Representative example: Jae-Sang buys a gas station
Jae-Sang, a resident of BC, wants to own his own business. He sees an opportunity to take over a gas station just off a nearby highway and speaks to the current owner to find out the asking price. The owner agrees to sell him the entire business for $2.3 million. After withdrawing some of his savings and securing funds from a business partner, Jae-Sang finds himself $300,000.00 short of the money he needs.
He applies for a business loan from an online lender, and, thanks to his solid credit score, Jae-Sang is approved. He and the former gas station owner forfeit the collection and remittance of sales tax on the transaction by signing Form GST44, which can be done because both parties are GST/HST registrants. Had they not signed this form, Jae-Sang would’ve had to pay around 12% GST/PST on the fair market value of the business’s taxable assets. In that case, he could’ve treated the GST as tax deductible on his next business tax return.
|Cost of purchasing a gas station||$2,300,000.00|
|Loan type||Business loan (term loan)|
|Interest rate (APR)||8.59%|
|Loan term||7 years|
|Additional fees||Origination fee of 3.00% ($9,000.00)|
Application fee of $0.00 (waived by lender)
|Total loan cost||$400,220.52|
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.