Canada Small Business Financing Program 2026: CSBFP Guide

By Grantsights12 min readUpdated Oct 29, 202611 official sourcesHow we checkCorrections

Quick Answer: The Canada Small Business Financing Program (CSBFP) isn't a grant. It's a bank loan that the federal government partly guarantees: if you default, ISED pays your lender 85% of its net loss, which makes lenders more willing to lend to start-ups and riskier firms.

Full answer and how we checked it

You can borrow up to $1.15 million ($1 million in term loans plus a $150,000 line of credit), pay a 2% registration fee, and the interest rate is capped at prime plus 3% for floating-rate term loans. You apply at a bank, credit union or caisse populaire. In Grantsights analysis of ISED's CSBFP open data, lenders made 6,079 CSBFP loans worth $1.77 billion in 2025-26, and 74% went to businesses less than a year old.

This guide is for: owners of small businesses and start-ups in Canada who've heard of the "CSBFP" or a "government-backed loan" and want to know what it really is, what it costs, and whether it's the right way to finance a fit-out, equipment or a property purchase.

Data note: Grantsights checked the loan limits, fees, rate caps and eligibility rules below against ISED's CSBFP pages and the Canada Small Business Financing Act (opens in a new tab) and Regulations on October 29, 2026. The Act page says it's current to September 30, 2026 and was last amended on July 4, 2022, so the 2022 limits still apply. The lending tables are Grantsights analysis of the CSBFP open data on the Government of Canada portal (opens in a new tab) (files last updated July 20, 2026, downloaded October 29, 2026). They cover fiscal years ending March 31, from 1999-2000 to 2025-26. ISED doesn't publish who borrowed: the data is counts and dollar totals by province, sector, loan size and business age. ISED's own 2024-25 highlights page reports 6,409 loans and 758 claims for that year, while the later open data file shows 6,486 loans and 723 claims; lenders have up to 6 months to register a loan, so totals keep moving after year-end. We use the newer open data file for every year.

Grantsights' own tools cover US funding only. What we cover outside the US

In this guide (10 sections)

Canada Small Business Financing Program by the Numbers
What a CSBFP Loan Can Pay For, and the Limits
What It Costs: Fees and Interest Rate Caps
What the CSBFP Pages Don't Tell You
Who Qualifies, and Who Shouldn't Bother
Where CSBFP Loans Go: Province, Sector and Size
How to Apply for a CSBFP Loan, Step by Step
CSBFP Compared With Grants and Other Federal Options
Where to Go Next
Sources Checked

Before you read on: Grantsights' own grant finder and reports cover United States funding only, and there's no Grantsights tool for Canadian loans. Everything on this page comes from ISED's rules, the federal legislation and the program's published lending figures. If you'd like a Canadian version for your business, add your name to the Canada list.

Canada Small Business Financing Program by the Numbers

Lenders registered 6,079 CSBFP loans worth $1.77 billion in fiscal 2025-26, according to Grantsights analysis of ISED's open data. That's down 6% in number and 5% in value from the record 2024-25 year, which ISED's highlights page called the largest value in program history. The more striking change is on the loss side: claims paid to lenders jumped from 723 to 1,250.

Fiscal year	Loans	Value of loans	Average loan	Claims paid	Value of claims
2019-20	5,746	$1.30 billion	$226,300	691	$53.6 million
2020-21	3,739	$875.1 million	$234,100	898	$87.0 million
2021-22	5,075	$1.23 billion	$243,000	798	$76.9 million
2022-23	5,591	$1.49 billion	$266,400	655	$65.4 million
2023-24	6,239	$1.74 billion	$279,400	699	$74.0 million
2024-25	6,486	$1.87 billion	$288,700	723	$75.3 million
2025-26	6,079	$1.77 billion	$291,500	1,250	$130.1 million

Source: Grantsights analysis of 7 fiscal years (2019-20 to 2025-26) in ISED's CSBFP open data file "Summary of Financial Activities per fiscal year." Loans include lines of credit from 2022-23.

Since 1999-2000 the program has registered 214,158 loans worth $30.5 billion and paid 29,433 claims worth $1.83 billion, so about 6 cents of every dollar lent has come back to lenders as a government claim payment. ISED's own pamphlet page puts the last 10 years at over 53,000 loans totalling more than $11 billion.

What a CSBFP Loan Can Pay For, and the Limits

The maximum is $1.15 million per borrower, and related borrowers share that cap, according to ISED's Helping small businesses get loans (opens in a new tab) page. The 2022 amendments created the current structure, raising the ceiling from $1 million and adding a line of credit and a working capital class.

