Capital Leasing Pilot Project

Program criteria

Eligibility criteria for small business

For-profit enterprises carried on or about to be carried on in Canada, with annual gross revenues of $5 000 000 or less. Excluded are agricultural businesses and charitable or religious organizations.

Eligibility of capital leases

Capital leases may finance:

1. new equipment; or
2. used equipment that has a remaining economic life greater than the term of the lease.

On the registration form, the lessor is required to certify the fair market value of any used equipment.

Maximum amount

A maximum of $250 000 applies to:

• cost of the equipment;
• total financing amount of the capital lease; and
• aggregate outstanding balance (including all outstanding CSBFP loans and capital leases).

Financing rate

100 percent of cost of equipment, defined as the purchase price of equipment plus additional costs necessary for its operation, excluding maintenance and training costs.

Lease terms

Maximum 10 years

Loss-sharing ratio

• 85 percent government
• 15 percent lessor

Registration fee

2 percent applied to the cost of equipment financed

Maximum imputed rate of interest

Government of Canada bond rate plus 13.25 percent.

Personal guarantee

Maximum of 25 percent of the total financing amount of the lease