Frequently Asked Questions — For Small Businesses

Banks, credit unions, caisses populaires and other financial institutions are eligible to make loans under the Canada Small Business Financing Program. 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.

Find a lender near you

No. This program is delivered by financial institutions on behalf of the federal government. Financial institutions are required to apply the same care and procedures in making a CSBFP loan as they would for conventional loans of similar amounts. Decisions related to approving loans rest entirely with the financial institutions.

The Small Business Financing Directorate at Industry Canada is available to provide you with information related to the program. However, Industry Canada does not get involved in the decision making process of financial institutions nor does it accept or process loan applications.

The majority of financial institutions participate in this program. The decision to lend under the program is up to the individual financial institution.

Find a lender near you

Most existing for-profit small and medium size businesses or start-ups in Canada with gross revenues or projected revenues of $5 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.

Loans can finance the cost of:

• the purchase or improvement of real property and immovables
• the purchase of new or existing leasehold improvements; and
• the purchase or improvement of new or used equipment

You cannot use a loan to finance items such as:

• goodwill;
• working capital;
• inventories;
• franchise fees;
• research and development.

This list is not exhaustive. When in doubt, speak with your financial institution.

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

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%.

Often your financial institution will want to resolve a complaint promptly and fairly. You should:

1. Talk with your financial officer or the person you originally dealt with at your financial institution and explain the problem.
2. Make a complaint to the next level (i.e. branch, district or regional manager) of dispute resolution with the firm.
3. Contact the Ombudsman for Banking Services and Investments.