Product	Maximum	What it pays for	Maximum government coverage term
Term loan (all classes combined)	$1,000,000	Real property, leasehold improvements, equipment, intangible assets, working capital	15 years
Of which: leasehold improvements and equipment	$500,000	Renovating leased premises; new or used equipment, including commercial vehicles and software	15 years
Of which: intangible assets and working capital	$150,000	Franchise fees, goodwill, licences, inventory, payroll, rent, websites, professional fees	15 years
Line of credit	$150,000 (on top of the term loans)	Day-to-day working capital	5 years, renewable

Sources: ISED, Helping small businesses get loans, and ISED's July 2022 bulletin on CSBFP changes.

Real property is the one class that can use the whole $1 million. The regulations also say at least 50% of a financed building's area must be used by your business, or be used within 90 days after the final disbursement. A term loan can cover expenditures or commitments made up to 365 days before the lender approves it, which helps if you've already paid a deposit on equipment.

What the CSBFP won't finance, according to ISED's CSBFP FAQ for small businesses (opens in a new tab): share purchases and assets a holding company acquires. Buying an existing business works only as a purchase of its eligible assets, financed at the lower of the price and the appraised value.

What It Costs: Fees and Interest Rate Caps

A CSBFP loan costs a one-time 2% registration fee plus interest, and the interest is capped by regulation. According to ISED, the borrower pays the registration fee to the lender and it can be financed as part of the loan.

Cost	Term loan	Line of credit
Registration fee	2% of the amount lent	2% of the authorized amount, charged again on renewal or increase
Maximum floating interest rate	Lender's prime rate + 3%	Lender's prime rate + 5%
Maximum fixed interest rate	Lender's single-family residential mortgage rate for the term + 3%	Not applicable
Annual administration fee	1.25% of the balance, paid by the lender to ISED	1.25%, paid by the lender to ISED
Lender's own fees	Same set-up and renewal fees as a conventional loan; can't be financed	Same

Sources: ISED CSBFP FAQ and July 2022 bulletin; Canada Small Business Financing Regulations.

Here's how the fee works on a typical loan. For example, a small restaurant opening in Calgary that borrows $300,000 for a leasehold fit-out pays a $6,000 registration fee, which it can add to the loan. The 1.25% annual administration fee isn't billed to the borrower; the Act says the lender can recover it only through the interest rate. In practice that means lenders tend to price CSBFP loans at or near the cap.

What the CSBFP Pages Don't Tell You

The program pages describe the rules. The regulations, the evaluation and the open data show five things every borrower should know before signing.

1. Your personal guarantee can cover the whole loan. Many third-party guides say a CSBFP personal guarantee is limited to 25% of the loan. That's out of date. Section 19 of the Canada Small Business Financing Regulations (opens in a new tab) caps an unsecured personal guarantee at 25% only for loans made before April 1, 2014; for later loans the cap is the original amount of the loan, plus interest on any judgment and legal costs. The government's 85% coverage protects the lender, not you. If the business fails, the lender realizes on the collateral and can then call your guarantee.

2. The guarantee doesn't make approval automatic. ISED is explicit that lenders make every credit decision using their normal criteria. Lenders also face a portfolio cap: for each five-year lending period, the Act limits what ISED pays each lender to 90% of the first $250,000 it lends, 50% of the next $250,000, and 12% of everything above $500,000. ISED's June 2024 evaluation describes that as roughly 12% of a lender's portfolio. A bank that's already near its cap has less reason to say yes.

3. Most borrowers don't know they have one. The evaluation found only 34% of CSBFP borrowers in 2023 were aware of the program by name. Lenders often fold it into a regular business loan offer. If a bank offers you a start-up loan for a fit-out, ask directly whether it's a CSBFP loan, because that changes the fee, the rate cap and the guarantee terms. The same evaluation found 76% of CSBFP borrowers likely couldn't have got financing without the program, up from 69% in 2018.

4. Losses are rising fast. Claims paid rose 73% in one year, from $75.3 million in 2024-25 to $130.1 million in 2025-26, and the program's expenses exceeded its $109.6 million in fee revenue by $20.5 million, according to Grantsights analysis of ISED's open data. ISED's 2024-25 highlights page blamed rising claims on elevated interest rates and the post-pandemic lending surge. A program running at a loss doesn't change your eligibility, but we'd expect lenders to look harder at restaurant start-ups, which made up 655 of the 1,250 claims.

5. The line of credit is still a niche product. Lenders made 542 CSBFP lines of credit in 2025-26 averaging $64,700, about 9% of all CSBFP loans. ISED's FAQ admits only some financial institutions offer it. If you need working capital, check first whether your lender has it in place; if not, the $150,000 working capital allowance inside a term loan is the more common route.

