The Canada Small Business Financing Program

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Small Business Financing Program In Canada

First Published: Published on: Nov 7, 2010

Living in Canada, you have a great opportunity to start your own business. When you do, you may want to look at government help to build your business as time goes on. If you are looking for government help, then one of the main programs available to you is the Canada Small Business Financing Program. This program was created to increase the availability of loans for establishing, expanding, modernizing and improving small businesses within Canada. The way that it does this is by encouraging banks and other financial companies to make money available for small business. Much like the Small Business Administration, the CSBFP will share part of the financial risk with the person trying to get the loan. This program can then help you get up to $500,000.

When you get a loan through the CSBFP, the loan will cover roughly 90 per cent of the costs associated with buying or improving on land or property, purchasing leased property and equipment and purchasing new equipment or improving the equipment that you already have.

In order to be eligible for this program, the small business must be operating for a profit in Canada and must have annual gross revenue of less than $5 million. If you want to apply for this program, you need to apply directly with a bank or financial institution through the CSBFP, and the bank or financial institution will be full accountable for approval of the loan.

The CSBFP was created through the Canada Small Business Financing Act in April of 1999. It was created to build upon the extensive success of the Small Business Loans Act. The objectives of the act was to streamline loan administration and improve the cost-recovery ability of a business, while extending financing to small and medium sized businesses that may not get a loan otherwise. This then helps the economy by having more people working, more businesses in the country and more people working hard to make their business a success. The CSBFP makes it easier for these small businesses to get their loans from banks and financial institutions because they share the risk with the small business owner. Essentially, the CSBFP is the co-signor of the loan with you, no different than a family member of friend would be.

The objectives of the CSBFP come down to the following:

  1. Help new businesses get off the ground and give the companies already started to make improvements and expand upon their past success.
  2. To make it easier for businesses to get loans they may not have been able to get previously.
  3. To promote economy activity and job creation in Canada.

How successful is the program? Each year, the program will provide 10,000 loans to small businesses in Canada, averaging $1 billion per year in total.

While you know the eligibility requirements for the program in Canada, there are some businesses that are not allowed to take advantage of it. These are farming businesses, which can get their own support from Agri-Food Canada, which has a similar program in place.

If you want to get a loan through the CSBFP, you can get a loan for up to $500,000 and no more than $350,000 can be used to buy lease equipment or improve upon leased property.

The program is provided through financial institutions and you can ask them about it when applying for a loan. It is very important to remember that Industry Canada, which operates the CSBFP does not accept or refuse loan applications and has no part in the decision process, that is all banks and financial institutions.

If you want to apply for the program, or learn more about it, you can contact Industry Canada at:

Small Business Financing Directorate

Industry Canada

1.866.959.1699 (phone)

1.613.952.0290 (fax)

If you are curious about other programs in place to help you, here are just a few:

Community Futures Development Corporations: Funded by the government, these corporations operate not-for-profit to provide loans, training, support and more to businesses located in rural communities across the country.

Atlantic Canada Opportunities Agency: The government also operates this program and it provides interest-free loans and other opportunities to businesses that are located in the Maritime provinces.

Western Economic Diversification Canada: This program is operated through the government and it sponsors loan programs for those who are located in British Columbia, Alberta, Saskatchewan and Manitoba.

The Business Development Bank of Canada: This bank program is run through the government of Canada and it provides small businesses with low-cost consulting, venture capital and flexible solutions to financial problems.

Human Resources and Social Development Canada: This federal development operates several programs to help unemployed and underemployed Canadians by offering entrepreneurial start-up funding, training subsidies and hiring subsidies.

When you live in Canada, there are many opportunities for you to attempt to get work within Canada by starting your own business. When you start your own business, sometimes you need a helping hand and that is where the government comes in. Through the Canadian Small Business Financing Program, and other programs in pace, you can get the help you need to start your business and see it become successful in the future. It is easy to apply for these programs and generally you should be able to get approval. One of the great things about these programs is not only can you get money you may not have received previously, but you will also get loans on favorable terms with long repayment schedules, low monthly payments and very low interest, which makes it easier for you to pay back the loan.

As a Canadian, you have the right to start your own business, so look at some of these programs to see what is going to work for you and what you can do to make your business successful in the future.