There are definite advantages to securing government business loans in Canada. In addition to supporting diversity and interest in the country, these loans help boost local economies. One of many programs available is the Canada Small Business Financing Program (CSBFP). This program secures approved business loans offered by financial institutions, similar to the manner in which veteran home loans secure payment of a lender mortgage for veterans.
For the small business owner, finding capital to raise the business to the next level may prove to be difficult. And for a start-up, many traditional lenders are not willing to take the risk. This article will contain the information needed about the CSBFP, created especially for small to medium businesses.
Topics in this article include:
The Canada Small Business Financing program is open to Canadian businesses. Also, small businesses operated by foreign citizens are eligible, if the business is in compliance with federal or provincial legislation. The business and assets must be used in Canada. Overall, any Canadian start-up or small business that generates less than $10 million in revenue annually will qualify to apply. The business may be a corporation or sole proprietorship.
CSBFP funds can be used to:
The CSBFP is not offered to the farming industry. However, the Canadian government does have other programs to fund farm based loans. Franchise fees, inventory, working capitol and other things cannot be funded with CSBFP monies. The complete list is available online or at the financial institution where the borrower applies.
Certain conditions apply with regard to how the proceeds from government business loans through the CSBFP are used. The government has a set of guidelines in place called Act and Regulations, which cover all legal aspects of the Canada Small Business Financing program. Every business owner should know what is contained within these regulations and get complete understanding from an attorney, if needed.
A few points covered in the document include:
Additionally, lenders have to get an appraisal of the asset’s market value when the loan is used to improve an asset (with certain conditions). Detailed information is available to lenders who may have questions about the program in areas in which they are unsure. Lenders can also get clarification for their central office, as well as answers to written requests from the program directly. There is also a specific lender’s section on the Canada Small Business Financing Program website.
Borrowers can apply for the Canada Small Business Financing Program at financial institutions such as banks, credit unions, and private lenders. Government business loans are very common today, so most institutions have trained professionals on hand to help with the process.
Among the steps in the application process are:
In addition to the CSBFP, there are other sources of government business loans and grants in Canada. Various departments within the government also provide contributions and subsidies in addition to loan guarantees. An online search for business funding in Canada will turn up a huge list of government business loans, advance payments programs, agricultural funding, and other sources for businesses to get the money needed to start their companies.
Many organizations offer Canadian business owners a wide variety of workshops which include everything from starting a business to getting government business loans, to keeping a business profitable in addition to funding. Some organizations facilitate groups in which small business owners can connect for resources and networking opportunities.
Government business loans have played a large part in assisting small businesses for many years. There are other business loan options available in Canada, such as crowdfunding, private sector loans, and specific funding for non-profits, farmers, and other industries. But for owners who may not qualify for loans because they own a start-up or small company, the CSBFP is well worth investigating.