BDC loan requirements, beside CSBFP's
BDC Small Business Loan, up to $100,000
| Condition | What BDC publishes |
|---|---|
| Time in business | At least 24 months. From 12 to 24 months you can still apply, but "approval timelines may be longer, additional fees may apply, and some eligibility criteria may differ" |
| Annual revenue | At least $100,000 |
| Credit and profit | Personal credit score of 600 or higher; "currently generating profits" |
| Speed | "Approval in less than 10 days", if your application is complete and on time |
| Fees | "No application or prepayment fees" |
| Repayment and security | Up to 6 months interest-only, then a 5-year amortization. A personal guarantee, with "No assets taken as collateral" |
BDC Small Business Loan, over $100,000 and up to $350,000
| Condition | What BDC publishes |
|---|---|
| Time in business | "Financial statements of the last 24 months". The same 12 to 24 month note applies |
| Annual revenue | At least $250,000 |
| Credit and profit | The same: 600 or higher, and currently generating profits |
| Speed | "Approval in less than 30 days", on the same condition |
| Fees | "Certain fees apply". The page does not list them |
| Repayment | Up to 12 months interest-only, then up to 8 years. One prepayment a year of up to 15% of the outstanding principal, after the first anniversary |
CSBFP loan, through a bank, credit union or caisse populaire
| Condition | What the government publishes |
|---|---|
| Time in business | No minimum is published: "Small businesses or start-ups operating in Canada" |
| Annual revenue | A ceiling, not a floor: $10 million or less |
| Credit and profit | No score or profit test is published. Lenders "are solely responsible for approving the loan" |
| Who can apply | Corporations, sole proprietors, partnerships and cooperatives. Farming businesses cannot |
| Fees | A 2% registration fee, which can be financed, plus the lender's usual set-up fees, which cannot |
| Security | Security on the assets financed. "Lenders have the option to take an unsecured personal guarantee" |
Which BDC rule stops you
Under 24 months in businessBDC gets slower and may cost more. CSBFP has no minimum age.
From 12 to 24 months BDC still takes the application, and its Start-up Financing of up to $150,000 is built for that window. Under 12 months, BDC's FAQ says to "reach out to one of our partners".
Not yet profitableBDC wants current profits. CSBFP has no profit test of its own.
The CSBFP lender "will review your business proposal and make a decision". The guarantee is not a pass: lenders must apply "the same care and procedures" as on a conventional loan.
Revenue under $100,000Below BDC's line for its smallest tier. CSBFP sets a ceiling, not a floor.
Mind what the money is for. Inside a CSBFP term loan, working capital and intangible assets together stop at $150,000. Most of the room is for equipment, leasehold improvements and property.
Credit score under 600BDC prints 600. CSBFP prints no score.
BDC adds that "you can increase your chances of getting a loan despite having a weak credit score". If one CSBFP lender says no, the government's advice is to "contact another financial institution since lenders have different criteria".
Industries BDC will not financeBDC's FAQ lists twelve. CSBFP excludes only farming.
Charitable, religious and fraternal organizations; unions, political, lobbying and advocacy organizations; government ownership; private schools; medical and personal care, nursing and rehabilitation centres; market speculation; residential properties; cannabis and related products or services; virtual currency and NFTs; financial services or similar activities; bars, lounges or similar establishments; and gambling operations.
BDC's own first step is its eligibility check: "Just a few questions. No credit check at this stage." Next: what each loan costs. The attestations BDC asks you to sign are in our BDC loan requirements guide.
Sources: BDC, Small Business Loan page, loan simulator and financing FAQ (bdc.ca); ISED, CSBFP program page (June 22, 2026) and FAQ (July 9, 2026). Read October 11, 2026.Which loan fits your situation?
Five real scenarios with clear, opinionated recommendations.
BDC and CSBFP serve different borrower stages and purposes. BDC suits established businesses needing working capital or growth financing quickly. CSBFP is the federal instrument for startups and asset-heavy borrowers who need more than a bank would typically approve on its own.
You opened 8 months ago and need $180,000 to buy commercial kitchen equipment
BDC's Small Business Loan asks for at least 24 months in business, and even its 12 to 24 month path starts at month 12. With 8 months of operations, you do not qualify. CSBFP, by contrast, is specifically designed for businesses like yours: 74% of CSBFP lending in 2024-25 went to startup businesses. Your bank can advance up to $500,000 for equipment under CSBFP, with the government guaranteeing 85% of net eligible losses. The equipment itself serves as security.
Recommendation: CSBFP through your bank. Bring your business plan, cash flow projections, and equipment quotes. Ask your lender to finance the 2% registration fee into the loan.
