Although the Canadian government has a lot of business, they tend to focus on small businesses. After all, these afloat aids help you save money and save time. Here is some information about Canada’s Small Business Financing Program.
Who IS Eligible?
Just about everyone in Canada who has a startup or small business generating less than $ 10 million per year in income can qualify for the CSBFP. This is your business or a sole proprietorship. You can use the funds to purchase land or buildings, to purchase equipment, to pay for business registration fees, and even to renovate the property. In some cases, you can use the funds to purchase an existing business.
Who is NOT Eligible?
Anyone running an existing business in Canada generates more than $ 10 million per year in income from the CSBFP. The program is also available to the farming industry; the Canadian government has other programs in place for farm-based loans and subsidies. You can not use the funds provided by the CSBFP to fund the company, goodwill, inventory, or working capital. This is not a complete list; if you have questions about how these funds can be used, please speak with your financial institution.
What Are the Loan Criteria?
There are several criteria in place for dispersing and utilizing the CSBFP. Some of these criteria include:
There is a maximum loan amount of $ 1 million. No more than $ 350,000 of that $ 1 million can be used for purchasing equipment or leaseholder improvements.
There is a registration fee that totals 2% of the total value of the loan. However, you can pay that registration fees along with the loan.
The interest rate varies. If it is fixed, the rate is equal to the lender’s single-family mortgage rate plus 3%. If it is variable, the rate is equal to the lender’s premium lending rate plus 3%.
Lenders reserve the right to charge the same fees that they would charge for the same amount. You must pay these fees to the lender, and you can not finance the charges as part of the CSBFP.
Where to Apply for the Loan
In order to apply for the CSBFP, you can visit your bank, credit union, or private lender. You will be required to present your business proposal to that lender, and the decision regarding the loan is up to the lender. This is because you will receive funds directly from the lender rather than the Canadian government if you are approved; the government simply secures the loans on behalf of the lender to help mitigate the risks. Not all banks and credit unions participate, but the majority of them do.
The CSBFP is a great way to help you get your business financing. Thousands of thousands of Canadian companies qualify for the program, and if you are denied based on your credit, there are still other options out there for you to explore.