How To Get Loan For Small Business In Canada

Canada Small Business Financing (CSBF) Loan

This federal government guaranteed loan provides the financing you need to get a business started or help an existing business grow. The CSBF Loan is designed to help businesses purchase, install, renovate and modernize business equipment and other fixed assets.

How can this help my business?

• The Canada Small Business Financing Loan can provide a Canadian business with up to $500,000 in financing for the purchase of land or business premises ($350,000 for leasehold improvements and equipment)
• With assistance from the federal government, businesses can support their financing requirements without using personal assets as security
• Term loans extend financing assets not normally covered by traditional financing options, for example, lease improvements

What else do I need to know?

• Financing can be used to cover up to 90% of the eligible costs related to leasehold improvements and equipment
• If the loan is for the purchase of premises, 50% of the floor space must be for your business activity
• Current fiscal year gross revenues must not exceed $5,000,000
• The maximum value of all CSBF Loans an independent small business may have outstanding with all lenders (including RBC Royal Bank) cannot exceed $500,000 ($350,000 for leasehold improvements and equipment)
• Applications must be submitted with a business plan which includes financial statements or projections
• Eligible purchases made within the past six months can be financed
• Loan terms are generally 7-10 years depending on the asset being financed
• Maximum interest rate on variable rate loans is Prime + 3.0%, fixed rate loans is Residential Mortgage Rate + 3.0% which includes an annual administration fee equal to an annual rate of 1.25% which is payable to the government
• Personal guarantees are required but are limited to a maximum of 25% of the loan
• A one-time up front government registration fee of 2% of the loan amount is payable to the government and can be added to the loan principal
• Business Loan Insurance Plan is available (certain restrictions may apply)
  
  
  

  Find a loan for your small business

  This is a loan program in collaboration with financial institutions. If you are looking for other government financial incentives including grants or general information for small businesses, please access the Canada Business Network.
  

  What can loans be used for under this program?

  To finance the cost of:
• purchasing or improving land and buildings used for commercial purposes
• purchasing new or existing renovations to premises occupied by the business as a tenant
• purchasing or improving new or used equipment (including commercial vehicles)

What are the maximum loan amounts?

Who is eligible?

Small businesses or start-ups operating for profit in Canada, with gross annual revenues of $10 million or less.

Not eligible under this program are farming businesses (Agriculture and Agri-Food Canada has a similar program for the farming industry — for information, visit www.agr.gc.ca),not-for-profit organizations, or charitable and religious organizations.

For more information, visit the business eligibility section of our guidelines

How do I apply?

Present your business plan directly to a chartered bank, credit union or caisse populaire. Your financial institution is responsible for making the decision to approve your loan.

Find a lender near you

Download our pamphlet

Want to know more about the program? Watch our interactive presentation!