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Episode 13 // Five Crucial C's to Bedazzle Commercial Lenders

Championed by our friends at Community Futures Sunrise


Covid cornered many Founders into a cash-crunch, forcing them to take on more debt merely to survive. In fact, as many as 70% of Canadian small businesses had borrowed roughly $135 billion (aggregate value) by February 2020, according to the Canadian Federation of Independent Business.

Now, as the entrepreneurial ecosystem looks to stabilize itself, Founders may be looking to lenders to help start, stabilize or grow their business.

If you’ve been pondering the idea of accessing debt capital (aka a loan) but don’t know where to start, or how to get to 'yes', NTN Pro, Shannon Pestun, former banker turned Founder and CEO of Pestun Consulting, walks us through the need-to-know essentials in this episode of #TheGabLab.

Part 1 // Debt Financing: Balance Sheet, Meet Leverage


Debt financing is the process of entering into a contractual agreement with a Lender (usually banks or developmental lenders like Community Futures).


A sum of money (loan) is lent with the agreement that the principal amount will be repaid over a specific time frame. In most cases, interest and/or finance charges must also be paid in addition to the principal payments.


As Shannon explains, Lenders expect Founders to be able to articulate what the loan will be used for. Ideally, it’s to finance growth rather than repaying existing debt, FYI. Keep in mind, adding debt (any form of debt, including Covid emergency funds) to your balance sheet, especially when cash flow is tight, can skew your ratios and decrease the value of your business.

Did you know debt financing can be less expensive than equity investment? Brain boggled? Tune into learn more.

Tune in to Part 1, as Shannon breaks down the details of debt including how it may affect your balance sheet, your bottom line and your future fundraising efforts.



Part 2 // How to Bedazzle the Bankers [and other debt lenders]


Hint: It’s not by walking through their doors unprepared. In addition to the basics, like a business plan and cashflow projection, there are five critical points you’ll want to get a handle on before you open a Lender’s door.


Shannon’s lays it on the line in Part 2! Point-blank, she clarifies the meaning and relevance behind each of the five C’s, and the weight they bring to bear on your application.

The Five C's // Character, Capacity, Capital, Collateral, and Conditions.

While you may strive to shine in all five, Shannon explains falling short in a specific area is not the end of the word. Tune in as Shannon sheds light on how Founders and Lenders can work together to address any areas of vulnerability and mitigate any foreseen risks, for both the Founder and the Lender.


Part 3 // Ratios That Count


Ratios give Lenders a better understanding into your business's current and long term financial standing.


Liquidity and leverage ratios are two they tend to calculate right off the top as they are likely to reflect both your short and long term financial health respectively.

While knowing your ratios can help you speak the Lender’s language, they will also pay attention to some non-numeric, qualitative factors like your business plan and your team’s productivity.

Crunching the numbers = calculating the ratios.

But hey, if we lost you at ratios, don’t fret, in Part 3 Shannon gives us the low-down on all we need to know, and better yet, the banker’s perspective on what they hope to see. She also helps to clarify how development Lenders, such as Community Futures, may look past the ratios to help a Founder find their financial footing.


// Download the free tools and templates

The Playbook // Cashflow Forecast // Startup Capital Requirements



About the Pro //Shannon Pestun

Founder, CEO Pestun Consulting


Shannon Pestun is the Founder & CEO of Pestun Consulting Inc., a purpose-driven, Indigenous-owned consulting company that focuses on closing the entrepreneurial gender gap.


Specializing in women's entrepreneurship, gender finance and financial inclusion, Shannon works in collaboration with all levels of government, industry, civil society and education to identify

existing barriers and create systems that promote the enhancement of women's economic empowerment through entrepreneurship.

As a consultant, Shannon has worked with organizations including: ATB Financial, The Women's Entrepreneurship Knowledge Hub, The Canadian Film Centre, and Economic Development Lethbridge.



About the Champ // Community Futures Sunrise


Community Futures (CF) Sunrise provides loans, advice and support to entrepreneurs and businesses in southeast Saskatchewan. With a mission to support the development of business in the region, CF Sunrise strives to offer innovative and customized financing and training options that

encourage business growth.

The board and staff are committed to helping entrepreneurs access the capital and training needed to create and grow successful businesses. Get in touch with CF Sunrise today. They’re here to help!

CF Sunrise is part of a network of 267 Community Futures offices across Canada. They have a rich history of helping businesses succeed. Community Futures - a Canadian Success Story

Connect //

GAB LAB CHAMP // Community Futures Sunrise CFSask.ca/Sunrise // sunrise.cfdc@sasktel.net NTN PRO // Shannon Pestun shannon.pestun@gmail.com // thefinancecafe.ca

GAB LAB HOST // Taunya Woods Richardson taunya@nailthenumbers.com // 1.855.610.1710


Have an idea for a Gab Lab episode? Looking for help with a specific topic?

Hit us up at helpdesk@nailthenumbers.com


#NailedIt #GabLab #Founders #Entrepreneurs #SmallBusiness #Finance #Profit #Entrepreneurship #DebtFinancing #Leverage #Liquidity #Ratios #Loans #Application #BusinessFinancing #InterestCoverageRatio #Capital #Startup #StartupCapital #SmallBusinessLoans

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