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Chapter 2
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Contact one of the
lending institutions
mentioned or contact:

Small Business Loans
Administration
Tel.: (613) 954-5540
Fax: (613) 952-0290

Web site:
http://strategis.gc
.ca/CSBFA
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Canada Small Business Financing Act | Business Development Bank of Canada | Federal Economic Development Initiative in Northern Ontario: Financing | Atlantic Canada Opportunities Agency: Financing | Canada Economic Development for Quebec Regions: Financing | Western Economic Diversification Canada: Financing | Community Futures Development Corporations | Canada Community Investment Plan | $ources of Financing | Agriculture Financing: Farm Credit Corporation | Financing Assistance for Canadian Cultural Organizations | Aboriginal Business Canada | Community Economic Development Program | Opportunity Fund | Resource Acquisition Initiative | Federal-Provincial-Territorial Regional Partnerships Program | Commercial Development Program | Resource Access Negotiations Program | First Nations and Inuit Youth Business Program
Financing
Canada Small Business Financing Act
Need a term loan under reasonable conditions to finance the purchase or improvement of fixed assets? Under the Canada Small Business Financing Act (CSBFA) you may be able to get a term loan directly from an authorized lending institution.

The loans are available to small businesses operating for profit in Canada—excluding farming, charitable and religious enterprises—that have annual gross revenues of less than $5 000 000. At the discretion of the lender, the loans can be used to finance up to 90 percent of the cost of the purchase and improvement of three categories of fixed assets:
  • the purchase or improvement of real property or immovables;


  • the purchase of leasehold improvements or improvements to leased property; and


  • the purchase or improvement of new or used equipment.
Loans cannot be used to acquire shares or provide working capital.

The maximum total amount of loans a borrower may have outstanding under the CSBFA, including SBLA loans, cannot exceed $250 000. The program also provides for the sharing of loan losses, if any, on a 15 percent to 85 percent basis between the lenders and the federal government. Borrowers must pay the federal government a one-time, up-front loan registration fee of 2 percent of the amount of each loan. This amount may be added to the loan.

The maximum rate of interest charged by the lending institution cannot exceed the prime rate plus 3 percent for floating-rate loans, and the residential mortgage rate plus 3 percent for fixed-rate loans. This rate includes an annual administration fee of 1.25 percent that is paid by the lender to the Crown, in support of its effort to minimize the cost of the program. The maximum period over which a loan may be repaid is 10 years.

All chartered banks and Alberta Treasury branches, most credit unions and caisses populaires, and many trust, loan and insurance corporations in Canada are authorized to make loans under this program.


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Author: Industry Portfolio Office
Date of Publication: 2001-04-04		   Important notices and disclaimers
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