CSBFP registration fee

A buyer using the federal CSBFP to fund a purchase should ask the lender how this fee is handled. Section 11 of the Canada Small Business Financing Act requires every lender to pay it at the time a loan is submitted for registration, in an amount calculated in accordance with the regulations. The Act adds that the lender may charge it to the borrower.

How it is limited

Section 10 of the Act makes every loan subject to a condition that no fee or charge is payable by the borrower other than those it lists, and the registration fee is one of them. The Canada Small Business Financing Regulations set the fee’s calculation in section 4. ISED’s guidelines say that if the registration fee is financed, the maximum loan amounts include it. The annual administration fee is a separate fee under section 12 of the Act, which the lender may not charge the borrower otherwise than through interest on the loan.

What to ask

• Does the lender intend to charge the fee to the borrower, and is it shown separately?
• Is the fee being financed in the loan, and does that reduce the room left under the program’s limits?
• Does the fee change if the loan is renewed or increased?