Canadian governments don’t usually lend to businesses directly. Instead, most programs work by sharing risk with lenders, which makes it easier for a bank or credit union to say yes.
The Canada Small Business Financing Program
The best-known program is the Canada Small Business Financing Program. You apply through a participating lender, which makes the loan. The federal government guarantees part of it, so the lender takes on less risk.
| What to know | |
|---|---|
| Who applies | Small businesses below a revenue threshold |
| Where you apply | Banks and credit unions that take part |
| Common uses | Equipment, leasehold improvements, real property, some working capital |
| Fees | A registration fee and an administration fee apply |
Limits, eligible uses and fees change from time to time, so confirm the current details with a participating lender.
Other sources of support
The Business Development Bank of Canada (BDC) is a federal Crown corporation that lends directly to businesses, often alongside banks. Provinces, regional development agencies and organizations focused on specific groups, such as women entrepreneurs, Indigenous businesses and newcomers, also offer loans and programs.
Is it the right route?
Government-backed loans can open doors for younger businesses or those without much security. The trade-off is paperwork and rules on how the money is used. A financing partner can tell you whether a government-backed option or a conventional loan will get you to a better result.
