Canada Small Business Financing program: few know it exists

The Canada Small Business Financing program put $957 million into 7,400 startups and small businesses last year, but it also lost $113 million from companies that defaulted on their loans, according to a Globe and Mail story.

The CSBF program encourages banks to lend up to $500,000 to small business by providing a government guarantee to cover 85 per cent of losses if things go wrong.

Loans can cover 90 per cent of costs to buy or improve land or property, buy leasehold imrpovement or improve leased property, and buy or improve equipment.

The Globe story reports that one of the problems with the program is not enough small business owners know the program exists.

Industry Canada said in a 2009 report that even though the CSFB program is not recovering costs through administration and registration fees, if additional income taxes generated by small businesses who used the program are factored in, the program more than breaks even.

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