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.<\/p>
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.<\/p>
With a Canadian Small Business Financing Program loan, you can qualify for either a term loan or a line of credit:<\/p>
| Features<\/th> | Details<\/th><\/tr><\/thead> | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Max. loan amount<\/td> | $1 million<\/td><\/tr> | |||||||||||||||
| Government-backed?<\/td> | Yes, it\u2019s backed by the Canadian government, up to a maximum of 85%.<\/td><\/tr> | |||||||||||||||
| Who approves my application?<\/td> | 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)<\/td><\/tr> | |||||||||||||||
| Interest rates<\/td> | Your lender sets the interest rates. Maximums outlined below. Fixed: The maximum rate is the lender\u2019s prime rate or single family residential mortgage rate for the term of the loan plus 3%.<\/p> Floating: The maximum chargeable is the lender\u2019s prime lending rate plus 3%.<\/p><\/td><\/tr> | |||||||||||||||
| Fees<\/td> | 2% registration fee<\/td><\/tr> | |||||||||||||||
| Allowable uses<\/td> | Purchase or improve business assets, max $500,000 for equipment, max $150,000 for working capital<\/td><\/tr> | |||||||||||||||
| Eligible small businesses<\/td> | 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<\/td><\/tr> | |||||||||||||||
| Ineligible small businesses<\/td> | Farming businesses<\/td><\/tr><\/tbody><\/table>How does a CSBF program term loan work?<\/h3>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).<\/p> The funds you borrow will be backed by the Canadian government (up to 85%), meaning that they\u2019ll 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.<\/p> Registration information<\/h4>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).<\/p> Personal or corporate guarantees<\/h4>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.<\/p> Accountability for payments<\/h4>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\u2019s 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.<\/p> What businesses are eligible for a CSBF program term loan?<\/h3>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.<\/p>
|