4 programs and financial resources supporting small businesses in Canada

If you are planning to start a business, acquire an existing one, or expand your enterprise in Canada, capital costs are typically a factor that needs to be calculated right from the start.

In addition to using their own capital, businesses can explore various programs and financial institutions that support business financing in Canada. These include programs backed by the Canadian government through risk-sharing arrangements with lenders, as well as organizations that directly provide business loans.

Here are four options worth exploring.

1. Canada Small Business Financing Program (CSBFP)

The Canada Small Business Financing Program (CSBFP) is a Government of Canada program designed to help small businesses and start-ups access financing more easily.

It is important to understand that the government does not provide funds directly to businesses. Loans are issued through financial institutions such as banks, credit unions, or *caisses populaires*. The government shares a portion of the risk with the lender, thereby enabling small businesses to access financing. The decision to approve a loan remains with the financial institution.

What is the maximum amount a business can borrow?

According to current information, a borrower can access a maximum total of CAD 1.15 million, comprising:

• Up to CAD 1 million in the form of a term loan.
• Up to CAD 150,000 in the form of a line of credit.

Businesses with annual gross revenue not exceeding CAD 10 million may be eligible for the program, with the exception of farming businesses.

What can the loan be used for?

The CSBFP can support various business investment and operational needs, such as:

• Purchase or improve commercial property.
• Purchase new or used machinery and equipment.
• Leasehold improvements—that is, the costs of repairing and renovating leased premises.
• Some intangible assets.
• Some working capital costs.
• Restaurant equipment, production equipment, computers, software, and certain franchise-related costs.

For example, if you wish to open a nail salon, hair salon, or restaurant, the financing can be used for purposes that comply with program regulations, such as premises renovation, equipment purchases, or certain working capital expenses.

Note: CAD 1.15 million is the program's maximum limit; this does not mean every business will be approved for this amount by the bank. The actual loan amount depends on the business's profile, capital requirements, and the lender's decision.

2. Business Development Bank of Canada (BDC)

The Business Development Bank of Canada, commonly known as BDC, is a Canadian Crown corporation that specializes in providing financing and support services to businesses.

Unlike the CSBFP, BDC offers a variety of financing products tailored to the specific needs of businesses.

BDC currently offers loans ranging from approximately CAD 10,000 to several million CAD, depending on the loan type, project scale, and the business's eligibility. Purposes may include:

• Expand the business.
• Purchase or renovate commercial real estate.
• Purchase equipment.
• Investing in technology.
• Working capital và cash flow.
• Buying or transferring a business.

What do BDCs consider?

Approval depends on more than just a credit score. BDC evaluates the business's overall financial situation and growth potential, including:

• Revenue and profitability.
• Cash flow.
• Credit history.
• The financial situation of the business.
• Business plan và financial projections.
• Loan repayment capacity.
• Purpose of fund usage.

Therefore, a BDC may be particularly worth considering for businesses that are already operational and generating revenue but require additional capital to expand, purchase equipment, acquire commercial property, or undertake a growth project.

3. Futurpreneur Canada – dành cho doanh nhân trẻ

If you are between the ages of 18 and 39 and looking to start or buy a business, Futurpreneur Canada is a financing resource worth exploring.

The Core Startup Program now offers startup loans of up to CAD 75,000, including financing from BDC subject to applicable conditions. Participants also have access to one-on-one mentorship for up to two years, along with startup support resources.

Some key conditions include:

• Between 18 and 39 years of age at the time of application submission.
• Must be a Canadian citizen or permanent resident.
• It is possible to demonstrate relevant training or experience in the intended field of business.
• Have a business plan that meets the program's requirements.

A notable feature of Futurpreneur is that the program does not focus solely on capital; mentorship and business support resources are also key components.

4. Women Entrepreneurship Loan Fund

The Women Entrepreneurship Loan Fund is an initiative under the Government of Canada's Women Entrepreneurship Strategy, designed to help women entrepreneurs access the capital needed to start and grow their businesses.

The program offers loans of up to CAD 50,000, specifically targeting women entrepreneurs, sole proprietorships, and certain groups that may face greater challenges in accessing traditional financing.

It is important to note that the Government does not directly process all loan applications. The loans are administered through selected delivery organizations.

In Ontario, there are organizations offering programs in the northern and southern regions of the province—including WEOC (PARO), Nventure, and NACCA—depending on the specific region and applicable conditions.

Which program should I look into?

There is no single program that suits every business. The choice of financing depends on the intended use of funds, the business's operational status, revenue, credit history, repayment capacity, and project scale.

You can visualize it simply:

Demand	You can explore potential financing sources.
Start or expand a small business	CSBFP
Purchase equipment and renovate the premises.	CSBFP, BDC
Expanding an existing revenue-generating business	BDC
Buy a business	BDC and CSBFP, depending on the purpose and conditions.
Entrepreneurs aged 18–39 looking to start or buy a business	Futurpreneur
A female entrepreneur needs a small loan to start or grow a business.	Women Entrepreneurship Loan Fund

It is important to note that this is a loan, not a grant. It is repayable capital, and meeting the program's eligibility criteria does not guarantee approval of the application.

If you are preparing to launch, purchase, or expand a business in Canada, you should determine in advance the required capital amount, the intended use of funds, the business's current revenue status, and your repayment capacity. Having this information will help you identify the most suitable financing option and prepare your application more effectively.