SBLA program? "I really believe it is a good thing.," he said. "Without the loan, I would not have been able to expand my business," he said. Some might find it ironic that his profits would be higher without the expansion of his business, but that doesn't faze Vaffino. "If I had stayed where I was," said Vaffino, "I would have made major profit, but who is to say someone else wouldn't have stepped in and done what I did?" Vaffino says his investment has proved to the industry that he is a serious player with no intention of standing still. "So, sure, my profits aren't as good as what they used to be," he admitted, "but I also have a lot more equity and in time, probably within the next year, things will come back. Sales are a lot higher, it is just that I have a lot more overhead." He hired five people when he expanded his business, and so far, he has been surpassing his business plan. Vaffino says he has had a very positive impact on the local tool and mold industry because there was only one other company in the market, and now there is a second Canadian-based alternative to sourcing the work in the United States. "Now the market has a choice besides going to the States and buying US dollars and the hassles of transport and paper work," he said. "Since I have started a lot of my customers tell me that I have changed the business."

- 27 SBLA HELPING TOURISM INDUSTRY ON PRINCE EDWARD ISLAND Four years ago Donald McKearney owned a successful vacuum cleaner and janitorial supplies business. Even though the business was doing well he felt it was time to try something new. His wife knew he was looking for a change but had no idea he would come home and announce the purchase of not one but two motels on the same day. Today, is in his fourth year of owning and operating Cavendish Country Inns on Prince Edward Island, McKearney can look back and smile. "Let's just say she almost had a heart attack the first time I came home and told her what I was doing," he said. "But she is behind it and she works with me." About the purchase he says, "Everything just fell together. The price was right, everything fell into line and the next thing I knew, within a day, I owned two businesses. There were two motels side by side, and I combined them into one." McKearney believes he has the best location on P.E.I. "I am looking out my window at the ocean," he said when interviewed. "The only thing in front of me is a national park, which is leased back to a farmer, and I have a perfect view of the ocean. Cavendish Beach is nearby." McKearney and his wife had to work fast and quickly to get their new properties into shape. "We upgraded drastically. We built a brand new office, a laundromat, we built new cottages and upgraded some of the old ones." The Cavendish Country Inns involvement with the SBLA dates back to McKearney's purchase of his business, when the programed guaranteed several loans he needed for necessary improvements. In all, he has had four loans under the SBLA programed. The most recent loan in 1997 was for $100,000 and he used it to build four new cottages. Today McKearny has 31 units. What is his opinion of the SBLA programed? "I think it's great. It's great for the banks because their money is guaranteed." He is planning another expansion within the next year or two which is going to have a big impact in the community. "I've bought a third property for a convention centre and we are looking to go into conferences for corporate customers," McKearney said. A successful conference and convention business would help to expand the ten-week tourist season and would boost the community's employment profile. "It is going to create at least ten more jobs," he said. That's a significant number in an area with a winter population of about 200.

- 28 UP-FRONT FEES A PART OF DOING BUSINESS Pierre Desrochers knows that his new company, Fort McMurray Truss Manufacturing, is in the right place at the right time. With strong oil prices and low production costs, Fort McMurray's Syncrude plant is bringing lots of money into the community, and nobody else in the northern Alberta town is manufacturing trusses. "In fact, the last manufacturer shut down about 15 years ago," he said. "People have a lot of money here so they are building custom homes," Desrochers said. "Unlike many similar companies, we manufacture wood roof trusses for general contractors who are working with unique plans, in many cases." Desrochers designed his plant to accommodate the efficient manufacture of those specialized designs as well as standard trusses. Desrochers, a building technologist, is 29 years old, and a graduate of British Columbia Institute of Technology in Burnaby, B.C.. He said the technical employees on his payroll not only need the right skills, but they must have considerable experience. He has ten employees right now and expects business to hold steady for at least the next year. Desrochers has been in business one year and has used the SBLA guarantee program twice. His bank manager brought the SBL program to his attention, presenting it as Desrocher's best choice, and he agreed. His first loan, for about $30,000 was used to purchase basic truss-building equipment like a roller press, saws and clamps. The SBLA program was an appropriate part of the mix with the other sources of financing that Desrochers arranged to set up his business. "Because the SBLA guarantee was for equipment," he said, "it worked well for starting out." He had a very positive reaction to the terms and conditions of the SBLA-guaranteed loan. He found the up-front fee acceptable, with the understanding that it is the price of the loan, and he was happy with how quickly the funds became available. Without the loan he would have had to go to alternative financing and perhaps even been forced to bring in a partner, which he was quite happy he did not have to do. His business success has had a positive effect on the community because he is offering a new and needed service. He has created employment locally and diversified the economy. "We are building something here instead of importing products from elsewhere," he said, "and we use a lot of local lumber from a Fort McMurray sawmill." In fact, said Desrochers, once he is in a better position financially, then shipping products from Fort McMurray to other towns and cities is a business direction he would definitely want to pursue.

