Small Business Financing

Entrepreneurs make the Canadian economy viable and shouldn’t be left to scramble for the survivability of their businesses by themselves. It is noteworthy to mention that the Covid-19 pandemic dealt a massive blow to business conglomerates globally, much less to small businesses or start-ups. Further underlining the importance of providing a medium through which small businesses can access credits to fund or sustain themselves.

Luckily, financial institutions that specialize in providing business solutions abound in Canada and reach any aspiring entrepreneur. Moreover, these institutions are captured and regulated under some federal government small business financing programs to guarantee the ease of loan acquisition or business financing by emerging entrepreneurs. However, granting loans – plus loan size and repayment pattern and schedule – is entirely at the discretion of the financial institutions.


The federal government understands that the survivability of small businesses is crucial to the sustainability of the Canadian economy, and as such, have come up with credit schemes like the Canadian small business financing program (CSBFP) and the Canadian Agricultural Act Program to help bridge the space between business creativity and business integration and funding.

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Written by: Big Piggyy



Loan Term

14 days -60 months

Est. APR

% 390 - 445

Loan Amount

$100 - 15,000



Loan Term

14 days - 60 months

Est. APR

% 173.81 - 495.36

Loan Amount

$50 - $10,000



Loan Term

12 - 60 months

Est. APR

% 46.93

Loan Amount

$100 - $15,000



Loan Term

90 -150 days

Est. APR

% 26

Loan Amount

$500 - $850



Loan Term

6 - 60 months

Est. APR

% 19.99 - 36.99

Loan Amount

$500 - $15,000

What Is The CSBFP?

CSBFP is a government-regulated initiative aimed at helping upcoming businessmen and women to get business cost-running funds to grow their small businesses. The program seeks to obtain financial security for small business owners by contacting the lending partners to share the risk with the borrower. Every small business owner is entitled to a maximum of 1 million dollars, one-third of which is allowed to be used for purchasing a leasehold property or equipment or improving business properties. However, no related business, i.e., business arms owned by one person, cannot get beyond 1 million dollars as the said sum can only be shared by associated companies.


How Is CSBFP Obtained?

Firstly, for a start-up to qualify for this loan, the business must be operational in Canada and have gross annual revenue of 10 million dollars or less for the first 52 weeks of operation. Such business can be cooperation, sole proprietorship, or cooperative. The business should be in the area of production, service delivery, and ICT related.

Lending companies primarily provide the loan, and they determine whether a business outfit is worth a CSBFP. All that is required is for the borrower to approach a bank, credit union, or other financial institution to submit their business proposal. If the loan is approved, the requested sum is deposited into the borrower’s account after the necessary credit check on the borrower or their principal has been conducted.


How Are CSBFP Loans Different From Other Conventional Business Loans?

To avoid doubt, not all lending companies are captured under the CSBFP, and as such, not bound to the program’s stipulations. A loan obtained via CSBFP cannot finance farming because the Canadian Agricultural Act program provides credit. However, business loans from regular companies can be used for any purpose since the lender is only interested in the ability of the borrower to pay back. However, lenders under CSBFP are expected to maintain the same due diligence in granting such loans as they would in conventional loans. As such, a credit check on a corporate borrower or a borrower’s principal is conducted before loans are granted. Also, When a borrower defaults, due diligence is expected of the lending company to realize defaulted loans.


Which Fees Are Associated With CSBFP Loans?

Unlike regular loans that come with fixed interest rates, small-business lenders under CSBFP operate with two categories of interest rates; fixed and variable rates and a fixed registration fee.

Fixed Rates

Fixed rates involve 3% of the loan fee plus the lender’s single-family residential mortgage rate for the loan duration.


Variable Rates

Variable interest rate includes 3% of the loan fee plus the lender’s prime lending rate.


Registration Fee

Registration for CSBFP loans attracts a registration fee of 2% of the loan amount. It can be added to the interest sum when the loan repayment is due.


What Can I Purchase With A CSBFP Loan?

As opposed to other conventional loans, CSBFP loans are granted after the appraisal of a business proposal by an agent of a particular lending company. As such, this loan can be used to purchase new or used equipment like;


  • Production equipment
  • Commercial vehicles
  • Computer or telecommunication equipment and software.


However, such loans cannot be used as working capital, purchasing inventory, research and development, and even for goodwill gestures.


If I Don’t Want The CSBFP Loan, What Other Loan Can I Try?

As stated before, not every lending company in Canada is captured under the CSBFP. It follows that if the terms of the CSBFP lender is not suitable for you, you can try other lenders like;


This company offers 60,000 dollars for start-ups in Canada, but they have to be run by a black citizen. Like CSBFP, futurpreneur shares the risk with the borrower, but unlike CSBFP, they help black entrepreneurs through the process of business planning, organizing, and even launching. The company finances 60% of the 60,000 dollars loan while its partners, the RBC and BDC, take care of the rest.



This company has a range of loan products to support the growth and development of business starts up in Canada. The company recognizes and acknowledges the diversity of Canadian society and curated a lot of products to aid blacks, women, and even newcomers to build and finance a business plan. Unity pivot loans and business credit availability programs have also been introduced to help cushion the effect of the Covid-19 pandemic on businesses.



Financing a small business in Canada is not as hard as coming up with a business idea, this is because the government has become aware of the impact of a thriving business community on the nation’s economy and has sought to provide small businesses with a means to grow through the Canadian small business financing program. Lenders under this program provide secured loans for entrepreneurs to subscribe. All that is required is to present your business proposal to any financial institution, after which a credit check is conducted if approved, the funds are released via direct bank deposits. However, Other lenders not captured under this program operate with different loan agreement terms.

Big Piggyy

"Show me the MONEY!!!" – Jerry Maguire

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