Most start-up programs are loans. Of the 103 programs we track for people starting a business, 71 are loans and 32 are grants. Many Canadian businesses are built on borrowing, and government-backed loans publish terms that an ordinary commercial loan does not.
Canada Small Business Financing Program
This is the largest of the three, and you do not apply to the government for it. You apply to a participating financial institution: your own bank or credit union. The Small Business Financing Directorate at Innovation, Science and Economic Development Canada backs the loan and shares the risk with your lender.
The maximum is $1,150,000 per borrower, split into separate limits for different uses. Up to $1,000,000 of it can be a term loan, of which no more than $500,000 can go to leasehold improvements and purchasing or improving new or used equipment, and no more than $150,000 to intangible assets and working capital. A further $150,000 is available as a line of credit. It funds commercial land and buildings, equipment including commercial vehicles and restaurant equipment, and renovations to a space you lease. Your business needs annual revenue of $10 million or less. Farming businesses are not eligible; a separate program covers them.
The costs are published, so you can compare them with other loans. You pay a 2% registration fee on the loan amount, and that fee can be financed into the loan. Interest is set by your lender but capped at prime plus 3% on term loans and prime plus 5% on a line of credit. Your lender will likely require security on the assets being financed and may ask you to back the loan personally. The credit decision is the lender's, based on your plan and your ability to service the debt.
BDC Financing: Start-up
BDC lends up to $150,000 here, with interest-only payments available for up to the first 12 months and a longer amortization period. It is aimed at equipment and assets, franchise fees, and marketing campaigns.
Read the eligibility before you build a plan around it, because the name misleads. You need at least 12 months of operating history, current revenue and a solid credit history. A business that has not opened yet does not fit. Rates are not published, so confirm the number with BDC.
Once you are past 24 months of revenue and currently profitable, BDC Financing: Small Business Loan goes up to $350,000 over a 5 to 8 year amortization, with up to 6 to 12 months of interest-only payments where conditions apply.
Futurpreneur Canada Side Hustle
If you are a Canadian citizen or permanent resident aged 18 to 39 and building the business alongside a job, this is the smallest and most specific of the three. Futurpreneur Canada Side Hustle lends up to $25,000 and takes no equity. Interest is CIBC prime plus 3%, capped at 9%, with a one-time 1% loan management fee charged when the money is released. The condition is that you keep a full-time income outside the business for at least the first 12 months.
You will need a business plan and a 24-month cash flow projection.
The Futurpreneur Canada Core Start-Up Program is a separate program with its own rules, not a larger version of the same one. It combines up to $25,000 from Futurpreneur with up to $50,000 from BDC, for up to $75,000 in total, plus two years of mentorship. It is for owners aged 18 to 39 starting a business or buying one that has been running for less than 24 months, where you own more than half of it. Fees are charged separately: the 1% loan management fee applies to the Futurpreneur portion, and BDC deducts a $50 processing fee from the initial disbursement. There is a hard credit check, your taxes must be up to date, and it cannot refinance existing debt.
If you are outside a city
Community Futures Network of Canada runs 267 non-profit offices serving rural and remote communities, lending for starting, expanding, franchising and selling a business. Loan sizes and rates are set locally, not nationally, so the only reliable figure is the one that office gives you. They also expect you to show that a regular bank would not fully cover your needs.
What the government backing gives you
It gives you two things. First, a rate ceiling: on the Canada Small Business Financing Program the most a lender may charge is capped by the program at prime plus 3% on a term loan and prime plus 5% on a line of credit. On a conventional loan that number is whatever you negotiate. Second, the federal government shares the risk with your lender.
It does not give you an approval. Your lender still decides, based on your plan and your ability to repay. You also pay the 2% registration fee for the backing, so on a small loan, work out what that fee costs you before you commit.
Which one fits
- Aged 18 to 39 and still earning elsewhere. Futurpreneur Canada Side Hustle. Smallest amount and the clearest published terms.
- Buying equipment, fitting out a space or buying property. Your own bank, under the Canada Small Business Financing Program. Ask for it by name.
- A year of revenue behind you. BDC Financing: Start-up, then BDC Financing: Small Business Loan once you are profitable and past 24 months.
- Rural or remote community. Your local Community Futures office, alongside any of the above.
Look for grant money separately. It is usually municipal or provincial and tied to a defined project such as a fit-out or a storefront. Starter Company Plus in Ontario is a grant of up to $5,000 for starting, expanding or buying a business, and asks you to contribute at least 25% of the grant amount yourself. Check each program's stacking rules before you plan to combine two: some forbid it outright, and the Retail Modernization Project Grant will not fund a line item that carries other federal or provincial money.
Want the whole country on one page? See start-up funding, province by province.