Canada Small Business Financing Program (CSBFP)

By mmuise
Description:

The Canada Small Business Financing Program makes it easier for small businesses to obtain loans from financial institutions because the government shares the risk with the lenders.


Comments on Funding:

The maximum loan amount a borrower can access under this program is $1.15 million, which includes a maximum of $1 million for term loans and $150,000 for lines of credit. It is up to the borrower and lender to negotiate an appropriate amount of financing.

Interest rates are determined by the applicant's financial institution and may be variable or fixed.
1. Variable: The maximum chargeable is the lender's prime lending rate plus 3%.
2. Fixed: The maximum chargeable is the lender's single family residential mortgage rate for the term of the loan plus 3%.
A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan.

Deadline: -
Eligibility:

Applicants must:

  • be start-ups and existing for-profit, not-for-profit and charitable small businesses operating in Canada, including corporations, sole proprietors, partnerships or cooperatives;.
  • have gross revenues of $10 million or less.
  • Not eligible under this program: farming businesses.
Application Steps:

1. The applicant must discuss his business needs with a financial officer at any bank, caisse populaire, or credit union in Canada that is eligible to make loans under the CSBFP. Check the lenders near you here (Source 2).

2. The financial officer will review your business proposal and make a decision on the loan application. Once the decision is made to offer financing under the program, the financial institution will disburse the funds and register the loan with Innovation, Science and Economic Development Canada.

Documentation Needed:

No specific documentation has been identified. The documentation is the one required by the funding institution (any bank, caisse populaire, or credit union in Canada).

Other Things to Note:

The enhanced features under the Program are now offered by most financial institutions. Please contact a lender near you for more information. Date modified: 2022-10-05

About the author
mmuise