Great news for Canadian entrepreneurs!  The Government CSBF Program will now finance small businesses up to $1MM!

This loan is available to most industries for both new and existing businesses. So, if you’re looking to open a new business, renovate your existing one, or even purchase or refinance the commercial property that your company is operating from, this loan is definitely looking into. 

The best part is, the loan is guaranteed by the Federal Government, so shareholders only personally guarantee 25% of the loan, meaning that if the business goes under—God forbid—the shareholders are only personally obligated to pay back 25% of it!

The short answer is, it depends on what you need the loan for and which bank you go to.

If you’re not purchasing or refinancing a property, you can get up to $500k for furniture and equipment (like kitchen appliances, machinery, etc.), leasehold improvements (construction), technology, intangible assets, and working capital.  Of the $500k, a maximum of $150k can be used toward intangible assets and working capital. 

If you’re purchasing a building or refinancing the existing property that your business is / will be operated from, the loan will fund up to $1MM. Included in this amount can be up to $500k for furniture and equipment, leasehold improvements, technology, etc. 

There are a few ways to slice this pie, but the maximum borrowing amount is $1MM.

In addition, you could get a small business credit card and a business overdraft.

That said, the loan amount really depends on the bank you go to. Every bank has a different ‘appetite’ for each industry, meaning that you could apply to all the major banks for the exact same government loan and they’ll each offer you a different amount. Drop us a line if you’d like to know which bank will give your business the maximum amount.

No worries!  Purchases made within the past 365 days prior to the date of the loan approval are eligible for financing.

As with all loans, there are conditions, terms, and eligibility criteria, so we’ll summarize some of the important bits:

•   Shareholder credit scores must be 650 or higher. 
•   Shareholders must have a combined net worth of 25% of the loan amount. This requirement is near impossible to meet unless one of the shareholders is a homeowner, or they have a few hundred thousand in savings and investments. 
•   Shareholders must have combined savings or liquid investments of 10% – 25% of the loan amount. 
•   For existing businesses, the annual gross revenue must be less than $10M and their financial statements must cover the debt-service ratio.
•   For property financing, the business must occupy at least 50% of the premises (investment properties aren’t eligible).
•   The business must either own, lease, or have a Letter of Intent to lease the commercial property it’s operating from. 
•   Home-based businesses aren’t eligible…unless they have a Letter of Intent to lease a commercial space.
•   Interest rate is Prime + 3%.
•   The term is up to 15 years, although some banks will extend to 25 years for the real property portion. 
•   You can choose the repayment option that works best for you: from fixed, floating, and blended payment terms.

Unfortunately, even if you scour through the government webpages about the CSBF loan, and study all the eligibility criteria listed, you still won’t be able to determine whether you’re qualified. Why?  

It’s not a conspiracy—it’s just the way the system is set up. Simply put, the Government has one set of criteria listed on their website which they provide to the banks who actually fund all Government loans. Contrary to popular belief, Government loans are not funded by the Bank of Canada—regular banks do. The banks then add their OWN criteria to the list, most of which they never publish…and the criteria differs from bank to bank. 

For example, you’ll never see it listed that banks require the shareholders to have a net worth of 25% of the loan, or that their credit scores need to be 650 or higher.  You’ll never see the percentage of liquid capital that owners need to have, nor will it outline what the DSR (debt-service ratio) needs to be on the financial projections or statements that need to be submitted. 

This is where we come in. PFG Financial can pre-qualify you for free…and it only takes a 15 – 30 minute phone call. After doing this for over 15 years, we know exactly what the banks require. In fact, many of our staff used to be bankers and underwriters who would approve these loans. If we determine that you’re qualified, should you want us to help guide you through the process, we’ll put you in touch with a banker we trust and ensure you have the highest chance of approval. 

Reach out today! If you’re not qualified for this particular loan, there may be other options, and we’ll gladly point you in the right direction. 

OR . . . 

CLICK THIS TO SEE WHAT YOU QUALIFY FOR IN 2 MINUTES!