Amongst the updates announced in the Economic Action Plan 2015 was an improvement to the Canadian Small Business Financing Act (CSBFA), a popular small business loan to extend cash flows and support growth. As a quick overview, CSBFA was created to help businesses in establishing, expanding, modernizing, and improving their systems and targets. Businesses can apply for this program directly through their financial institution and the federal government will reimburse up to 85% of the lender’s losses in the event of a default.
What Does the Canadian Small Business Financing Act Cover?
For businesses looking to expand or overhaul their businesses, CSBFA can be used towards the purchase of land and buildings used for commercial purposes, renovations to premises occupied by the business as a tenant, and new or used equipment purchases and improvements.
What Has Changed with this Small Business Loan?
In 2015, changes were introduced to CSBFA to improve this Canadian government funding program’s reach and coverage. Previously, businesses needed to have less than $5 million in gross annual revenues; this has been expanded to all Canadian businesses that have less than $10 million in gross annual revenues. And, the program has doubled its maximum financing amount from $500,000 to $1 million in Canadian government loans per business. These changes will allow more businesses to expand their cash flow and implement more significant growth initiatives within their organization. All of the changes have been brought in to support additional Canadian small businesses.
How to Apply for Canadian Small Business Funding via CSBFA
If your business is incorporated in Canada and has less than $10 million in gross annual revenues, you will need to create and present a business plan to a chartered bank, credit union, or caisse populaire who is ultimately responsible for the approval of your small business loan.
To find a lender near you and apply for CSBFA, use Industry Canada’s Financing Lender’s Page.
Other Canadian Government Funding for Small Business in the Automotive Sector
Although automotive parts manufacturers based in Canada can apply for CSBFA, other options may be a more suitable option depending on their growth goals. The Canadian Automotive Sector is experiencing a shift in its global market share, as developing countries take advantage of their relatively low wage rates. Thus, the government has launched a number of Canadian government funding programs to spur innovation and efficiency improvements amongst Canadian automotive suppliers, such as the Automotive Supplier Innovation Program (ASIP), which provides up to $10 million in grant funding towards R&D activities, the Automotive Innovation Fund (AIF) for large-scale innovative product development projects, and Ontario’s Jobs and Prosperity Fund that has given funding to reputable automotive suppliers to create jobs, including Linamar’s $50.25 million grant win.