Small Business Loans Ontario: CSBFP and BDC Financing

Program Update: Read the latest CSBFP overview blog for additional insight into the program.

The Canada Small Business Financing Program (CSBFP) assists small businesses in acquiring loans from financial institutions. In CSBFP, the Government of Canada shares the risk of loans with lenders, making it easier for small businesses to be approved. This program has been around for over 50 years and has since assisted with over $1 billion in loans.

Canadian Government Funding for Small Business Details

The purpose of CSBFP is to help small businesses improve and expand through acquiring loans that they may not otherwise have access to. CSBFP government funding for small business program also strives to stimulate economic growth and create jobs.   To apply for this program, you must be a small business or start-up operation for-profit in Canada, with gross annual revenues of $5 million or less. Additionally, farming businesses are not eligible for this Canadian small business loans program.  CSBFP provides a maximum of $500,000 of financing; 90% of which can be used for purchasing or improving land or immovable, purchasing new or existing leasehold improvements, and purchasing or improving new or used equipment. The interest rate for the small business’ loan is determined by financial institutions and could be variable or fixed. The maximum chargeable for a variable rate is the lender’s prime lending rate of plus 3% and the maximum chargeable for a fixed rate is the lender’s single family residential mortgage rate of plus 3%.

Government Funding for Business Examples of Eligible CSBFP Activities

CSBFP government funding for business can be used to cover some of the following expenses:

• Buildings and land
• Commercial vehicles
• Hotel or restaurant equipment
• Computer or telecommunications equipment and software
• Production equipment  – New or Used
• Leasehold improvements for a franchise

Other Canadian Government Funding Loan Options

Some more options for small businesses are BDC’s Market Xpansion Loan and BDC’s Information and Communications Technology (ICT) financing program. These loan programs are flexible and are intended to make small businesses more productive, efficient, and profitable.   Yet another option is Southern Ontario Fund for Investment in Innovation (SOFII) offered through FedDev Ontario.  SOFII is a great option for businesses looking for an Ontario government loan for late-stage commercialization that supports job creation.

BDC’s Market Xpansion Canadian government funding for small business loan is directed at growing a business through expanding domestic markets and exploring export markets. The loan program offers a maximum of $100,000 of long-term financing without penalty at any time during the term of the loan. Meanwhile, the BDC’s ICT loan assists small businesses in purchasing or upgrading hardware (servers, network, computers, and accessories), software (ERP, CRM HR, supply chain, finance and accounting), and consulting services (IT planning, strategy, security, online services, internet marketing, social media). ICT offers a $50,000 loan at an interest rate of prime + 1% and a four-year repayment period.

Canadian and Ontario Small Business Loans Application Resources

Visit our article titled:  How to Qualify for SOFII Small Business Loans Ontario for more information on eligibility criteria and application for SOFII low-interest loans for small and medium-sized businesses.

Learn More About the Canada Small Business Financing Program

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