Canada Small Business Financing Program

Overview of the Canada Small Business Financing Program program:

The CSBFP is a loan support initiative delivered by the Government of Canada in partnership with financial institutions (banks, credit unions, and caisses populaires). It aims to increase the availability of credit for Canadian small businesses by guaranteeing a portion of loans made by private lenders. This lowers the lender’s risk and enables small businesses—especially startups and those with limited credit history—to qualify for financing they might otherwise be denied. The CSBFP is administered federally but loans are provided directly by approved lenders, not the government. Borrowers must apply directly to a financial institution, and the decision to approve and structure the loan rests with the lender.

Benefits of the Canada Small Business Financing Program program:

• Eligible businesses can use CSBFP-backed loans for:
  • Purchasing or improving land and buildings
  • Buying or upgrading new and used equipment
  • Purchasing leasehold improvements or commercial vehicles
  • Modernizing or expanding facilities
• Funding Amount
• Up to $1.15 million per borrower:
  • $1 million for term loans (maximum of $500,000 for equipment/leaseholds, with up to $150,000 available for intangible assets and working capital through line-of-credit options)
  • Up to $150,000 specifically for intangible assets and working capital via lines of credit
• Terms: up to 15 years depending on the asset type and financing arrangement

Eligibility criteria of the Canada Small Business Financing Program program:

• Eligible Applicants:
• For-profit small businesses with gross annual revenues of $10 million or less
• Includes startups, home-based businesses, and incorporated or sole proprietorships
• Must operate in Canada
• Not available to farming businesses
• Eligible Uses of Funds:
• Real property (purchase, improvement, or renovation)
• Equipment and commercial vehicles
• Leasehold improvements
• Intangible assets (e.g., patents, licenses)
• Working capital (only through authorized line-of-credit lenders)
• Ineligible Uses:
• Inventory
• Payroll or day-to-day operational expenses
• Goodwill
• Franchise fees or business buy-outs