Yes. A business loan broker can prepare your application for a Canada Small Business Financing loan, choose a participating lender that fits your file and manage the process through to funding. The lender, a bank, credit union or caisse populaire, makes the credit decision and registers the loan with the federal government. The program itself is run by Innovation, Science and Economic Development Canada.
The program is one of the most useful tools a Canadian small business has, and one that many owners never hear about from their branch. That is where a broker who knows it well earns their keep.
How the program works
The Canada Small Business Financing Program shares risk with lenders. When a registered loan defaults, ISED's 2024-25 overview says the government pays the lender 85% of its net eligible loss after the lender has realized on collateral. That guarantee lets lenders approve start-ups, first expansions and asset-light businesses they might otherwise decline.
The scale is meaningful. ISED reports 6,409 loans worth close to $1.9 billion in fiscal 2024-25, the largest value in the program's history, with an average loan of $294,067. In the same year the program paid 758 claims totalling $80.4 million.
Who qualifies
According to ISED, the program serves for-profit and not-for-profit small businesses and start-ups operating in Canada with gross annual revenue of $10 million or less. Every industry is eligible except farming, which ISED directs to the Canadian Agricultural Loans Act Program.
How much you can borrow
ISED sets these limits per borrower:
| Category | Maximum |
|---|---|
| Total program financing | $1.15 million |
| Term loans | $1,000,000 |
| Of which, anything other than real property | $500,000 |
| Of which, intangible assets and working capital | $150,000 |
| Line of credit | $150,000 |
Eligible uses are real property, new or used equipment, leasehold improvements, intangible assets such as software and franchise fees, and working capital. RBC notes that purchases made within 365 days before approval may be eligible to finance.
What it costs
The program caps the price lenders can charge. ISED sets these maximum rates:
- Floating rate term loans: the lender's prime rate plus 3%
- Fixed rate term loans: the lender's single family residential mortgage rate for the term plus 3%
- Lines of credit: prime plus 5%
On top of the rate:
- Registration fee. A one-time fee of 2% of the amount loaned, or of the amount authorized on a line of credit. ISED says the borrower pays it to the lender and it can be financed.
- Administration fee. RBC states a 1.25% administration fee is included as part of the interest rate on its program loans.
- Lender fees. Lenders charge their own application and documentation fees. RBC lists a $100 application fee and a $175 document preparation fee.
RBC also offers amortization of up to 15 years across asset classes. Terms vary by lender, which is one reason a broker who compares several participating lenders adds value.
Security and guarantees
ISED says lenders take security on the assets financed for real property and equipment, and security on any business assets for leasehold improvements, software, intangible assets, working capital and lines of credit. Lenders may also take an unsecured personal guarantee.
What a broker adds
The program is delivered by lenders, and not every branch is keen on it. A broker with program experience helps in three ways.
Choosing the lender. ISED says the enhanced program features are now offered by most financial institutions, but appetite varies widely between banks, credit unions and caisses populaires, and between branches of the same bank. A broker knows which lenders are actively writing program loans for your industry and province.
Packaging the file. A program application needs a clear business plan, quotes or invoices for the assets, projections and owner financials. A broker assembles these so the lender sees a complete file the first time. Our guide to the documents a business loan broker will ask for lists the usual set.
Structuring the request. The sub-limits matter. A broker can split a request between program financing and a conventional loan, or pair a program term loan with a program line of credit, so you use the full $1.15 million where it fits.
How brokers are paid on program loans
The program's rules set the fees a lender may charge you. A broker's compensation sits outside the program, so agree it in writing before the work starts. Some brokers are paid by the lender, and some charge the business a packaging or advisory fee because program files take more work than a typical online loan.
Either way, ask for the amount in dollars, when it is due and what happens if no lender approves the loan. An established broker charges when you are funded, not before any lender has looked at the file. Our guide on how business loan brokers get paid explains the common models.
How to get started
- Check eligibility. Confirm your gross annual revenue is $10 million or less and that the purpose is an eligible use.
- Price the assets. Gather quotes for equipment, leasehold work or the property.
- Choose your route. Go to your own bank, use ISED's lender map, or work with a broker who compares several participating lenders.
- Compare offers. Look at the rate, the amortization, the security requested and the lender's own fees, not just the program fee.
Program brokers on the register
The register lists Canadian business loan brokers by loan type and province. Search the register for Canada Small Business Financing loans, or browse by province, starting with Ontario, British Columbia, Alberta and Quebec. Every entry carries a register number and last checked date, and verified entries show fees in writing. Read our overview of business loan brokers in Canada for the wider market.
Questions owners ask
How much can I borrow under the program?
Up to $1.15 million in total: up to $1 million in term loans and up to $150,000 as a line of credit. Within the term loan, no more than $500,000 can go to uses other than real property, and no more than $150,000 to intangible assets and working capital.
Does the government lend me the money?
No. A bank, credit union or caisse populaire lends the money and makes the credit decision. The government registers the loan and pays the lender 85% of its net eligible loss if the loan defaults.
What does the program cost?
A one-time registration fee of 2% of the loan, which can be financed, and a 1.25% administration fee that lenders such as RBC build into the interest rate. Rates are capped by the program.
Who is not eligible?
Businesses with gross annual revenue over $10 million, and farming businesses, which are served by the Canadian Agricultural Loans Act Program instead.