Who Qualifies, and Who Shouldn't Bother

The CSBFP is for businesses with estimated gross annual revenue of $10 million or less in the year the loan is approved, according to the Act's definition of small business. A business that's about to start qualifies if its first full year isn't expected to exceed $10 million. That includes:

Start-ups and existing businesses. Start-ups dominate: businesses operating less than a year took 4,528 loans worth $1.35 billion in 2025-26, 76% of the value.
For-profit, not-for-profit and charitable businesses, according to ISED's FAQ, as long as they're a business carried on in Canada.
Corporations, sole proprietors, partnerships and cooperatives. In practice it's almost all corporations: 5,957 of 6,079 loans in 2025-26. Sole proprietors took just 97.

Who should look elsewhere:

Farms. Farming is excluded by the Act. The Canadian Agricultural Loans Act program (opens in a new tab) is the farm equivalent.
Businesses looking for free money. Every dollar is repaid with interest. If you need non-repayable funding, start with our guide to small business grants in Canada, which separates the few real grants from loans and tax credits.
Owners who can't risk personal assets. Because a guarantee can reach the full loan amount, the CSBFP isn't a way to keep personal assets out of the deal.
Businesses with strong credit and collateral. A conventional loan may come with a lower rate and no 2% fee. Compare both offers.

Where CSBFP Loans Go: Province, Sector and Size

Ontario businesses took 2,692 CSBFP loans worth $827.5 million in 2025-26, 47% of the national value, according to Grantsights analysis of ISED's open data. Quebec was the only large province where lending grew, from 880 loans to 989. A case in point at the other end of the scale: Prince Edward Island had just 10 CSBFP loans in 2025-26, but they averaged $341,400, the highest of any province.

Province or territory (2025-26)	Loans	Value	Average loan	Claims paid
Ontario	2,692	$827.5 million	$307,400	704
Alberta	1,327	$357.7 million	$269,600	189
Quebec	989	$288.0 million	$291,200	216
British Columbia	585	$172.5 million	$294,800	59
Saskatchewan	169	$38.7 million	$228,800	27
Manitoba	113	$30.3 million	$268,000	43
New Brunswick	81	$23.4 million	$289,500	5
Nova Scotia	76	$20.4 million	$268,700	7
Newfoundland and Labrador	34	$9.2 million	$269,700	0
Prince Edward Island	10	$3.4 million	$341,400	0
Yukon	3	$1.0 million	$334,500	0
Northwest Territories and Nunavut	0	$0	n/a	0

Grantsights analysis of ISED's CSBFP open data, "Loans and Claims by Province and Territory," fiscal 2025-26.

Restaurants and retailers dominate. Accommodation and food services took 2,635 loans worth $824.6 million in 2025-26, 47% of the value, followed by retail trade (934 loans, $262.1 million), other services (773 loans, $212.8 million) and arts, entertainment and recreation (374 loans, $125.6 million). Health care and social assistance took 260 loans worth $78.2 million.

Breakdown (2025-26)	Loans	Value	Share of value
Leasehold improvements	3,433	$1.13 billion	63.9%
Equipment	1,350	$333.1 million	18.8%
Real property	579	$249.0 million	14.1%
Working capital	542	$35.1 million	2.0%
Intangible assets	175	$21.7 million	1.2%
Loans of $250,000 or less	2,730	$354.7 million	20.0%
Loans of $250,001 to $500,000	3,135	$1.26 billion	70.9%
Loans over $500,000	214	$161.3 million	9.1%

Grantsights analysis of ISED's CSBFP open data, asset type and size of loan tables, fiscal 2025-26.

The size table says something useful: just 214 loans went over $500,000, and almost all of those would be real property, since leasehold and equipment loans stop at $500,000. The typical CSBFP borrower is a new restaurant, shop or clinic financing a $250,000 to $500,000 fit-out of leased space.

How to Apply for a CSBFP Loan, Step by Step

There's no government application form. According to ISED's FAQ, you present your business proposal to the financial institution of your choice, and the lender alone decides. Here's the realistic sequence:

Find a participating lender. Most banks, credit unions and caisses populaires take part. ISED's finance map (opens in a new tab) lists lenders near you. Say "Canada Small Business Financing Program" by name when you call.
Prepare the file a lender expects. A business plan, financial projections, quotes or invoices for the assets, a lease (for leasehold improvements) or purchase agreement (for real property), and personal financial information for anyone giving a guarantee.
Get the credit decision. The lender applies its normal underwriting. ISED doesn't publish a decision timeline; it depends on the lender.
Sign, pay the fee and draw the funds. The lender takes security in the assets financed (real property and equipment) or a general security agreement over business assets (leasehold improvements, intangibles, working capital and lines of credit).
The lender registers the loan. The lender has 6 months from the first disbursement to register the loan with ISED. You don't deal with ISED at all.

