Canada Small Business
Financing Loan
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Empowering Enterprises with Government-Backed Financial Support
Unlock the growth potential of your business with the Canada Small Business Financing Loan (CSBFL), a government-backed initiative designed to ease the financial challenges of expanding Canadian businesses. This loan program supports purchasing or improving land, buildings, and essential equipment, with financing up to $1,000,000, fostering the scalability and enhancement of your operations.
Commonly utilized by emerging businesses to secure physical assets and by established entities for significant capital investments, the CSBFL is known for its accessible terms and government guarantee, covering a majority of the loan.
Canada Small Business Financing
Loan Features
Use of Proceeds
- Purchase or improvement of land or buildings used for commercial purposes.
- Purchase or improvement of new or used equipment.
- Purchase of new or existing leasehold improvements, i.e., renovations to a leased property by a tenant.
- Intangible assets and working capital costs.
Loan Amounts
The maximum loan amount for a borrower is $1.15 million:
- Up to a maximum of $1,000,000 for term loans for any one borrower,
- Of which no more than $500,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment and of that amount,
- Maximum of $1,000,000 in financing to buy or improve real property used for commercial purposes.
- Any combination of real estate, leasehold improvements, or equipment within each loan class limit.
- A maximum of $150,000 could be used for intangible assets and working capital costs.
Term
- Amortization on loans for equipment, leasehold improvements, intangible assets, working capital can range between 5 – 15 years.
- Amortizations on CSBFA loans secured real property can range from 15 to 25 years.
- Amortization for equipment, leasehold improvement, working capital, intangible assets, and real property loans are subject to lender credit adjudication and approval.
Advance Rate
- Up to 100% of the “Eligible Costs” of assets financed.
Benefits
- The government guarantees up to 85% of the loan
- Longer-term financing
- Variety of repayment options (Competitive fixed and floating interest rates are available with monthly repayment frequency)
- Improved cash flow
What can be financed
Term loans can be used to finance the following costs:
- Purchase or improvement of land or buildings used for commercial purposes.
- Purchase or improvement of new or used equipment.
- Purchase of new or existing leasehold improvements, i.e., renovations to a leased property by a tenant
- Intangible assets and working capital costs
For example, you can use a term loan to finance:
- Commercial vehicles
- Hotel or restaurant equipment
- Computer or telecommunications equipment and software
- Production equipment
- Costs to buy a franchise
Lines of credit can be used to pay for working capital costs, that is, day-to-day operating expenses of the business.
interest rates
For term loans, the interest rates are determined by your financial institution and may be floating or fixed.
- Floating: The maximum chargeable is the lender’s prime lending rate plus 3%.
- Fixed: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.
For lines of credit, the maximum chargeable is the lender’s prime lending rate plus 5%.
interest rates
For term loans, the interest rates are determined by your financial institution and may be floating or fixed.
- Floating: The maximum chargeable is the lender’s prime lending rate plus 3%.
- Fixed: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.
For lines of credit, the maximum chargeable is the lender’s prime lending rate plus 5%.
registration fee
For term loans, the 2% registration fee is based on the total amount loaned under the program.
For lines of credit, the 2% registration fee is based on the total amount authorized.
Registration fees must be paid by the borrower to the lender and they may be financed.
**Personal guarantee required, starting at 25% of the loan amount.
**One-time Federal Government registration fee of 2% of the loan amount. You can pay the fee upfront or include it in your loan amount, provided you stay within the maximum limit of the corresponding loan category.
Key benefits include:
- Limited personal guarantee
- Start Ups or Existing Businesses Eligible
Embrace the opportunity to drive your business forward with the backing of the Canada Small Business Financing Loan. For more information and additional government requirements, contact us today.