Source: ISED Canada, CSBFP Annual Report 2024-25; BDC Small Business Loan eligibility requirements, bdc.caYou have been profitable for 3 years and need $75,000 to fund a seasonal inventory build
You qualify for BDC's direct online loan. At $75,000 you are well inside the under-$100K fast-track: BDC states approval in less than 10 days with no collateral required, and its online application opens with an eligibility check ("Just a few questions. No credit check at this stage."). CSBFP technically covers working capital since the 2022 modernization, but going through your bank adds 2-6 weeks and the paperwork overhead is higher for a straightforward working capital request.
Recommendation: BDC direct online. Fast, collateral-free, and designed exactly for this scenario.
Source: BDC Small Business Loan product page, bdc.ca/en/financing/small-business-loan; BDC Annual Report fiscal 2025You want to buy your building after renting for 4 years: $650,000 commercial property
BDC's Small Business Loan does not list real estate purchases among its uses (BDC has a separate commercial real estate financing product). CSBFP covers commercial real property up to a maximum of $1 million in term loans (as part of the $1.15M total cap). Your gross annual revenues must be $10 million or less. The property's appraised value typically serves as collateral for the lender, reducing your personal guarantee exposure significantly relative to unsecured financing. CSBFP also covers leasehold improvements, letting you finance renovation costs alongside the acquisition.
Recommendation: CSBFP through your bank. This is one of the primary use cases the program was designed for.
Source: ISED Canada, CSBFP eligible loan classes documentation; GrantCompass grants.json, id: 5Your chartered bank declined both a business line of credit and a CSBFP application. You need $120,000 for equipment.
This is the scenario BDC was specifically mandated to serve. BDC's explicit purpose is to provide financing to businesses that conventional banks underserve. BDC uses its own credit assessment (not your bank's underwriting criteria) and accepts applications from businesses that other lenders have declined. In fiscal 2025, BDC served over 107,000 entrepreneurs. Additionally, try a credit union for CSBFP: credit unions often have more flexible CSBFP underwriting than chartered banks and may approve what your major bank declined.
Recommendation: Apply to BDC directly AND try a credit union for CSBFP — same week, in parallel. Two different channels, both worth pursuing.
Source: BDC mandate and Annual Report 2025; CSBFP insider guidance, GrantCompass researchYou are buying a franchise. Total startup costs including franchise fee, equipment, and leasehold improvements are $320,000.
Since the 2022 CSBFP modernization, intangible assets including franchise fees are now eligible CSBFP expenses — a change many bank loan officers are still unaware of. Equipment and leasehold improvements are also covered. This makes CSBFP unusually valuable for franchise buyers, who often have a large intangible cost (the franchise fee itself) that conventional lenders refuse to finance. BDC's Small Business Loan does not list franchise fees among its uses, and its Start-up Financing, which does list buying a franchise, needs 12 months of revenue, which you won't have as a new franchise operator.
Recommendation: CSBFP. Explicitly ask your bank to cover the franchise fee, equipment, and leasehold all under one CSBFP application. Show the bank the ISED guidance on intangible assets — they may need educating.
Source: ISED Canada, 2022 CSBFP modernization — intangible assets expansion; GrantCompass grants.json, id: 5, insiderTipDecision trees
Follow the branching logic to find your best path in under 2 minutes.
Use Tree 1 to decide based on your primary loan purpose. Use Tree 2 to decide based on business age. Use Tree 3 to determine whether to stack both programs simultaneously.
Tree 1: Which program fits your loan purpose?
Your purpose is buying commercial real estate, franchise fees, leasehold improvements, or assets larger than $350K
These are asset-based, capital-intensive categories where CSBFP holds the structural advantage.
CSBFP through your bank. Up to $1.15M covering real estate, equipment, leasehold, working capital, and intangibles.
BDC's Small Business Loan does not list real estate or franchise fees among its uses. CSBFP is the correct vehicle.
Your purpose is working capital, inventory, marketing, hiring, or other operational needs under $350K
BDC's direct online loan is faster, collateral-free, and purpose-built for these use cases — especially for businesses 24+ months old with good credit.
Tree 2: Which program fits your business stage?
Your business has been generating revenue for fewer than 24 months (under 2 years)
BDC's Small Business Loan asks for at least 24 months in business. From 12 to 24 months BDC says approval may take longer, extra fees may apply and some criteria differ; under 12 months it is not available.
CSBFP is your primary federal option. Apply through a bank or credit union with a strong business plan and cash flow projections.
