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Canada Small Business Financing Program
9-05-2016
The challenge facing most Canadian businesses is how to find and take advantage of suitable Canadian government loans to assist with their cash flow and accelerate their growth.
Frequently Asked Questions—For Small Businesses
Am I Eligible?
1. 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 $10 million or less are eligible to apply for loans under this program. Such businesses can be corporations, sole proprietors, partnerships or cooperatives.
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.
3. Can I purchase an existing business under the CSBFP?
The purchase of eligible assets of an existing business may qualify for financing under the CSBFP. You may finance the lesser of the cost of purchase and the appraised value of the eligible assets. Please contact your financial institution before committing to appraisal expenses to ensure all other requirements are met.
4. 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, franchise fees, or assets that a holding company acquires.
This list is not exhaustive. When in doubt, speak with your financial institution.
How to Apply?
5. 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.
6. Do I need to communicate with Innovation, Science and Economic Development Canada (ISED) 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 ISED is available to provide you with information related to the program. However, ISED does not get involved in the decision making process of financial institutions nor does it accept or process loan applications.
7. 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.ca to explore other government funding options that might better suit your needs.
8. 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.
Footnotes: Footnotes: This column is presented as a general source of information only and is not intended as a solicitation for business. Mohammed Yasin, CPA,CGA, is the principal of M. Yasin & Co. Inc., Certified General Accountants and has offices in Vancouver & Surrey,B.C.
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