The Canada Small Business Financing Program (CSBFP) can help you qualify for up to $1.15 million in business financing. These loans and lines of credit are backed by the Canadian government, so you can get access to funding you might not be able to qualify for on your own. They also come with some of the most competitive interest rates on the market. Find out more about CSBFP financing, and learn how to apply today.
What is the Canadian Small Business Financing Program?
The Canada Small Business Financing Program offers term loans up to $1 million to help you start or expand your business, plus lines of credit up to $150,000. These financing products are backed by a guarantee from the Canadian government, and are typically offered exclusively by banks and credit unions.
With a Canadian Small Business Financing Program loan, you can qualify for either a term loan or a line of credit:
Term loan. Get up to $1 million for term loans. Of this amount, no more than $500,000 can be used for equipment and leasehold improvements loans and no more than $150,000 can be used to cover intangible assets and working capital costs. Learn more below.
Line of credit. Borrow $150,000 for working capital costs on its own, or over and above the $150,000 that can be used for working capital costs under the term loan product. Learn more below.
Quick facts: CSBF program term loans
Features
Details
Max. loan amount
$1 million
Government-backed?
Yes, it’s backed by the Canadian government, up to a maximum of 85%.
Who approves my application?
Financial institutions deliver the program and are solely responsible for approving the loan. The lender disburses funds, and then registers the loan with Innovation, Science and Economic Development Canada (ISED)
Interest rates
Your lender sets the interest rates. Maximums outlined below.
Fixed: The maximum rate is the lender’s prime rate or single family residential mortgage rate for the term of the loan plus 3%.
Floating: The maximum chargeable is the lender’s prime lending rate plus 3%.
Fees
2% registration fee
Allowable uses
Purchase or improve business assets, max $500,000 for equipment, max $150,000 for working capital
Eligible small businesses
Corporations, sole proprietors, partnerships, cooperatives, start-ups or not-for-profits operating anywhere in Canada with a gross annual revenue of $10 million or less
Ineligible small businesses
Farming businesses
How does a CSBF program term loan work?
A Canadian Small Business Financing Program loan lets you borrow up to $1 million for your business, with fewer restrictions than a conventional loan. You can apply as an established company or a startup (as long as you make less than $10 million in annual revenue and have fewer than 500 employees).
The funds you borrow will be backed by the Canadian government (up to 85%), meaning that they’ll repay a large portion of your loan if you default. This makes it much safer for lenders to provide you with a loan, since they are guaranteed the majority of repayment, even if you default.
Registration information
All you need to do is find a lender willing to fund your application, and meet the eligibility criteria. Your lender will agree to your application and loan terms. Once the loan agreement is signed and finalized, your lender is responsible for registering the loan with the Canadian government (through the department of Innovation, Science and Economic Development Canada).
Personal or corporate guarantees
You may be required to sign a personal or corporate guarantee to secure your funds. This will make you responsible for repaying the loan with your assets if you default. Your lender will only be able to collect repayments from the government once they have exhausted efforts to retrieve funds/assets you put up to secure your loan.
Accountability for payments
For CSBF term loans, any money you spend must be supported by proof of purchase such as invoices, purchase agreements and receipts. Your proof of payment documents must be in your company’s name and provide details of the items purchased (e.g., make, model, serial numbers etc.) or the work done in order to be eligible for reimbursement.
What businesses are eligible for a CSBF program term loan?
The Canadian Small Business Financing Program covers small businesses and startups in most sectors. There are only a handful of exclusions to be aware of.
What’s covered? Companies with a gross annual revenue of $10 million or less. These businesses can be corporations, sole proprietors, partnerships, non profits or cooperatives.
What’s not covered? The loan program excludes businesses with an annual revenue exceeding $10 million, as well as farming businesses. Farming businesses can instead access financing under the Canadian Agricultural Loans Act program.
What expenses are eligible for a CSBF program term loan?
You can use Canada Small Business Financing Program term loans to cover the following expenses:
Expenses
Max loan amount
Examples of what might be covered
Buy or improve commercial land or buildings
Up to $1 million of total loan amount
Commercial real estate
Buy or improve new or used equipment or vehicles
Up to $500,000 of total loan amount
A fleet of commercial vehicles
Hotel or restaurant equipment
Computer or telecommunications equipment and software
Update or improve new or existing leaseholds
Up to $500,000 of total loan amount
Renovations to a leased building
Upgrading leased equipment
Intangible assets and working capital costs
Up to $150,000 of total loan amount
Working capital needs such as salaries, rent, and utilities
What expenses are ineligible for a CSBF program term loan?
