Canada Small Business Financing Program (CSBFP)

This program is designed to increase small business access to capital. Using a risk sharing model, the Canada Small Business Financing Program (CSBFP) makes obtaining a loan more affordable while covering the lender’s share of funding risk (up to 85%) with Innovation, Science, and Economic Development Canada (ISED).

Who can qualify for CSBFP loan

CSBFP loans are issued directly by the bank. Every financial institution has own eligibility requirements for approval. However, Canadian government requires you to meet the following criteria to qualify with the bank before they can begin their own process.

Eligibility criteria:

• Start-up or existing small business, purchase of existing business operating in Canada, business expansion or partnership buy out. 
• Annual revenue must be less than $10 million
• Must be for-profit business (charities, religious organizations and farms do not qualify)

Eligible Purchases:

Equipment purchase and leasehold improvements

How much Financing is Available?

Up to 90% of eligible purchases, subject to the following:

• Up to $350,000 for leasehold improvements and or equipment financing
• Up to $1,000,000 for real property purchase or improvements

Loan Amortization:

• Up to 10 years for leasehold improvements and equipment
• Up to 30 years for real estate property loans

Fees:

The Government of Canada fee of 2% of the loan amount payable at the time of the loan advance. This fee may be financed, subject to program loan maximum. 

Other Options

• Financing is available on all eligible assets purchased within 180 days prior to loan approval.
• Minimum 50% of purchased real property must be used for business purposes
• Such items as: Inventory, Goodwill, Franchise fees, Working capital, Research and development, are not allowed to be financed under this program.
• Loan is available up to 12 months from approval date.

Qualifying requirements:

• Canadian Citizenship or Permanent Residency
• Minimum beacon score of 650 from Equifax
• 30% of liquid assets (Cash, GIC’s, Stocks, HELC, TFSA, Gifts, Prepaid invoices, other savings) and 30% non-liquid assets such as real estate (minimum 20% equity). As an alternative 60% liquid assets is acceptable.
• Current 2 years NOA’s with average income two times expenses