Canada Small Business Financing Program
Get up to $1.15 million in financing for equipment, real estate, or working capital through your bank. This is a repayable loan where the government shares the risk to help you secure funding. You can apply anytime.
“The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.”
From the official program page
Before you spend any money
You must secure approval from your lender before spending any money, as funds are disbursed by the financial institution upon approval.
At a glance
Subject to program rules, available funding, and approval. Confirm current details with the official program administrator.
Is this for you?
- You run a Canadian small business or start-up with annual revenues of $10 million or less.
- You need funds for tangible assets like vehicles or equipment, or a line of credit for working capital.
- You can get a loan from a participating bank or credit union, even if standard commercial loans are harder to secure.
Probably not the right fit if
- You run a farming business, as agriculture is excluded from this program.
- You are looking for a grant or free money, since this is a loan you must repay with interest.
- You want to apply directly to the government, as you must apply through a financial institution.
How much you'd realistically get
Up to $1.15 million total per borrower, split between term loans and lines of credit.
What may be supported
- Purchase or improvement of commercial land or buildings.
- Purchase or improvement of new or used equipment, including commercial vehicles, restaurant equipment, and production machinery.
- Leasehold improvements, such as renovations to a leased property.
- Working capital costs and intangible assets, up to the specified limits.
- Costs to buy a franchise.
What's excluded or restricted
- Farming businesses are not eligible (a separate Canadian Agricultural Loans Act Program exists for them)
How applying works
Effort: moderateYou must prepare a business proposal and financials for your lender, who will conduct a credit review before disbursing funds.
- 01Identify a participating financial institution (bank, caisse populaire, or credit union) using the 'Find a lender near you' tool on the official page.
- 02Prepare your business proposal, including financial statements and details of the assets or working capital you need.
- 03Discuss your needs with a financial officer at the institution, who will review your proposal and creditworthiness.
- 04If approved, the lender will disburse the funds and register the loan with ISED, applying the 2% registration fee and agreed interest rate.
Who to ask: Via your financial institution; program contact through the Small Business Financing Directorate (ISED) 'contact us' page.
Documents commonly required
- Business proposal outlining the purpose of the loan and how it will be used.
- Financial statements (confirm specific requirements with your lender).
- Details of the assets to be purchased or improved (quotes, invoices, or lease agreements).
- Personal and business credit information (confirm with your lender).
What to know before you count on it
- You pay a 2% registration fee on the loan amount, which may be financed into the loan.
- Interest rates are set by your lender but capped at prime plus 3% for term loans or prime plus 5% for lines of credit.
- The lender will likely require security on the assets financed and may ask for an unsecured personal guarantee.
- The lender decides whether to approve your loan based on their own credit and viability review, not the government.
What are your odds?
Approval depends on your lender's assessment of your ability to service the debt and the viability of your business plan, not on a competitive grant selection process.
Frequently asked questions
Is this money taxable?
No, because it is a loan, not income. You repay the principal plus interest and fees.
Can I use this for working capital?
Yes, up to $150,000 of the term loan can be used for intangible assets and working capital costs, or you can take a line of credit up to $150,000 for day-to-day expenses.
Who sets the interest rate?
Your lender sets the rate, but it cannot exceed the federal caps: prime plus 3% for term loans or prime plus 5% for lines of credit.
Do I apply to the government?
No, you apply directly to your bank, caisse populaire, or credit union. They register the loan with ISED after approval.
More funding by what it pays for
Funding for Manufacturing
Grants and loans that may help pay for automation and productivity tools.
Funding for Automation
Loans and grants to help you automate business workflows and tasks.
Funding for Cybersecurity
Some digital grants and technology loans may help pay for cybersecurity measures.
Funding for Export and New Markets
Grants and loans that may help pay for trade shows, research and translation.
What you can combine it with
This financing can often be combined with other grants or tax credits for the same project, but confirm with your lender how the loan structure interacts with other funding sources.
Related programs
Food and Beverage Industry Financing (FCC)
Farm Credit Canada offers loans to food and beverage businesses anywhere in Canada to build, expand, or equip their operations.
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A BDC loan of up to $150,000 for businesses that have operated at least 12 months. Use it to buy assets, pay start-up fees, buy a franchise, or pay…
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BDC: Purchase Order Financing
Up to 90% of costs
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Worth reading before you apply
Get alerted when this changes
Programs open and close, budgets run out, rules change. We send one short email when something changes that matters for this program.
Page last updated ; status and deadline checked . Source: official program page.