The following expenses would be ineligible for a CSBF program term loan:
Debt refinancing or consolidation
Investment purposes such as buying stocks or mutual funds
High-risk ventures that are largely speculative
Direct costs of running a farm
How much does a CSBF program term loan cost?
Your lender will set the interest rates for your loan, but they will have to follow certain rules for how much you have to pay:
Fixed rate loan. The maximum rate is the lender’s prime rate or single family residential mortgage rate plus 3%. For example, if the lender’s mortgage rate is 5.79% then the maximum you can pay for a CSBF loan is 8.79% in interest.
Variable rate loan. The maximum you’ll pay is the lender’s prime lending rate plus 3%. For example, if the lender’s prime rate is 6.09% then you can pay a maximum of 9.09%.
Beyond the rates you pay, you’ll also be charged a 2% registration fee on the full amount of your loan. For example, if you borrow $1 million dollars, you’ll pay a $20,000 fee. Registration fees have to be paid by the borrower to the lender, and they can be financed as part of your loan.
You can schedule repayments based on your needs (monthly, blended, seasonal or escalating), though you’ll need to schedule at least one payment of principal and interest each year.
You’ll repay your loan over a maximum term of 15 years, although you may go up to 25 years for commercial real estate. The only caveat if your loan is greater than 15 years is that it will need to be converted to a conventional loan (usually with higher rates) after you reach the 15 year mark.
Calculate the cost of your business loan
Calculate the overall loan cost and interest charged on money you borrow from your CSBF program term loan
Below are the steps to apply for a Canadian Small Business Financing Program term loan:
Determine eligibility. You’ll need to be a Canadian business with $10 million or less in annual revenue. You’ll also need to have less than 500 employees.
Find a participating lender. You can get CSBF loans from banks, credit unions, and other financial institutions that participate in the program. Find a list of participating CSBFP lenders below.
Fill out an application. Once you settle on a lender, you’ll have to fill out an application with information about yourself and your business.This can include your legal business name, address, whether you have partners and what type of business it is.
Submit supporting documentation. Submit any required documents to support the information you’ve provided in your application. This can include financial statements, business plans, registration documents or tax returns. You may also need to submit information about your assets if you’re getting a secured loan.
Submit your application. Submit your application to the lender, who will review your details and determine whether you’re eligible for a CSBF loan.
Compare a CSBFP loan with other business loan options
1 - 3 of 3
Quick facts: CSBF program line of credit
Features
Details
Max. line of credit amount
$150,000
Government-backed?
Yes, it’s backed by the Innovation, Science and Economic Development Canada (ISED)
Who approves my application?
Financial institutions deliver the program and are solely responsible for approving the line of credit. The lender disburses funds, and then registers the LoC with ISED.
Interest rates
For lines of credit, the maximum chargeable is the lender’s prime lending rate plus 5%.
Fees
2% registration fee based on credit limit
Allowable uses
Working capital only
Eligible small businesses
Corporations, sole proprietors, partnerships, cooperatives, not-for-profits or start-ups operating anywhere in Canada with a gross annual revenue of $10 million or less
Ineligible small businesses
Farming businesses
How does a CSBF program line of credit work?
A CSBFP line of credit lets you borrow up to $150,000 for your business, to cover your day-to-day operating expenses. You can apply as an established company or a startup (as long as you make less than $10 million in annual revenue and have fewer than 500 employees).
The funds you borrow will be backed by the Canadian government (up to 15%), meaning that they’ll repay a portion of your line of credit if you default. This makes it safer for lenders to provide you with access to funds, since they are guaranteed a portion of repayment.
Registration information
For a Canada Small Business Financing Program line of credit, you’ll need to fill out an application and if accepted, sign an attestation indicating that the line of credit will only be used to pay for working capital costs. You’ll also need to specify that working capital costs paid through the line of credit were not incurred more than 365 days prior to the date the line of credit was authorized. Your line of credit will be registered with the Canadian government by your lender.
Personal or corporate guarantees
You may be required to sign a personal or corporate guarantee to secure your funds. This will make you responsible for repaying the loan with your assets if you default. Your lender will only be able to collect repayments from the government once they have exhausted any funds/assets you put up to secure your line of credit.
What businesses are eligible for a CSBF program line of credit?
The CSBF program covers small businesses and startups in most sectors. There are only a handful of exclusions to be aware of.
What’s covered? Companies with a gross annual revenue of $10 million or less. These businesses can be corporations, sole proprietors, partnerships, cooperatives or not for profits.
