How much can I borrow under the CSBFP to buy a small business?

The Canada Small Business Financing Program does not lend you money itself. It shares a lender’s risk on a loan to a small business, and its guidelines set the most that can be financed under it. This page explains how those limits are built rather than quoting them, because ISED sets them and has changed them before; the guidelines record changes taking effect on July 4, 2022. Confirm the current figures in the guidelines or with a lender.

The limits come in layers

The guidelines cap a borrower’s outstanding term loans together with those of its related borrowers. Inside that overall cap sits a lower one for everything except buying or improving real property the borrower owns or will own, and inside that sits a smaller one for intangible assets and working capital costs. Lines of credit have their own separate maximum, which is additional to the term-loan cap.

Where a business purchase lands

For an acquisition, the question is which layer each part of the price falls into. Equipment and leasehold improvements sit in the middle layer, while the guidelines list goodwill, if part of a going concern purchase, among intangible assets, so goodwill competes for the smallest layer along with working capital. The program applies to a purchase of all or substantially all of the assets of a going concern, not to buying shares. BDC says it offers extra financing for intellectual property, goodwill and client lists. See also whether the CSBFP covers buying a business.

What shrinks the amount

Other program loans held by the borrower or its related borrowers count against the caps, and a financed registration fee counts toward the maximum. The amount a vendor finances is not eligible for a program loan. The eligible cost must be supported by proof of purchase and payment, and lenders are expected to apply the same due diligence they would to a conventional loan of that size. The caps are therefore a ceiling, not an entitlement.