The person you meet at a bank or an Indigenous Financial Institution is rarely the person who approves your facility. They are an advocate. What they carry into committee is a written memo, and that memo is read cold by people whose job is to find the reason to say no.
The reading order
- The ask. Amount, term, structure, security, and use of funds, in one paragraph. If this is vague, everything after it is read with suspicion.
- Repayment capacity. Historical cash flow first, projections second. Projections without a clean history are treated as an opinion.
- Quality of the numbers. Who prepared the statements, how old they are, and whether the balance sheet reconciles to the bank.
- Security and structure. What backs the loan, what ranks ahead of it, and what happens in a downside case.
- Sponsor and governance. Who decides, who signs, and whether the ownership structure creates a delay in enforcement.
Where files actually stall
In our experience the loss is almost never the business model. It is a month-end close that takes six weeks, internal-only statements, a shareholder loan nobody can explain, or an ownership verification that is still in progress. Those are accounting problems wearing a financing costume, and they are fixable in a quarter.
There is a second, structural issue specific to Indigenous-owned businesses. Where the operating company sits inside a band, settlement, or development corporation structure, a lender has to understand how enforcement and guarantees work before it can price risk. Section 89 of the Indian Act restricts the seizure of property situated on reserve, which is a real constraint that lenders and Indigenous Financial Institutions have built workarounds for over decades. It is not a barrier. It is a question you should answer before it is asked.
What to do about it
- Get the close under fifteen days before you approach anyone. It changes the credibility of every number you present.
- Move to compiled or reviewed statements. Internal-only is the most common reason a commercial file gets bumped.
- Write the use of funds in two sentences and make every projection line trace back to it.
- Prepare the ownership and structure explanation as a one-page exhibit, including verification status.
A financing file is not a pitch. It is an argument about repayment, made in evidence.