What’s not covered? The loan program excludes businesses with an annual revenue exceeding $10 million, as well as farming businesses. Farming businesses can access financing under the Canadian Agricultural Loans Act program.
What expenses are eligible for a CSBF program line of credit?
Expenses
Max Loan Amount
Examples of what might be covered
Intangible assets and working capital costs
Up to $150,000 of total loan amount
Working capital needs such as salaries, rent and inventory
What expenses are ineligible for a CSBF program line of credit?
You can’t use a Canada Small Business Financing Program line of credit for anything other than working capital expenses. This means you can’t use the funds to purchase, lease or upgrade equipment. You also won’t be able to use funds for any of the exemptions listed under term loans. This includes debt consolidation, investing or financing direct farming expenses.
How much does a CSBF program line of credit cost?
Your lender will set the interest rates for your loan, but they will have to follow certain rules for how much you have to pay:
Maximum interest rate. The maximum interest rate for lines of credit is prime plus 5%
Registration fee. You’ll pay 2% of the amount of your authorized line of credit amount to register your line of credit.
Annual admin fee. You’ll pay an annual admin fee of 1.25% on the daily outstanding amount or the average daily balance each month.
Repayment terms
You’ll repay your line of credit based on how much you take out. The terms of your repayment will be negotiated with your lender. The maximum term for a CSBFP line of credit is 5 years.
How do I apply for a CSBF program line of credit?
Below are the steps to apply for a Canada Small Business Financing Program line of credit:
Determine eligibility. You’ll need to be a Canadian business with $10 million or less in annual revenue. You’ll also need to have less than 500 employees.
Find a participating lender. You can get CSBF lines of credit from banks, credit unions, and other financial institutions that participate in the program. Find a list of participating CSBFP lenders below.
Fill out an application. Once you settle on a lender, you’ll have to fill out an application with information about yourself and your business.This can include your legal business name, address, whether you have partners and what type of business it is.
Submit supporting documentation. Submit any required documents to support the information you’ve provided in your application. This can include financial statements, business plans, registration documents or tax returns. You may also have to provide information to verify assets you’re using for personal or business guarantees.
Submit your application. Submit your application to the lender, who will review your details and determine whether you’re eligible for a CSBF line of credit.
Compare with other business lines of credit
1 - 2 of 2
Where can I get a CSBFP loan or line of credit?
You can get a CSBFP term loan or line of credit from banks and credit unions. It is not possible to get these types of loans from alterative, online lenders. Here is a full list of financial institutions that have partnered with the Canada Small Business Financing Program:
Large bank
Alternative banks
Credit unions
TD Financial
CIBC
BMO
RBC
Scotiabank
Canadian Western Bank
ATB Financial
National Bank of Canada
CTBC Bank
Industrial and Commercial Bank of China
Keb Hana Bank Canada
Laurentian Bank of Canada
Shinhan Bank Canada
Peace Hills Trust
The majority of Canada’s Credit Unions
Caisses populaires Acadiennes
Caisses populaires de l’Ontario
Mouvement des caisses Desjardins
Bottom line
CSBFP loans and lines of credit can help you access government-backed funding for your business. Both types of financing products come with features such as lower than average interest rates, longer terms and more flexible repayment options than traditional loans. You can source CSBFP loans and lines of credit from banks and credit unions. To learn more about business loans and to compare your options, check out our full guide here.
Frequently asked questions about the CSBF program
Yes. Small businesses operated by non-residents are eligible to obtain a Canada Small Business Financing Program loan as long as the borrower's business complies with federal or provincial legislation, the place of business is in Canada and the assets being purchased will be used in Canada.
Yes, it seems you can take advantage of a CSBFP loan and line of credit at the same time. You can also just apply for a term loan and use $150,000 of the amount you borrow for working capital costs. The main difference is that it won't be treated as a revolving line of credit.
It depends on your lender. Different lenders have different requirements and will specify what type of personal or commercial guarantees you may need to qualify for Canada Small Business Financing Program funding. That said, it's not a mandatory requirement for all lenders.
Yes. There are provisions that allow you to transfer your loan if you sell your business, but it's up to the bank to decide if they feel comfortable releasing you and assigning your loan to a new borrower.
Repayment terms are typically based on what the funds are being used for. Most equipment and leasehold purchases come with terms up to 15 years. You may be able to get terms up to 25 years for commercial mortgages, though you'll revert to a conventional loan after 15 years. The maximum term for a line of credit is 5 years.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
Explore the best small business loans in Canada for startups, fast funding, flexibility, bad credit, and more.
Feedback
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
