Canada Small Business Financing Program

 

Canada Small Business Financing Program

is a program of the federal government that is available through banks, credit unions. Ask your traditional lender (bank, credit union) about this financing option.

How to Apply?

Banks, credit unions, caisses populaires and other financial
institutions are eligible to make loans under the CSBFP. In order to
obtain a loan, a borrower must present his or her business proposal
directly to a financial institution of his or her choice. Financial
institutions are solely responsible for making the decision to approve a
loan. If the loan is approved, the money the borrower receives is that
of the financial institutions and not the government.

What businesses are eligible to apply under the Canada Small Business Financing Program (CSBFP)?

What businesses are eligible to apply under the Canada Small Business Financing Program (CSBFP)?

Most start-ups and existing for-profit small businesses in Canada with gross revenues of $10 million or less are eligible to apply for loans under this program. Such businesses can be corporations, sole proprietors, partnerships or cooperatives.

Farming businesses are not eligible under this program. The Canadian Agricultural Loans Act program, administered by Agriculture and Agri-Food Canada, is designed to increase the availability of loans for the purpose of farming.

What is eligible for financing under the CSBFP?

What is eligible for financing under the Canada Small Business Financing Program?

Loans can finance the cost of:

  • the purchase or improvement of land or buildings used for commercial purposes;
  • the purchase or improvement of new or used equipment; and
  • the purchase of new or existing leasehold improvements (i.e. renovations to a leased property by a tenant).
  • the registration fee

How much can be financed and what is the maximum loan amount I can access under this program?

How much can be financed and what is the maximum loan amount I can access under this program?

It is up to the borrower and lender to negotiate an appropriate amount of financing. The maximum loan amount a borrower can access under this program is $1 million, of which no more than $350,000 can be used to finance the purchase or improvement of equipment and the purchase of leasehold improvements.

What are the costs associated with a CSBFP loan?

What are the costs associated with a Canada Small Business Financing Program loan?

Registration fee:
The CSBFP registration fee is 2% of the total amount of the loan. The registration fee can be financed as part of the loan.

Interest rate:
The interest rate may be variable or fixed. For a variable rate, the maximum chargeable is the lender’s prime lending rate plus 3%. For a fixed rate, the maximum chargeable is the lenders’  single family residential mortgage rate plus 3%.

Lender fees:
Lenders may charge the same fees (e.g. set-up and renewal fees), that they charge for a conventional loan of the same amount. These fees are paid directly to the lender and cannot be financed under this program.

All  the facts can be found on the Government of Canada website:

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/home

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