The Canada Small Business Financing Program is to Business What Water is to a Plant
Since 1961, the Canada Small Business Financing Program (CSBFP) seeks to increase the availability of loans for establishing, expanding, modernizing and improving small businesses. 2015 marked the 54th Anniversary of the program. There has never been a better time to consider the Canada Small Business Financing Loan for your business Funding Needs. In January 2015, Stephen Harper announced the government’s intent to improve access to financing for Canadian Small Businesses. Click Here for the news release.
By encouraging financial institutions to make their financing available to small businesses through a partial guarantee of the loan, entrepreneurs are able to access funds they would otherwise be ineligible for. By sharing the risk with your financial institution, the program may help you secure up to $500,000.
The loans can cover 90% of the costs to:
- purchase or improve land or property
- purchase leasehold improvements or improve leased property
- purchase new equipment or improve used equipment
- finance commercial vehicles
- purchase hotel or restaurant equipment
- purchase computer or telecommunications equipment and software
- purchase production equipment
- purchase a website
Up to a maximum of $500,000 funds are available for any one business, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.
Eligible small businesses must be operating for profit in Canada and have annual gross revenues lower than $5 Million. 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.
The program’s main objectives are:
- to help new businesses get started and established firms make improvements and expand
- to improve access to loans that would not otherwise be available to small businesses
- to stimulate economic growth and create jobs for Canadians
- On average, the program helps small businesses access 10,000 loans worth more than $1 billion each year.
What are the costs of borrowing?
The interest rate is determined by your financial institution. The interest rate may be variable or fixed:
- Variable rate: The maximum chargeable is the lender’s prime lending rate plus 3%.
- Fixed rate: The maximum chargeable is the lender’s single family residential mortgage rate plus 3%.
- A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan.
- The registration fee and a portion of the interest are submitted to Industry Canada by the lender to help offset the costs of the program for the government.
Lenders are required to take security in the assets financed. Lenders also have the option to take an additional unsecured personal guarantee, which cannot exceed 25% of the total amount loaned.
Bull’s Eye Business Consulting has a proven track record of helping businesses obtain financing through the Canada Small Business Financing Program (CSBFP). From helping entrepreneur identify their eligibility for the loan, to helping create a package of all necessary documents through the “financial backpack”, to developing a lender-ready business plan, and finally presenting the business as a strong candidate for the loan, Bull’s Eye Business Consulting gives you the best chances to successfully obtain a Canada Small Business Financing Program (CSBFP) loan in a short time span.
Please contact Bull’s Eye Business Consulting for a free consultation, which will include a detailed presentation of the Canada Small Business Financing Program, and to assess your eligibility.
More about Canada’s Small Business Financing Program