What is CSBFP?
CSBFP is a federal government sponsored program, which is administered by Industry Canada to make it simpler for small business owners to obtain funds from financial institutions to improve, renovate, or get their businesses started. CSBFP, which recently celebrated its 50th anniversary, is a loss-sharing initiative between the federal government and the private sector lenders. This implies that if by any circumstance the borrower is incapable of repaying the loan’s principle or interest, the federal government will offer a guarantee to the financial institution and cover a particular percentage of the amount owed by the borrower. However, to avoid such cases, financial institutions are careful when administering and granting these loans and must ensure that they meet all the requirements of the CSBFP Act as well as exercise their due diligence in conducting credit investigation of the borrower, ability to repay the loan, and the viability of the proposed business. The program, which gives access to loan financing of up to one million dollars, is offered in all Canadian provinces and territories via a network of financial institutions that consist of credit unions, caisses populaires, and chartered banks.
Who is Eligible for CSBFP Loans?
What are the Maximum Loan Amounts?
Before the announcement of the new CSBFP eligibility guidelines, only a maximum of $500,000 could be borrowed. Currently, the new CSBFP guidelines allow borrowing of up to $1 million for small business owners of which only $350,000 can be used for leased business improvements or for purchasing new equipment.
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