Frequently Asked Questions—For Small Businesses


Am I Eligible?

1. 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 $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.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q1

2. 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
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3. What is not eligible for financing under the CSBFP?

What is not eligible for financing under the Canada Small Business Financing Program?

You cannot use a loan to finance items such as goodwill, working capital, inventories, or franchise fees.

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

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q3
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Loan Criteria

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

4. 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 $500,000, of which no more than $350,000 can be used to finance the purchase or improvement of equipment and the purchase of leasehold improvements.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q4

5. What are the costs associated with a CSBFP loan?

5. 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.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q5
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How to Apply?

6. Where can I apply for a CSBFP loan?

Where can I apply for a Canada Small Business Financing Program loan?

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.

Find a lender near you

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q6

7. Do I need to communicate with Industry Canada for a loan?

Do I need to communicate with Industry Canada for a loan?

No. This program is delivered by financial institutions in partnership with 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.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q7
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Other

8. Why do some financial institutions choose not to participate in this program?

Why do some financial institutions choose not to participate in this program?

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

Find a lender near you

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q8

9. If my financial institution rejects my business proposal and does not approve my application for a loan under this program, what can I do?

If my financial institution rejects my business proposal and does not approve my application for a loan under this program, what can I do?

Decisions to lend are based on lending criteria of each financial institution. You could contact another financial institution since lenders have different criteria related to the approval of business loans. Another option could be to visit canadabusiness.gc.ca to explore other government funding options that might better suit your needs.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q9

10. I have a CSBFP loan and I find that my financial institution is treating me unfairly, who can I contact?

I have a Canada Small Business Financing Program loan and I find that my financial institution is treating me unfairly, who can I contact?

Often your financial institution will want to resolve a complaint promptly and fairly. Some of the options available for complaint resolution are:

  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.
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11. If I cannot access financing under this program, where can I go for additional information?

If I cannot access financing under this program, where can I go for additional information?

For more information on other government programs and services, visit the Canada Business website where you can search for other government grants, loans and financing options. This web site will also provide information on other government services for entrepreneurs related to business start-up, financing, taxes, importing, exporting, etc.

http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02296.html#q11
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