Canada Small Business Financing Program

Canada Small Business Financing Program (CSBF)

The Canada Small Business Financing Program seeks to increase the availability of loans for establishing, expanding, modernizing and improving small businesses. It does this by encouraging financial institutions to make their financing available to small businesses. Under the Program, a small business must apply for a loan at a financial institution (bank, credit union or caisse populaire) of its choice. Application is not made to the Canada Small Business Financing Program Directorate. If the loan is granted by the financial institution, the federal government will reimburse 85 percent of the lender's losses in the event of default.

The Canada Small Business Financing (CSBF) Act was enacted in April 1999 to build on the success of its predecessor, the Small Business Loans Act. The Program's objectives are to streamline loan administration, improve its ability to achieve cost recovery and to extend financing that would otherwise have been unavailable to small-and medium-size enterprises.

While Industry Canada is responsible for the administration of the Program, financial institutions are responsible for all credit decisions and for making the loans.

How and where to apply for a loan

Application for a loan under the Canada Small Business Financing Program may be made at any bank, credit union, caisse populaire and / or any other financial institution. Application is not made to the Canada Small Business Financing Program Directorate.

There are approximately 1 280 lenders with about 14 600 points of service in all provinces and territories. Lenders are responsible for all credit decisions, making the loans, providing loan funds, and registering the loans with Industry Canada. Lenders are also responsible for the administration of loans.

List of Lenders

Eligibility

Eligible Small Business:

• business carried on in Canada;
• its purpose is for gain or profit, and
• for an existing business: the estimated gross annual revenues generated from all the operations within the small business of the borrower must not exceed $5 000 000 for the business' fiscal year during which the CSBF loan is approved, or
• for a new business: the estimated annual gross revenues generated from all the operations within the small business of the borrower must not be expected, at the time the CSBF loan is approved, to exceed $5 000 000 during the first 52 weeks of operation.

Ineligible Small Business:

• "farming" as defined in the 1980 Standard Industrial Classification of Statistics Canada, Major Group 01 — Agricultural Industries;
• charitable or religious organization;
• any business not operating for gain or profit (i.e. private club).

Interest rates on loans

Interest rates on loans may be either floating or fixed. The floating rate cannot be more than 3 percent higher than a lender's prime lending rate. Fixed rates cannot be more than 3 percent higher than the lender's residential mortgage rate for the term of the loan.

What is eligible for financing

CSBF loans can finance up to 90 percent of the cost of:

• the purchase or improvement of real property and immovables;
• the purchase of leasehold improvements, or improvements to leased property; and
• the purchase or improvement of new or used equipment.

The maximum loan amount a small business can access is $250 000.

Forms

• Canada Small Business Financing Program
• Capital Leasing Pilot Program

FAQs

For Lenders
For Small Businesses