- 29 A GOOD REPUTATION COUNTS WITH SBLA It's the rare business that has been in operation for any length of time and not had some lean periods. You don't have to tell Jim Heath that; he's lived it. Mr Heath is General Manager of Ure Seal Limited of Tottenham, Ontario and about four years ago it was touch-and-go if this family-owned partnership would survive. Ure Seal prepares and applies urethane and epoxy floor coatings for major commercial and industrial customers. They work as authorized contractors/representatives for three or four major firms and had built up a solid business in the Tottenham area and beyond. It's a complex business with demanding customers. Heath says there is no such a thing as a 'typical' job for Ure Seal. "Every job we do is based on a set of specifications that are required for that particular job," he said. "A lot might look the same but the majority have special little idiosyncrasies. We work in crazy situations to meet customers' requirements. We work every weekend. We don't get weekends off in our business, except for Christmas." After better than twenty-five years of successful operation in this highly demanding field, Ure Seal had run into a bad streak. At its worst point the business was liquidated and as a result it had outstanding debt to one bank secured by all its equipment. Fortunately, Ure Seal had assets other than just equipment - they had a good reputation with its customers and their orders were sufficient to qualify for an SBLA-backed restructuring loan. "It would be questionable whether I would be in business right now, without the SBLA." says Mr. Heath. "In effect," Heath said, "we bought back all of our equipment and started all over again. Everybody got paid off, that was the nice thing about it." It is a successful turn-around. "We have had an exceptional year so far," Heath reports, "The first quarter is the highest we have seen for years. As a result, we have added some part-time employees and now have ten full-time employees and about 15 part-time workers. We restructured to the point where we have put ourselves in a much more profitable position." Ure Seal's loans are well-secured by assets. "The bank is comfortable with the loan and that is why the loan was granted. The pay-off is very fast, four years and it is paid off. Of course you have to do the business to cover it," Heath said. It might be overstating the case to say that Mr. Heath is grateful, but he will say that "the SBLA has been very helpful to me in business and it sure has helped a lot of other businesses, too."

- 30 SBLA HELPS FULL-TIME Until late last year James Green was the full-time operator of a janitorial services company in Winnipeg, Manitoba. In addition, he also serviced a few vending machines as a sideline. Through his contacts in the vending business he learned that a number of businesses who had machines on their premises weren't satisfied with the service they were getting from other companies. The bigger vending operations have employees to service the machines and Green believes they don't have the same vested interest in the high level of customer service that Green knew he could provide. He convinced enough clients he could do better and last year he decided to start J&R Vending and go into the vending machine business full-time. Of course, he needed financing to get set up in the business, but he didn't even try to approach a bank. "Sometimes it seems like you have to put everything, your entire life on the line before a bank will lend you money," he said. But understanding that banks are sometimes reluctant to take a chance on a new business doesn't mean that he was happy about it. Fortunately Green's brother had received SBLA-backed loans in the past and encouraged him to apply. He even helped with the paperwork and with SBLA loan guarantee in hand Green's bank was only too happy to lend him the money. The higher interest rate he paid wasn't an issue. James Green runs what might be called a full-service vending operation. He installs the machines, bought with the money secured by the SBLA loan, supplies the products that go in them, and makes daily calls to keep the machines filled and takes the money. His customers don't have any trouble getting their needs attended to. "When they see me servicing the machines they know they can talk directly to the boss." It's pretty much a one-man operation right now and he's not sure that he wants to get too much bigger. He enjoys getting out to meet his customers face to face and figures that if he were to grow too much bigger he's have to hire people to do the work for him. That would put him in the same position as his competitors... the same ones he's won business from by his dedication to personal service.

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QUESTIONNAIRE THE SBLA AND BORROWERS - CONTEXT AND IMPACT Borrower ID: _________ Transit # _________ Lender Loan # _______ Borrower Telephone Number (___) ___ - ____ Good morning/afternoon sir/madam. My name is _____________. I'm calling on behalf of Industry Canada. May I speak with __________? IF NOT AVAILABLE Replacement Contact ___________ Call Back # 1 _________________ Call Back # 2 _________________ Call Back # 3 _________________ According to our records your firm obtained a loan guarantee under the terms of the Small Business Loans Act. Later this year the government is proposing amendments to extend the Act and to increase the money available to assist small businesses. We are calling people who have obtained a loan guarantee under the SBLA to get a better idea about how the SBLA programme works from the borrower's perspective as well as to develop a picture of the effects that it has on businesses, people and the community in which they live. Your participation is completely voluntary. Any information you care to give will be stored inn Personal Information Bank JC PPU014 and is protected under the provisions of the Privacy Act. You can, if you wish remain anonymous. However, if you choose to provide your name and other particulars, there is a possibility that you may be asked to appear before committee hearings.

