Apri 30, 2025
Adam Hoeksema
If you’re a Canadian entrepreneur looking to grow your small business, the Canada Small Business Financing Program (CSBFP) is something you should definitely have on your radar. Whether you’re buying equipment, renovating a space, or launching a new location, this government-backed program can make it easier to get the funding you need—even if you’re just getting started.
Here’s everything you need to know before applying.
What is the CSBFP?
The CSBFP is a federal initiative designed to help small businesses access financing by reducing the risk for lenders. When a business qualifies, the loan is partially guaranteed (up to 85%) by the Government of Canada, which makes financial institutions more willing to lend.
But the CSBFP isn’t free money—it’s a real loan, issued by your bank or credit union, and it comes with terms, interest, and responsibilities. Think of it as a traditional business loan with a government safety net for the lender.
Who’s Eligible?
To qualify for the CSBFP, your business must:
- Be for-profit
- Have gross revenues of $10 million CAD or less
- Operate in Canada
- Not fall under excluded categories like agriculture, charities, or religious organizations
And no, you don’t need to be a Canadian citizen—but you do need to have legal status to operate a business in Canada (citizen, PR, or valid work/entrepreneur permit).
This program is designed to help you invest in the long-term health of your business. Funds can be used for:
- Buying or improving commercial real estate
- Purchasing or upgrading equipment (new or used)
- Making leasehold improvements
- Buying a franchise
- Investing in software or website development (up to $150,000 CAD)
- Covering eligible working capital costs
Note: Working capital financing is available either through a term loan (up to $150,000 CAD) or through a CSBFP line of credit, which is also capped at $150,000 CAD.
How Much Can You Borrow?
- Up to $1,000,000 CAD in total
- $500,000 CAD for equipment and leasehold improvements
- $150,000 CAD for software and digital assets
Lenders will usually require you to contribute 10% to 30% of the project cost from your own funds. This shows commitment and reduces their risk.
Loan Terms You Should Know
- Repayment period: Up to 10 years
- Interest: Capped at lender’s rate + 3% (fixed or variable)
- Registration fee: 2% of the loan amount (can be financed)
- Monthly repayments: Required
A personal guarantee is typically required—sometimes unlimited, depending on the lender.
Common Reasons Applications Get Denied
Not every application gets approved. Some of the most common red flags include:
- Lack of experience in your business’s industry
- A weak or generic business plan
- Unrealistic financial projections
- Trying to finance ineligible business (as agriculture or a non-profit)
- Poor credit history
- No personal contribution toward the project
How to Improve Your Chances of Approval
If you want to increase your odds of securing funding through the CSBFP, here’s what we recommend:
1. Build a solid business plan
Your plan should clearly explain your business model, market, and growth strategy. Show that you’ve done your homework. Here you can find a free business plan template.
2. Include realistic financial projections
Forecast your revenue, expenses, and cash flow for the next 2–3 years. Back it up with data where possible. You can check our library with more than 100 industry-specific DIY financial projection templates and we also offer a Fill-Out Service where we create the Financial Projections for your business.
3. Provide quotes or documentation
If you’re financing equipment, renovations, or software, include actual vendor quotes or estimates to justify the loan amount.
4. Demonstrate relevant experience
Your background matters. If you’ve never worked in the industry before, consider bringing in a partner or advisor with experience.
5. Be ready to offer a personal guarantee
Most lenders will ask for one. Offering it upfront shows confidence in your plan.
6. Contribute your own funds
This shows lenders you have skin in the game. Even a modest contribution can make a difference.
7. Shop around
Not all lenders treat CSBFP loans the same way. Credit unions and smaller banks may offer more flexibility than large national banks.
Final Thoughts
The CSBFP is a powerful tool for entrepreneurs looking to grow, improve, or launch their business in Canada—but it’s not automatic. You’ll need a well-thought-out plan, a clear ask, and a little preparation.
If you’re ready to take the next step, stay tuned for our upcoming post where we’ll guide you through building a professional loan package that gets attention—and approvals.
