Canada Small Business Financing Program

About the Program

Small businesses are an important part of Canada’s economy, but they face unique challenges when they look for financing.

The Canada Small Business Financing Program helps you with your financing needs. Under the program, the Government of Canada makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

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; and
  •  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.

Who is eligible?

Small businesses operating for profit in Canada, with gross annual revenues of $5 million or less.

Not eligible under this program: 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.

How much financing is available?

On June 23, 2015, amendments to the Canada Small Business Financing Act were implemented which increased the maximum amount for real property loans from $500,000 to $1M and broadened the criteria for eligible businesses from those with $5M or less in gross annual revenues, to those with $10M or less in gross annual revenues.

How do I apply for a loan?

Credit unions, including Community Credit Union, deliver this program. Industry Canada does not participate in making the decision to accept or refuse your loan application.

Community Credit Union’s commercial lenders will review your business proposal and make a decision on your loan application. Once the decision is made to offer financing under the program, the financial institution will register the loan with Industry Canada.

What can loans be used for under this program?

Loans can be used for financing up to 90% of the cost of:

  •  purchasing or improving land, real property or immovables;
  •  purchasing leasehold improvements or improving leased property; or
  •  purchasing or improving new or used equipment.

For example, you can use a loan to finance:

  •  building and land
  •  commercial vehicles
  •  hotel or restaurant equipment
  •  computer or telecommunications equipment and software
  • production equipment

You cannot use a loan to finance items such as:

  • goodwill
  • working capital
  • inventories
  • franchise fees
  • research and development

What are the costs?

The interest rate is determined by Community Credit Union.

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.

What are the terms of the financing?

Community Credit Union is required to take security in the assets financed. We also have the option to take an additional unsecured personal guarantee, which cannot exceed 25% of the total amount loaned.

For more information, please contact Community Credit Union at either 902-667-7541 (Amherst)  or 902-893-7134 (Truro)

This program is administered by:

Small Business Financing Directorate
Industry Canada
Telephone:1-866-959-1699 (toll-free)
Fax: 1-613-952-0290
Email:
Canada Small Business Financing Program
Internet:www.ic.gc.ca/csbfa

 


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