The Canada Small Business Financing Program (CSBFP) is a part of the Canada Small Business Financing Act created to improve access to Business Loans at competitive Interest Rates for Entrepreneurs to establish a start-up or improve their small businesses.
“Business Loans at Competitive Interest Rates”
Who is eligible?
Businesses that qualify for Canada Small Business Finances Program are Small Businesses or Start-ups operating for profit in Canada with other qualifying criteria as follows:
- Are Canadian-Operated Businesses
- Have Annual Revenue of $10 Million or less
- Have Good Credit History
How much Financing is available?
Under CSBFP, the financial support of up to $1,00,000 is provided to the borrower with a condition that no more than $350,000 of the loan amount would be used for purchasing or improving equipment, or to purchase leasehold improvements.
How do I apply for the Loan?
Financial Institutions providing loans under the CSBFP are entirely responsible for the paperwork and approval of loan to the Eligible Businesses.
What can be Financed?
The loan under CSBFP can be used by businesses for expansion activities mainly including the following:
- The acquisition of a building or Leasehold Improvements
- Purchasing new or used equipment
- Software components
What are the Costs?
- The Interest Rate on the loans under CSBFP is determined by the Financial Institutions and can be Fixed or Variable.
- Fixed Interest Rate: Maximum chargeable is lender’s single-family residential mortgage for the term of the loan plus 3%.
- Variable Interest Rate: Maximum chargeable is lender’s prime lending rate plus 3%.
- The Registration Fees of 2% of the loan amount under CSBFP is also levied on the borrower and can be financed as a part of the loan.
What are the terms of Financing?
The borrower applying for the loan under the CSBFP are required to provide security in the assets financed. Lenders also can ask for an additional unsecured personal guarantee from the borrower.