How do I apply for CSBFP funding to buy a business?

The Canada Small Business Financing Program is not a loan from the government. It shares risk with lenders, so you apply through a financial institution or other lender that offers it, and the program’s own page tells small businesses to ask their financial institution about it. What follows describes the process in general terms, because each lender runs its own forms and timelines.

Start with a lender that offers it

ISED’s program page points you to a list of lenders and says most financial institutions now offer the enhanced features. Ask early whether the lender will consider your purchase under the program, because the lender, not ISED, reviews the application and makes the approval decision. The guidelines expect the same due diligence as for a conventional loan, plus a risk assessment of your ability to repay and credit checks on the borrower or its principals.

What the lender checks about the purchase

A purchase qualifies when you buy all or substantially all of the assets of a going concern, meaning a business that was operating recently. A purchase of shares does not qualify, because the loan would go to a shareholder rather than the business. The lender keeps evidence of cost, such as the purchase and sale agreement and invoices, and an appraisal is part of the file for going concern purchases and for sales between related parties.

Security, guarantees and fees

Expect the lender to take security over the assets and possibly a personal or corporate guarantee; the guidelines describe both. A registration fee applies, and the guidelines allow all or part of it to be financed within the program’s limits. Fees and limits change, so ask the lender for the current figures before you build a funding plan.

Timing and alternatives

Speak to the lender before you pay deposits or sign binding commitments. The guidelines let a lender count some costs paid before approval, but only within a set look-back period, so early spending can fall outside the loan. If the program does not fit, BDC lends directly and says it can review a request once the main terms of the purchase are negotiated.