Information for Business Support Organisations
The presentation below has been developed for business support organizations who deal directly with small and medium-size businesses and who are interested in learning more about the program parameters. For more information, please contact us at 1-866-959-1699.
- The CSBF Program
- Eligibility and Other Criteria
- Interest, Fees and Security
- How to Apply
- How the Program Operates
- Program Activity
- What's in it for Small Businesses?
- How to Reach Us
The CSBF Program
- Makes it easier for small businesses to obtain loans from financial institutions as the risk is shared between Industry Canada and the lenders.
- Operates in all provinces and territories through a network of lenders including:
- Chartered Banks
- Credit Unions, Caisses populaires
- Helps create jobs.
Eligibility and Other Criteria
- Start-ups and existing businesses operating for profit with gross annual revenues of $5 million or less
- Borrower can be sole proprietor, partnership, corporation or cooperative
- Non-eligible businesses:
- Religious/charitable organizations
- Not-for-profit organizations
- Financing limited to 90% of the cost of the eligible assets:
- Real Property (land, building)
- Leasehold Improvements
- Equipment (trucks, computers,etc.)
- Maximum amount of the loan:
- $500,000 of which no more than $350,000 can be used for leasehold improvements and equipment.
- Ineligible items include:
- Working capital, inventory, advertising, goodwill, franchise fees, labour and research and development.
Interest, Fees and Security
- Maximum Interest Rate:
- Variable rate: Prime lending rate + 3%
- Fixed rate: Single family residential mortgage rate + 3%
- Includes 1.25% annual administration fee (remitted to Industry Canada)
- 2% registration fee paid by the borrower (can be financed)
- A primary security on assets financed is mandatory
- Personal guarantees or suretyships are optional and limited to 25% of the loan amount
How to Apply
- Small businesses can apply by presenting their business plan directly to their bank, credit union or caisse populaire.
- Lenders are responsible for all credit decisions, day to day oversight of the loan administration and disbursement of funds. Industry Canada does not get involved.
- Find a lender near you through the Find a loan for your small business hyperlink.
How the Program Operates
Role of Industry Canada:
- Design the program and legislation
- Ensure awareness of the program
- Register loans and collect registration and administration fees
- Review and pay lender's claims for losses on defaulted loans
- Ensure compliance
Role of Lenders:
- Make credit decisions and disburse funds (lender funds)
- Apply same due diligence as for conventional loans (e.g. credit check and site inspections)
- Register loans, remit registration fees and report and pay administration fees
- Realize all securities and guarantees (in case of default) before submitting a claim for loss
In the event of loan default:
- Industry Canada pays 85% of the net eligible losses to the lender.
- The lender absorbs 15% of the loss.
- 7,196 loans, totalling $996 million
- $138,453 average loan size
- Age of business:
- New businesses (< 1 year) = 57.5%
- Between 1 year and 3 years = 11.5%
- Businesses over 3 years = 31%
- Popular Industry Sectors:
- Accommodation and food services (29%)
- Retail trade (15%)
- Breakdown by assets financed
- 44% equipment
- 24.2% commercial buildings and land
- 31.8% leasehold improvements
What's in it for Small Businesses?
- Helps obtain loans that would not otherwise be available to small businesses or would be obtained under less favourable terms.(e.g. Restaurants, franchises, start-ups)
- Leasehold improvements may be financed.
- Finance up to 90% of the cost of buildings used for commercial purposes, land, leasehold improvements and equipment.
Business Support Organisations can play an important role…
- By increasing awareness of this program through newsletters, web links and the distribution of pamphlets.
How to Reach Us
Canada Small Business Financing Program
235 Queen Street
Ottawa, Ontario K1A 0H5
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