Canada Small Business Financing Program (CSBFP)

What it is

The Canada Small Business Financing Program (CSBFP) helps participating lenders extend term loans to small businesses by sharing loan-loss risk with the federal government. The lender makes the call; the government guarantees a portion. Small businesses that wouldn't otherwise qualify for traditional bank financing often qualify under the CSBFP umbrella.

Who qualifies

• Canadian for-profit small business (sole proprietorship, partnership, or corporation).
• Annual gross revenues of $10 million or less.
• Eligible loan purpose: equipment, leasehold improvements, commercial real property purchase, intangible assets (e.g., software, franchise fees), or working capital (with restrictions).
• Not eligible: farming (use the Canadian Agricultural Loans Act program), charities, religious organizations.

How much

• Term loans: up to $1,000,000 total, of which up to $500,000 can be used for equipment, leasehold improvements, intangible assets, or working capital.
• Lines of credit: up to $150,000.
• Lender keeps 15% of the risk; government covers the rest in case of default.
• Lender sets the interest rate (capped at prime + 3% on variable, prime + 3% on fixed for terms over 5 years).

How to apply

1. Identify a participating lender (most major banks and credit unions).
2. Prepare the standard credit-application materials: business plan, financial statements, intended use of funds.
3. Apply at the lender — they review against both their own credit standards and the CSBFP eligibility tests.
4. If approved, the lender registers the loan with ISED.

Common mistakes

• Assuming the government decides — the lender decides; ISED only backs eligible loans.
• Trying to use CSBFP for working capital alone — only certain working-capital uses qualify, and only as part of a larger package.
• Missing the franchise-fee allowance — many franchisees don't realize CSBFP can fund franchise fees as an intangible asset.

Quick eligibility check

Quick check whether your business is eligible for the Canada Small Business Financing Program (CSBFP). For the official determination, talk to a participating lender.

1. Is your business a Canadian-based for-profit small business?

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2. Are your gross annual revenues $10 million or less?

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3. Are you raising the funds for an eligible purpose (equipment, leasehold improvements, real property, etc., not working capital)?

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4. Is your business a farming operation?

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Answer all questions to see the result.

This is a guide, not a determination. The provider has final say.