Overview and Highlights 2016-17

Overview

The purpose of the Canada Small Business Financing Program (CSBFP) is to increase the availability of financing to small businesses that would otherwise have been unavailable to them, or only been available under less favourable conditions. By sharing the risk of lending, the government facilitates access to term loans made by private sector lenders to small businesses to purchase or improve real property, leasehold improvements and equipment. To be eligible, borrowers must be for-profit businesses with annual revenues of $10 million or less. The CSBFP is a national program that operates through a network of financial institutions in all provinces and territories.

The role of Federal Government

Innovation, Science and Economic Development (ISED) Canada is responsible for the design and administration of the CSBFP. It reviews and evaluates the legislative and regulatory frameworks and recommends improvements on a periodic basis. It also administers the program by registering loans, collecting fees and paying lenders eligible portions of losses on defaulted loans. The Department, however, is not involved in the disbursement and administration of the loans.

The role of lenders

Private sector lenders are responsible for making all credit decisions, approving and disbursing the loans, registering the loans with the CSBFP and administering and receiving loan payments. Each lender has its own lending criteria subject to the requirements of the CSBFP. Once the loan is approved, the borrower receives the funds from the lender, not the government. If a loan is in default, the lender must recover all assets taken as collateral for the loan, together with all the necessary documentation to justify the claim, before forwarding their claim for loss to the CSBFP. Once the lender's information is reviewed and the claim is approved, the lender is paid 85 percent of their net eligible loss.

Highlights

Lenders registered small businesses loans worth $971.2 million

CSBFP paid claims of $61.8 million to lenders

Equipment and leasehold improvements were the most common assets financed

 Lending was accessible in every province and territory

Accommodation and food services and retail sectors were the primary industry sectors using the program

Start-ups and new businesses received the largest share of financing

CSBFP website is a popular channel for small business information

The CSBFP website continued to be one of the Department's most popular sites, with 199,538 visits. Also, more than 2,300 telephone and email inquiries were received from small businesses and lenders through the program's info line and website, and over 54,500 information pamphlets were distributed.

For more information on the administration and financing activities of the CSBFP since 1999, visit the CSBFP historical data on the Government of Canada's Open Data Portal.

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