Exclusive Interview of Sarmen Abkar

Exclusive Interview

Sarmen Abkar | Consultant & CEO Atlass Consulting LTD.

Atlass Consulting is a Canada based mortgage consulting agency and brokerage firm that deals in financing, residential mortgages, commercial mortgages and bank loans.

MBE: Please tell us a bit about your background in commercial financing, business line of credit and equipment finance?

Sarmen: My background is more on business loans, business line of credit and equipment finance. I have been doing Commercial Financing since 1998. I started in the jewelry manufacturing business, when business went down a Jewish guy came to me and said why don’t you go to Seneca college and get a consulting and mortgage license. I did that and got those licenses. For 2 years I worked on residential then I moved on to financial consultation for start-up businesses, business line of credits and equipment finance.

MBE: What is one common mistake that people make when applying for abusiness loan?

Sarmen: Most people in my experience when you go to the bank today, when you ask for a business loan or business line of credit or equipment finance the bank asks you if you own a house. And they say we can give you a loan against your house. That’s the worst thing to do. You should never put your personal things as collateral against a business loan. When you have a business, borrow against the business. Two years ago in New York I partnered with a bank that finances business people with poor credit with high interest rates, I did a few deals with them. Last year I partnered with Lending Loop, a Canadian Company that finances businesses even if they have poor credit, although with high interest rates. I always advise my clients not to get business loans against your house or other personal property

MBE: How much liability is there on commercial financing of 1%?

Sarmen: If you get a business line of credit you’re responsible for 100%. But when you get a government loan you areresponsible for only 25% personally. If you get a $100,000 government business loan and things go bad you have to pay $25,000 and you’re clean.

MBE: What about RBC or BDC?

Sarmen: BDC does not have that facility. Only chartered banks have that facility because government is the co-signer for25%.

MBE: What is your suggestion for new and aspiring small business owners to avoid bankruptcy and financial trouble?

Sarmen: The problem with most clients is that they mix their business with their personal assets and liabilities. Their personal visa is paid for from the business, their mortgage is paid from the business account. So they are mixing their business and personal accounts. A lot of businesses close down due to this. If I’m working for my company, my company should be separate from my personal finances. I ask my clients to sit down and calculate how much money they need a month to live and maybe the answer is $4000, so you have to tell your accountant to write a check as income from the company for that amount every month. Normally everything is being paid for from the business account and they don’t know how to manage their business and that is why they close down. Sometimes they use their personal money to open abusiness and end up borrowing more and more. That’s why they are closing down.

MBE: So what are some suggestions you will give to people opening up a new business and looking for a business loan?

Sarmen: Don’t borrow against the house, don’t use your personal line of credit and your personal credit card for business expenses. A lot of people today don’t think before they open a business. They just think, this business is good, I’m going to invest into it. I tell them I know it’s good but I know a lot of people that have closed down and I tell them you are going to close down too because they think it’s good and they jump right into it without proper planning. They rented a huge place they cannot afford. I had a client get a place for $8000 rent; he wanted to open a restaurant; he wanted to go big. I said you should start small, no matter the kind of business you are going into, see if you can afford it, what is your budget, that is the way you have to control it. You can’t just go and get a big place and think you can make it. I started this business from my car, a Grandam model 1999. You start small, you look out and see how you can expand, you go step by step, that’s the main reason for businesses to close down so frequently today, lack of proper planning. People use their personal money, plus people have bad accountants, the bankers don’t give them sincere advice about what to do, but the first thing is hiring a good accountant.

MBE: We have seen certain industries taken out of the financing schemes offered by the banks. For example, BDC no longerfinances gas stations or restaurants. So what should consumers be aware of when they are buying a business?

Sarmen: For the restaurants it’s tough today but it was very easy back in the day. They used to finance restaurants up to 90%. If you own a restaurant today the best bank to work with is RBC, they go up to 67% and sometimes they do leasehold improvements too. Because so many restaurants are opening up, restaurants are tough these days to get financing on. BDC came up with a program few years ago where you can get a loan online from BDC and last year they had a lot of frauds due to the online banking program. Because anybody can apply for a loan under my name, and they call that person and he can say I’m Sarmen and they don’t even know and the loans are approved. That is why BDC today is not giving a lot of new businesses the loans. That’s why BDC is getting tougher today.

MBE: Thank you so much Sarmen for your time and for shedding light on the various aspects of commercial financing. Thisinterview will definitely be very helpful & informative for the readers, it was a pleasure talking to you today.

Contact Today For A Free Consultation: Sarmen Abkar – ATLASS CONSULTING LTD

Email: sarmenabkar@atlasfinancial.ca

Phone: 647-294-9096