74% of CSBFP lending in 2024-25 went to startups. This is not a corner case — it is the program's core purpose.
Your business has 24+ months of revenue and is profitable (or near-profitable)
You clear BDC's published time-in-business bar; approval still depends on its full review. Compare BDC's direct fast process with CSBFP through your bank, then choose based on loan purpose and size.
Tree 3: Should I use BDC and CSBFP at the same time?
You have both an asset purchase need (equipment/real estate/leasehold) AND a working capital or operational need
The two needs are distinct and eligible under different programs. No stacking rule prevents combining them.
Yes — use CSBFP for the asset purchase and BDC for working capital. Apply in parallel if you have 24+ months revenue. Apply CSBFP first if you are a startup.
CSBFP is a loan guarantee (not a grant), so it does not count toward government assistance stacking caps. BDC is a Crown corporation lender — also outside stacking restrictions.
You only need one loan for one purpose
Pick the right tool: CSBFP for assets/real estate/startups; BDC for working capital/operations/established businesses. No need to over-complicate it.
Head-to-head comparison
Seven comparison axes across the dimensions that actually affect your decision.
The most important differences: BDC is a direct lender; CSBFP is a government-backed guarantee delivered through your bank. BDC caps at $350K with no collateral; CSBFP reaches $1.15M with asset-backed security. BDC asks for at least 24 months in business (12 to 24 months on slower terms); CSBFP serves day-one startups.
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Instrument type | Direct loan — BDC is your lender | Loan guarantee — your bank is the lender; government covers up to 85% of net losses |
| Maximum loan | $350,000 | $1.15 million ($1M term loans + $150K line of credit) |
| Typical loan size | $25,000 – $150,000 | $294,067 (2024-25 average) |
| Repayment | 5-year amortization and up to 6 months interest-only (up to $100K); up to 8 years and up to 12 months interest-only (over $100K) | Set by lender; competitive amortization on assets financed |
| Annual lending volume | $11.5B total BDC financing (2025); no product cap | $1.9B (2024-25, record year); 6,409 loans |
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Business age required | At least 24 months in business; 12 to 24 months can apply on slower, possibly costlier terms | No minimum — startups eligible from day one |
| Revenue requirement | Currently generating profits; at least $100K in annual revenue (loans up to $100K) or $250K (over $100K) | Annual gross revenues of $10 million or less, with no minimum |
| Legal structure | Registered and operating in Canada; no incorporation requirement | Registered in Canada; no incorporation requirement (sole proprietors and partnerships eligible) |
| Industries served | Most industries; BDC lists 12 excluded activities, among them bars and lounges, cannabis, gambling, residential properties and financial services | All industries except farming. Not-for-profit and charitable small businesses have been eligible since 2021 |
| Credit history | Personal credit score of 600 or higher; good track record | Creditworthiness per lender's own standards — more flexible for CSBFP than unsecured lending |
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Application channel | Direct — fully online at bdc.ca/en/financing/small-business-loan | Via any participating chartered bank, credit union, or caisse populaire |
| Time to decision | Approval in less than 10 days (up to $100K); less than 30 days (over $100K, up to $350K) | 2-6 weeks from application; complex applications longer |
| What the application asks for | Light: a streamlined online form | Moderate: business plan, cash-flow projections, asset quotes |
| Key documents | 2 years financial statements, business registration, personal ID, use-of-funds description | Business plan, 2-3 year cash flow projections, financial statements, asset quotes, and proof of your own contribution where the lender asks for one |
| Application fee | None up to $100K; "certain fees apply" over $100K | 2% registration fee (financeable into the loan) + 1.25%/yr admin fee built into rate |
| Expense category | BDC Small Business Loan | CSBFP |
|---|---|---|
| Working capital / operations | Listed: pay suppliers, hire or train employees | Yes (added 2022) |
| Equipment and machinery | Not on the loan page's list; BDC's FAQ says the loan can "purchase equipment" | Yes — up to $500K |
| Inventory | Listed: buy inventory | Yes (working capital category) |
| Commercial real estate | Not listed (separate BDC loan) | Yes — up to $1M term loan |
| Leasehold improvements | Not listed | Yes — up to $500K |
| Franchise fees / intangibles | Not listed | Yes (added 2022) — patents, copyrights, franchise fees, software |
| Marketing campaigns | Listed: launch a new marketing campaign | Not named by ISED; the line of credit pays "day-to-day operating expenses of the business" |
| Energy efficiency upgrades | Listed: enhance energy efficiency | Yes (equipment category) |
