The Canada Small Business Financing Program is a loan loss-sharing program between the federal government and private sector lenders that facilitates access to affordable asset-based financing to small and medium-sized businesses.
The Canada Small Business Financing Program is a loan loss-sharing program between the federal government and private sector lenders that facilitates access to affordable asset-based financing to small and medium-sized businesses. The program provides access to loan financing of up to $1 million for the establishment, expansion and improvement of small businesses.
This federal government program is delivered in all provinces and territories through a network of financial institutions including chartered banks, credit unions and caisses populaires.
- to help new businesses get started and established firms make improvements and expand
- to improve access to loans that would not otherwise be available to small businesses
- to stimulate economic growth and create jobs for Canadians
Small businesses or start-ups operating for profit in Canada, with gross annual revenues of $10 million or less.
Not eligible under this program: not-for-profit organizations, charitable and religious organizations and farming businesses (Agriculture and Agri-Food Canada has a similar program for the farming industry – for information, visit www.agr.gc.ca)
Up to a maximum of $1 million for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.
Purpose of Loans
Loans can be used to finance the following costs:
- purchase or improvement of land or buildings used for commercial purposes
- purchase or improvement of new or used equipment
- purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant
Does CSBF exclude any loan purposes?
The following list is not exhaustive. Loan proceeds cannot be used to finance:
- working capital
- franchise fees
- research and development
The interest rate is determined by the financial institution and may be variable or fixed.
- Variable rate: the maximum chargeable is the lender’s prime lending rate plus three percent.
- Fixed rate: the maximum chargeable is the lender’s single family residential mortgage rate plus three percent.
A registration fee of two percent of the total amount loaned under the program must also be paid by the borrower. It can be financed as part of the loan. Lenders fees may apply and cannot be financed as part of the loan.
The registration fee and a portion of the interest are submitted to Industry Canada by the lender to help offset the costs of the program.
Lenders are required to take security in the assets financed. Lenders also have the option to take an additional unsecured personal guarantee.
How to Apply
Financial institutions deliver the program and are solely responsible for making the decision to approve a loan. For more information, please contact any bank, caisse populaire or credit union.
Canada Small Business Financing Program
235 Queen St.
Ottawa, Ontario K1A 0H5
Toll free: 1-866-959-1699