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How do small Canadian businesses benefit from an interest-free loan in a time of high interest rates?

Interest rates have inflated along with everything else lately – which is why it can be a huge advantage to small businesses to get an interest-free loan. 

Making improvements to business equipment, customer engagement and data management tech, and streamlining internal processes can all be done with the CDAP Boost Your Business Technology grant and subsequent interest-free loan. 

And with 0% interest, you’re not at risk of putting yourself into debt in the future to access the loans today. 

All you need to determine is whether you qualify for the CDAP program, and start the process of getting a digital adoption plan so that you can move forward with a roadmap to digital success.

Read on to learn: 

  1. The cost of inflation for Canadian businesses 
  2. The challenges of high interest rates for Canadian small businesses 
  3. The advantages of an interest-free loan for Canadian small businesses 
  4. Get your digital plan started 

The cost of inflation for Canadian businesses 

Canadian small- and medium-sized enterprises (SMEs) face challenges at both ends of the business pipeline during times of inflation and high interest rates. 

It’s the same across the country: the costs to operate a business are increasing, and yet customer spending is decreasing. 

Charging more to keep your business afloat means alienating valuable customers who may be unwilling, or unable, to meet the increased costs of purchasing your service or product. 

SMEs in retail and the service sectors depend on customer demand, and the ripple effects of high interest rates and inflation can take a toll on the continued survival of such businesses. 

Many Canadian SMEs are looking at interim ways to maintain a competitive advantage without going out of business, including: 

  • Reducing business hours of operation 
  • Eliminating staff positions or decreasing staff hours 
  • Slowing down production to decrease costs 
  • Turning to digital rather than brick-and-mortar sales operations 
  • Taking out loans to afford business costs 

While each of these may help to temporarily manage difficult financial times, each comes with consequences.

Let’s talk about the challenges SMEs face when they access loans to manage business costs.

The challenges of high interest rates for Canadian small businesses 

Small businesses often rely on loans or credit to fund operations, expand their businesses, or invest in new equipment and digital capabilities. 

Yet, interest rates are as inflated as anything else these days – and that means that the money SMEs might access today can have a serious impact on their ability to maintain their business in the future.

If SMEs aren’t keeping up in the market while relying on high-interest loans to stay afloat, they risk not being able to pay down their interest as it accumulates. 

Don’t forget – inflation means decreased spending in the consumer world, too. 

Increased interest rates PLUS decreased consumer spending can equal big trouble for businesses at the end of the fiscal year. 

Loans are often used by SMEs to cover the costs of: 

  • New operational or internal equipment 
  • Investments of updated technology to stay competitive in digital markets 
  • Employee training to stay on top of changing trends and tech 

When businesses can’t afford the costs of interest rates, they miss out on opportunities to access much-needed loans that enable them to stay relevant and competitive in ever-changing consumer markets. 

What options do SMEs have when high interest rates are holding them back from making necessary improvements to business processes? 

We’ll tell you. 

The advantages of an interest-free loan for Canadian small businesses 

The good news is that the Canada Digital Adoption Program is available – and there is NO interest on the grant of up to $100,000 available for the businesses that qualify. 

The benefits of an interest-free loan speak for themselves, but we’re going to list them anyways. 

  • Increased Opportunities. Having access to loans that don’t come with high interest rates means that business owners can afford to make investments that will help them stay competitive long-term. 
  • Improved Confidence. Knowing that accessing a loan won’t put you in future debt means that business owners can make decisions without doubt or anxiety.
  • Growth Opportunities. SMEs can invest in expansion and growth initiatives like upgrading equipment and technology, training new staff, hiring staff, or entering new markets, without the burden of interest payments. 
  • Consumer Engagement. Having the funds necessary to upgrade tech to enter into new digital markets means that SMEs can open doors to new consumer audiences that will help businesses grow. 

The Boost Your Business Technology program was designed to help small- and medium-sized businesses in Canada access the funds they need without hitting a wall of interest costs. 

The added bonus of the CDAP interest-free loan is that eligible businesses have six years to repay the loan, and the first year is completely payment-free.

SMEs can take the time they need to get their finances in order and save up extra funds before the first loan repayment instalment is due.

Taking advantage of the interest-free loan with CDAP means that SMEs can invest in innovation, expand operations, and seize new opportunities to grow in a digital market without being set back by high interest rates. 

Keep reading to find out how to get started.

Get your digital plan started

It makes business sense to take advantage of the opportunities CDAP presents. 

You can learn more about the CDAP Boost Your Business Technology grant with the Program Guide provided by the Government of Canada. 

In a nutshell, here’s what you can expect the next steps to look like: 

  • Find out if you qualify for the grant of up to $15,000
  • This grant allows you to purchase a digital adoption plan prepared specifically for your business. 
  • Once your digital adoption plan is complete, you can submit it to access the interest-free loan of up to $100,000. 
  • When you have the funds, you can put it toward making business investments based on your personalised digital adoption plan.

If you’re ready to get started, we’re ready to help! 

Book your appointment with a CDAP-approved digital advisor

Ready to book, or want to ask more specific questions that you can’t find in our blogs?

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What to read next

Find out what other SMEs are doing with their interest-free loans for inspiration.

Find out why you have to work with a CDAP-approved digital advisor.

Find out about the recent change to CDAP which allows a delegate to apply on your behalf.