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The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.
Over the past 10 years, small businesses have received over 53,000 CSBFP loans totalling $10 billion dollars.
Learn more about the program.
The nitty-gritty
Small businesses or start-ups operating in Canada with gross annual revenues of $10 million or less.
Not eligible under this program: farming businesses (for a similar program for the farming industry, visit the Canadian Agricultural Loans Act Program).
The maximum loan amount for a borrower is $1.15 million. Up to a maximum of $1,000,000 for term loans for any one borrower, of which no more than $500,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment and of that amount, a maximum of $150,000 could be used for intangible assets and working capital costs. Up to a maximum of $150,000 for lines of credit.
Term 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, i.e., renovations to a leased property by a tenant
- intangible assets and working capital costs For example, you can use a term loan to finance:
- commercial vehicles
- hotel or restaurant equipment
- computer or telecommunications equipment and software
- production equipment
- costs to buy a franchise
Lines of credit can be used to pay for working capital costs, that is, day-to-day operating expenses of the business.
INTEREST RATES
For term loans, the interest rates are determined by your financial institution and may be floating or fixed.
- Floating: The maximum chargeable is the lender’s prime lending rate plus 3%.
- Fixed: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.
For lines of credit, the maximum chargeable is the lender’s prime lending rate plus 5%.
REGISTRATION FEE
For term loans, the 2% registration fee is based on the total amount loaned under the program.
For lines of credit, the 2% registration fee is based on the total amount authorized.
Registration fees must be paid by the borrower to the lender and they may be financed.