A common mistake is assuming a refusal from one bank ends your CSBFP options. ISED's FAQ says lending criteria differ by institution and suggests trying another lender. If you think a lender is treating you unfairly on an existing CSBFP loan, ISED points to the lender's own complaint process and then the Ombudsman for Banking Services and Investments.

CSBFP Compared With Grants and Other Federal Options

The CSBFP sits alongside several other federal tools, and the honest comparison is that it's the most widely used route for fit-outs and equipment, not the cheapest money available.

Option	What it is	Typical size	Repaid?
CSBFP	Bank loan with 85% federal loss-sharing	Up to $1.15 million; 2025-26 average $291,500	Yes, with interest and a 2% fee
BDC (opens in a new tab)	Federal Crown corporation lender	Varies	Yes
Black Entrepreneurship Loan Fund	Loans for Black business owners through FACE and BDC	$10,000 to $250,000	Yes
Futurpreneur	Start-up loans with mentoring for young founders	Up to $75,000	Yes
Regional development agencies	Mostly interest-free repayable contributions	Varies by agency	Usually yes
NRC IRAP	Funding for technology projects	Varies	Usually no

Sources: ISED, BDC, and the Grantsights guides linked below.

Black business owners should also read our guide to the Black Entrepreneurship Program, whose loan fund can sit alongside or instead of a CSBFP loan. Founders aged 18 to 39 should compare our Futurpreneur and startup funding guide. Technology firms will usually do better with NRC IRAP funding and the SR&ED tax credit, which don't have to be repaid. For provincial programs, see our guides to small business grants in Ontario, Alberta and British Columbia.

Where to Go Next

If you're opening or expanding a restaurant, shop, clinic or service business and need $100,000 to $1 million for a fit-out, equipment or a building, the CSBFP is worth asking every lender about by name. Get two offers if you can, compare the rate against prime plus 3%, and read the guarantee clause carefully, because it can cover the full loan. If what you really need is money you don't repay, start with our guide to small business grants in Canada.

Sources Checked

All pages read and files downloaded on October 29, 2026.

Frequently Asked Questions

Is the Canada Small Business Financing Program a grant?

No. The CSBFP is a loan-loss-sharing program. A bank, credit union or caisse populaire lends you its own money, registers the loan with Innovation, Science and Economic Development Canada (ISED), and if the loan defaults the government pays the lender 85% of its net eligible loss. You repay the full loan with interest, plus a 2% registration fee. Nothing is forgiven.

How much can I borrow under the CSBFP?

Up to $1.15 million per borrower, including related borrowers. That's a maximum of $1 million in term loans plus $150,000 in lines of credit. Within the $1 million, no more than $500,000 can go to leasehold improvements and equipment, and of that, no more than $150,000 to intangible assets and working capital. Real property can use the full $1 million.

What interest rate does a CSBFP loan charge?

Your lender sets the rate, but the regulations cap it. A floating-rate term loan can't exceed the lender's prime rate plus 3%. A fixed-rate term loan can't exceed the lender's single-family residential mortgage rate for that term plus 3%. A CSBFP line of credit can't exceed prime plus 5%. On top of interest you pay a one-time 2% registration fee, which can be financed.

Who is eligible for a CSBFP loan?

Start-ups and existing businesses operating in Canada with gross annual revenue of $10 million or less, including for-profit, not-for-profit and charitable small businesses. They can be corporations, sole proprietors, partnerships or cooperatives. Farming businesses aren't eligible; Agriculture and Agri-Food Canada runs the Canadian Agricultural Loans Act program for them instead.

How do I apply for a CSBFP loan?

You apply at a participating bank, credit union or caisse populaire, not with the government. ISED says it doesn't accept or process loan applications and isn't involved in the lender's decision. Ask your lender's business banking officer specifically about the CSBFP, bring a business plan, financial projections and quotes for what you're buying, and expect the lender to apply its normal credit criteria.

Does the CSBFP require a personal guarantee?

Lenders may take an unsecured personal guarantee, and for loans made after March 31, 2014 the regulations let that guarantee cover up to the original amount of the loan, plus interest and legal costs. Older guides that say the guarantee is capped at 25% describe loans made before April 1, 2014. Lenders must also take security in the assets financed or in the business's assets.

Last updated October 29, 2026. Published by Grantsights from public sources. See our editorial policy, how we build and check guides, corrections and how we make money.