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Collateral required | None — personal guarantee only | The lender must take security on the assets it finances. ISED publishes no down payment: TD and Scotiabank say they finance up to 90% of eligible costs, National Bank up to 100% (see CSBFP lenders) |
| Personal guarantee | Yes — required | A lender may take one, for up to the original amount of the loan. TD's page says its guarantee starts at 25% of the loan amount. Ask for the figure |
| Interest rate structure | Variable: base rate + spread per your credit profile. BDC does not cap the spread. | Variable cap: prime + 3% (term loans); prime + 5% (line of credit). Predictable ceiling. |
| Registration / origination fee | None up to $100K; "certain fees apply" over $100K | 2% registration fee (financeable into the loan) |
| Prepayment penalty | No prepayment fees up to $100K; over $100K, one prepayment a year of up to 15% of the outstanding principal after the first anniversary | Varies by lender |
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Who approves | BDC — uses its own credit assessment, separate from charter banks | Your participating bank or credit union — BDC and government play no role in the approval |
| Bank-declined businesses | BDC is explicitly designed for businesses banks decline. Apply here first if your bank said no. | Try a credit union — more flexible CSBFP underwriting than major chartered banks in many cases |
| Business advisor | Yes — dedicated BDC advisor + access to consulting resources | No — the lender is your bank, which provides standard commercial relationship management |
| Government website | bdc.ca/en/financing/small-business-loan | ised-isde.canada.ca/site/canada-small-business-financing-program/en |
| Dimension | BDC Small Business Loan | CSBFP |
|---|---|---|
| Loan principal — taxable? | No — loan proceeds are not taxable income | No — loan proceeds are not taxable income |
| Interest deductibility | Fully deductible as business expenses (Line 8710 of T2125) | Interest deductible as business expenses (includes the 1.25% annual admin fee built into the rate) |
| Registration fee deductibility | No registration fee. BDC says "certain fees apply" over $100K and does not list them | Deductible at 20%/year over 5 years as a financing cost (CRA rules on loan origination fees) |
| Capital Cost Allowance | Assets bought with proceeds eligible for CCA deduction | Assets bought with proceeds eligible for CCA deduction |
What each loan costs: BDC's floating base rate and the CSBFP cap
The nearest thing to a published BDC rate is its loan simulator. It shows $768 a month in interest-only payments on $100,000, "based on the average rate offered to eligible clients". By our arithmetic that is about 9.2% a year.
First-year cost, side by side
Worked example. Borrow $100,000. At a BDC quote of 9.2%, the first year's interest is $9,200. A CSBFP term loan at the 7.45% ceiling is $7,450 of interest plus the $2,000 registration fee: $9,450, the higher of the two in year one by $250. From year two the fee is gone, and CSBFP at its ceiling runs $1,750 a year under BDC on the same balance.
Replace 9.2% with the rate on your own BDC offer. BDC's side stops at $350,000, the loan's limit. This is simple interest on the opening balance for one year, without the fees nobody publishes: BDC's above $100,000 and any lender set-up fee. A CSBFP lender may charge less than its ceiling, and a fixed-rate CSBFP loan has its own: the lender's residential mortgage rate plus 3%.
Sources: BDC, Small Business Loan page and simulator (bdc.ca); ISED, CSBFP program page; Bank of Canada prime rate series V80691311, 4.45% on October 7, 2026 (each lender sets its own). Read October 11, 2026.The verdicts
Five opinionated conclusions for the most common scenarios. No hedging.
For a startup buying equipment in year one, CSBFP wins over BDC by default — not because it is better, but because BDC simply does not serve you yet.
BDC's Small Business Loan asks for at least 24 months in business, and its slower 12 to 24 month path still needs a first year behind you. Startups in year one do not qualify. CSBFP was designed for exactly this gap: 74% of 2024-25 lending went to startup businesses, with a $294K average loan. Use CSBFP now, then revisit BDC at the 24-month mark for your next working capital need.
Source: ISED Canada CSBFP Annual Report 2024-25; BDC eligibility requirementsFor a 3-year-old business needing $60,000 in working capital this quarter, BDC wins on speed and simplicity.
BDC's fully online application for under $100K can deliver approval in less than 10 days with no collateral and no application or prepayment fees. CSBFP would take 2-6 weeks through your bank and requires a more detailed business plan and asset documentation. When the purpose is working capital and you qualify for BDC, there is no reason to take the longer route.
Source: BDC Small Business Loan product details, bdc.caFor any loan above $350,000, CSBFP is your only federal option. It is not a competition.
