Unlocking Growth for Canadian Entrepreneurs: A Deep Dive into the Canada Small Business Financing Program (CSBFP)

Every small business hits a point where growth takes more than just determination, but decent funding. Whether you’re looking to expand your operations, buy equipment, or renovate a space, having reliable funding can help you move forward. In Canada, the Canada Small Business Financing Program (CSBFP) is one of the government’s key initiatives to help small businesses access capital through participating lenders.

This guide explores how the program works, how banks like TD and RBC use it, and how alternative banking solutions can help you make the most of your funding when dealing with international payments.

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Canada Small Business Financing Program Overview: Key Features & Eligibility

The Canada Small Business Financing (CSBFP) is a federal initiative administered by Innovation, Science and Economic Development Canada (ISED). Rather than lending money directly, the government shares the risk with lenders by guaranteeing up to 85% of eligible loan amounts, reducing risk for lenders and making it easier for small businesses to secure credit.¹

Since its inception, the program has helped more than 53,000 businesses secure over $11 billion in CSBFP loans across Canada.²

To qualify, businesses must be:

• For-profit and operating within Canada
• Earning $10 million or less in annual gross revenue
• Engaged in commercial activities (charities, religious institutions, and most farming businesses are ineligible)²

While the program reduces risk for lenders, it doesn’t eliminate normal credit requirements. Banks still assess your business plan, financial history, and repayment capacity. However, the federal guarantee often improves your chance of approval and can lead to better interest rates.

What You Can Use the Funds For

The CSBFP focuses on long-term business investments that support growth—not short-term expenses like payroll or inventory.

Eligible Uses	Examples
Land or buildings	Purchase commercial property or expand existing facilities
Leasehold improvement	Renovate or customize a rented business location
Equipment purchases	Buy new or used machinery, vehicles, or technology essential to your business
Intangible assets	Acquire certain software or digital tools necessary for operations

By focusing on tangible and lasting investments, the CSBFP helps entrepreneurs build stronger, more sustainable businesses.

How Much You Can Borrow

Through the Canadian Small Business Financing Program, eligible businesses can borrow up to $1 million in total. Within that limit:

• Up to $500,000 can be used for equipment and leasehold improvements
• Up to $150,000 can be used as a line of credit²

The Government of Canada guarantees 85% of the loan, with the lender covering the remaining 15%. Repayment terms usually stretch up to 10 years, though property loans may extend longer.³

Interest rates are set by lenders but must stay within government guidelines, ensuring rates remain competitive.

Fees, Rates, and Terms

CSBFP loans carry either fixed or variable interest rates, typically close to prime-based business lending. Borrowers pay a 2% registration fee, which can be added to the loan.⁴

Banks may also charge application fees and documentation fees for CSBFP-backed loans. These vary between lenders but are generally lower than unsecured commercial loans.

Loan Type	Max Amount	Repayment Term
Property or Equipment	$1 million	Up to 10 years
Leasehold Improvements	$500,000	Up to 7 years

Early repayment is often allowed, though some lenders may charge minor penalties for doing so.

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Wise Business Could Help Your Company Save on Global Payments

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How Major Banks Use the CSBFP: TD & RBC as Case Studies

Canada’s largest banks actively participate in the CSBFP, integrating it into their broader lending portfolios. Here’s how two of the most common options—TD Canada Trust and RBC Royal Bank—approach the program.

TD Canada Trust

TD offers both term loans and lines of credit under the CSBFP. Businesses can borrow up to $1 million to purchase land, buildings, or equipment and up to $150,000 for a line of credit.⁵

TD’s CSBFP line of credit is renewable annually and can later be converted to a term loan. The government guarantee helps TD lend to businesses that might not meet typical collateral requirements, giving small business owners more flexibility to fund projects without disrupting cash flow.

