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Working with the Business Development Bank of Canada Recent tightening of the mortgage lending rules by the Bank of Canada has resulted in the commercial banks getting creative about how best to streamline their lending practices. One such way is to segregate the deserving borrower from the non-deserving borrower. They do this by driving borrowers nuts with their ever increasing demand for information, certification, attestations, appraisals etc. etc. might as well stop what you’re doing and focus on their ever increasing and bizarre information requests. I don’t blame you if you feel a bit giddy about what is actually required. From Notice to Reader (”NTR”) financial statements to cash flow forecasts to a full length business plans - it’s overwhelming, extremely time consuming and expensive. In fairness the rules have always been there to follow. At a recent street level forum held in Calgary the message was overwhelming - Like it or not, it is entrepreneurs that must adapt to the needs of lenders and investors, not the other way around. Glowing growth projections mean little to banks, they have no stake in the company’s growth so their concern focuses on risk. Even company’s looking to borrow money against real estate are in for a surprise. Be prepared for endless requests for information certifications, appraisals, notarized copies of documents. Everything but the kitchen sink. The bottom line is this: Try to grow your business without requiring capital from the banks. Even our trusty Government regulated niche market capital provider, the Business Development Bank of Canada, has its own rules. Here is one such example: The BDC requires that before any lending takes place the financial statements must be signed off by Chartered Accountant. A regular (and cheaper) accountant does not know how to draft NTR’s and comply with the required compilation standards. No, it must be a CA. What a bizarre request - If the Bank new anything they would know that an NTR, whether produced by a CA, a CGA or a CMA or from any accountant is an NTR. There are no special certifications that a CA, CGA or CMA provides that makes the financial statements more believable. Want more than an NTR ask for a review or an audit. I cross checked my facts against the Business Development Bank of Canada Act. The Act does not specify who’s NTR is acceptable and who’s is not. Sounds like a touch of the old bad word “descrimination” to me.   

World Economic Forum The Global Competitiveness Report 2012-2013 South   Africa   voted   number   1   in   strength   of   auditing   and reporting   standards   for   the   3rd   year   running.   Canada gets 6th place (2011 - 4th place). “I’m    particularly    proud    of    South    Africa’s    achievement because    I    am    a    past    student    of    the    South    African accounting   and   auditing   system.   I   think   it   tells   a   story about my business and reporting ethics” See the extract from the report here See the full report here