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Questions. 1. First, would you confirm that you received an SBLA Loan Guarantee in 19__? YES NO What was the state of your business at the time you applied to the SBLA? Was it a new business? YES NO Why did you think that it would be a successful business? If not new, how long had you been in business? What kind of business is it? Agriculture, fishing or farming? Mining? Construction? Manufacturing? Transportation/Public utilities? Wholesale? Retail? Finance? Personal Services? Business Services? Health, Education Services? Other? How was your business structured? Self owned? A partnership? Limited Company? Why did you need a loan? 3.



Why did you contact the SBLA programme? Had you tried to get financing from other sources? YES NO If not, why not? If so, what happened? Which other sources did you approach? Could you not get enough from other sources? YES NO Was there a problem getting the loan in time? YES NO Was the SBLA guarantee a part of a financing package? YES NO

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If the SBLA had not been available, would you have been able to raise the same financing? YES NO Did you have a working relationship with the lender before you got the SBLA loan guarantee? YES NO When you got the SBLA loan guarantee did your relationship with the lender improve? YES NO 4. Describe your experience in applying to the SBLA programme. Was the attitude of the programme personnel positive? YES NO Was it negative? YES NO Were the requirements more stringent than other lenders? YES NO Less stringent? YES NO How long did it take to secure approval? What would have happened if you hadn't been able to get a loan? If you had not been able to get a loan would your profit be... LOWER by ___ SAME HIGHER by____ Sales would be... LOWER by ___ SAME HIGHER by ____ Number of employees.. LOWER by ___ SAME HIGHER by ____ Would your firm be in business at all? YES NO What is the state of your business now? Sales LOWER by ___ SAME HIGHER by___ Number of employees LOWER by ___ SAME HIGHER by ____ Part-time employees? YES NO Full-time employees? YES NO At the time you hired them how many were employed? Did the loan allow you to meet the estimates you stated in your loan application? YES NO Has your business success affected your community? YES NO How?... Other new businesses? YES NO Better employment picture? YES NO Is the business community stronger? YES NO Is your community a better place? YES NO




Sutherland Excavating Ltd., 5224, Route 108, Millerton, New Brunswick (506) 622-5437 Karwood Estates Inc., 200 Hussey Drive, St Johns, Nfld. (709) 782-7777 Guysborough Transfer Ltd., Box 8341, Stn. A, Halifax, Nova Scotia (902) 468-1773 Delston Inc., 155 Ochterloney St., Dartmouth, Nova Scotia (902) 466-0150 Cavendish Country Inns Box 762, Cornwall Prince Edward Island (902) 963-2181 Domaine Marie-Max 1110 Chemin Saindon, Labelle, Quebec (819) 686-1323 Service d'Expertise en Materiaux 1400 Boul. de Parc Technologique Quebec City, Quebec (418) 656-1003 Ebenisterie Lavoie 70 Route 185, St. Louis du Ha Ha, Quebec (418) 854-3468

- 35 Tessier Documentation 1 Rue Guevremant Drummondville, Quebec (819) 478-1734 Les Assurances Lafaille, Migneron, Inc., 4000 rue Notre Dame Ouest Montreal, Quebec (514) 933-9332 Materials Placement Ltd., Fergus, Ontario (519) 837-7355 Hawg's Breath Saloon, 894-896 Queen St., Kincardine, Ontario (519) 396-6565 Tool-Tec Welding 5150 Henin St., Oldcastle, Ontario (519) 737-9978 Frontenac Fitness Plus Ltd., 300 Bath Rd., Kingston, Ontario (613) 547-3337 Ure Seal Ltd., RR#2, Tottenham, Ontario (905) 936-3433 Larter Associates 15243 Yonge St., Aurora, Ontario (905) 727-6978 Elm City Bakeries 8241 Keele St., Concord, Ontario (905) 761-5266

- 36 Delta Grinding Co. Ltd., 1295 Matheson Blvd. East, Mississauga, Ontario (905) 602-6326 R&J Vending, 714 Union Ave., Winnipeg, Manitoba (204) 668-8392 Grasby Trailer Sales Art Grasby P.O. Box 290, RR#4 Saskatoon, Sask. (306) 382-7994 McMurray Truss Manufacturing Ltd., 234 Sifton Ave., Fort McMurray, Alberta (403) 791-6955 Mogul Ventures Corp., 3484 Kingsway, Vancouver, B.C. (604) 434-5247 Sandridge Enterprises Ltd., 8114 Flannagan Place, Victoria, B. C. (250) 474-3226

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