RBC Royal Bank

RBC’s Canada Small Business Financing Loan (CSBFL) also allows borrowing up to $1 million for tangible assets like real estate, equipment, or leasehold improvements, with repayment terms of up to 15 years depending on the asset.³

RBC relies on the government guarantee to offer competitive interest rates and expanded access to credit. As one of the most active lenders in the program, RBC positions the CSBFL as a practical solution for entrepreneurs investing in long-term growth.

Both banks apply their own credit assessments but rely on the CSBFP framework to provide enhanced access and competitive interest rates.

How Your Business Can Make the Most of CSBFP—Step by Step

Navigating the Canada Small Business Financing Program (CSBFP) can seem complex, but with a clear plan, it’s easier than you think. Here’s how to make the most of it:

1. Identify Your Funding Needs

CSBFP loans can be used for:

• Buying or improving commercial property
• Purchasing new or used equipment
• Renovating leased spaces

Knowing exactly what you’re financing helps you apply for the right amount.

2. Check Eligibility

Your business must:

• Operate in Canada
• Earn less than $10 million annually
• Be for-profit (non-profits and farms don’t qualify)²

Prepare a solid business plan showing how the funds will support growth.

3. Apply Through a Participating Lender

You can’t apply directly through the government. Instead, approach a participating lender such as TD Canada Trust, RBC, BMO, CIBC, or National Bank of Canada. Each has its own lending process and interest options.

4. Know the Loan Details

• Borrow up to $1 million for equipment or property
• Up to $500,000 for leasehold improvements
• Pay a 2% registration fee (can be included in the loan)⁴

5. Use and Manage Funds Wisely

Use funds only for approved purposes and track your repayments carefully. To pay international suppliers or contractors, you can pair CSBFP financing with Wise Business, which lets you send global payments at the real mid-market exchange rate—saving time and avoiding the pain of hidden fees.

Why Wise Business Should Be Part of Your Financing Strategy

Securing financing through the CSBFP helps you grow, but how you manage and move that money matters just as much. Many Canadian small businesses now operate internationally, sourcing equipment, paying overseas contractors, or managing cross-border supply chains. Wise Business can become an essential complement to your funding strategy.

Wise Business complements CSBFP funding by making international payments fast, transparent, and affordable. Combining CSBFP financing with Wise Business makes every dollar go further, allowing you to invest more in your business and less in bank fees.

Save Time and Money On Overseas Payments With Wise Business

Wise Business can help you save big time on international payments. Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in currencies.

Use Wise Business >>

Some key features of Wise Business include:

• Mid-market rate: Get the mid-market exchange rate with no hidden fees on international transfers
• Global Account: Send money to countries and hold multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local
• Business Debit Card: Invite your employees to order a debit card for free, and pre-set their spending limit. Add them to your Business account with controlled access and track their spending in one place.
• Global Account: Send money to countries and hold multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local
• Auto-conversions: Don't like the current currency exchange rate? Set your desired rate, and Wise sends the transfer the moment the rate is met
• Free invoicing tool: Generate and send professional invoices
• No minimum balance requirements or monthly fees: Canada based businesses can open an account for free. Learn more about fees here

Final Thoughts

The Canada Small Business Financing Program (CSBFP) remains one of the most valuable funding resources available to Canadian entrepreneurs. Sharing lending risk between banks and the federal government opens doors for small businesses that might otherwise struggle to secure affordable financing.

Major lenders like TD and RBC make it simple to apply, offering flexible terms and reliable support. Once your funding is in place, Wise Business helps ensure your money works harder, especially when managing global transactions.

Together, programs like the CSBFP and innovative tools like Wise empower Canadian small businesses to grow confidently, expand internationally, and manage their finances with full transparency.

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Sources:

1. The Best Sources of Small Business Grants & Loans in Ontario | Greenbox Capital
2. Helping small businesses get loans | Government of Canada
3. Canada Small Business Financing Loan | RBC
4. Canada Small Business Financing Program Brochure | Government of Canada
5. Small Business Financing Line of Credit | TD