BDC Small Business Loan caps at $350,000 with no exceptions. CSBFP reaches $1.15 million ($1M term loans + $150K line of credit). For commercial real estate, major equipment buys, or multi-category startup packages exceeding $350K, CSBFP is the only federal instrument in play. Note: BDC has separate commercial real estate and growth financing products for amounts above this threshold — but those are different programs from the Small Business Loan reviewed here.
Source: BDC Small Business Loan maximum ($350K), bdc.ca; ISED Canada CSBFP program overviewFor franchise buyers, CSBFP's 2022 intangible assets expansion is a hidden advantage most business owners do not know exists.
Since the 2022 CSBFP modernization, franchise fees, patents, copyrights, and other intangible assets are now eligible CSBFP expenses. This is significant because franchise fees are often the largest single startup cost and are refused by conventional lenders. BDC's Small Business Loan does not list franchise fees or other intangible assets among its uses. CSBFP can finance the franchise fee, equipment, AND leasehold in a single application — ask your bank to confirm they know about the intangibles expansion before approaching them.
Source: ISED Canada, 2022 CSBFP modernization Act amendments; GrantCompass research, id: 5If your chartered bank declined you, BDC is not a last resort — it is an entirely different lender with an explicit mandate to serve the businesses banks turn away.
BDC served over 107,000 entrepreneurs in fiscal 2025 with its own credit assessment that is structurally more flexible than chartered bank underwriting. BDC's mandate from Parliament is to complement (not compete with) conventional lenders — meaning it is designed to approve what others decline. Additionally, if your major bank declined CSBFP, try a credit union: they apply the same CSBFP guarantee structure but often use more flexible underwriting criteria for small loans and newer businesses.
Source: BDC Act mandate; BDC Annual Report 2025 (107K entrepreneurs); GrantCompass grants.json insiderTip, id: 328BDC small business loan reviewed: advantages and disadvantages, from its published terms
| The term | Why it helps | The catch |
|---|---|---|
| No collateral | "We only ask for a personal guarantee", with no assets pledged. | The guarantee is yours personally if the business cannot pay. |
| Speed and fees up to $100,000 | "Approval in less than 10 days" and "no application or prepayment fees". | Above $100,000: "less than 30 days", and "certain fees apply" that the page does not list. |
| The rate | Set for your file: BDC's base rate plus a variance. | No published ceiling: see what each loan costs. BDC's own FAQ takes the question "Why choose BDC if other lenders offer lower rates?" |
| Interest-only start | Up to 6 months up to $100,000, and up to 12 months above it. | Interest runs on the full balance in those months. |
| Payments that shrink | BDC loans are "non-blended": the same principal each month, with interest on a falling balance. | The first full payments are the largest: $2,435 a month from month 7 on $100,000 over 5 years in BDC's simulator, and $27,275 of interest over the term. |
| 24-month bar | An established business faces a short published list. | From 12 to 24 months BDC warns of longer timelines and possible extra fees. Under 12 months, this is not your loan. |
Context before you apply
Important nuance that affects your decision.
Both programs are continuously open with no intake windows, no competitive selection, and no deadlines. You can apply at any time. The question is not whether to apply now — it is which program to approach first.
CSBFP is a loan guarantee, not a grant. This distinction matters for stacking. Because CSBFP is not a government grant, the outstanding loan balance does not count toward government assistance stacking caps. You can simultaneously hold a CSBFP loan, a BDC loan, an IRAP grant, and a provincial grant — none of these overlap on funding limits. This is meaningfully different from grant programs, which typically share a 75% stacking ceiling. If you are pursuing multiple sources of funding, CSBFP's guarantee structure is one of the most stack-friendly instruments available. A different kind of middle ground is the forgivable loan: advanced like a loan, but cancelled in whole or in part when you hit written investment or job-creation targets. Source: GrantCompass grants.json stackingNotes, id: 5; ISED Canada CSBFP program rules
The 2% CSBFP registration fee is financeable — and most borrowers do not know this. The 2% registration fee on a $300,000 CSBFP loan is $6,000. Paying it out of pocket at closing drains cash at exactly the wrong moment for a startup. Ask your bank explicitly to finance the registration fee into the principal at the time of closing. The fee is then repaid over the life of the loan with the same interest rate as the principal. This is permitted under CSBFP rules and many bank loan officers forget to raise it. The same applies to the 1.25% annual administration fee — it is built into the interest rate, not charged separately. Source: GrantCompass grants.json insiderTip, id: 5; ISED Canada CSBFP fee structure
BDC's personal guarantee has no collateral behind it — but it is still a real liability. BDC Small Business Loan requires a personal guarantee but explicitly requires no collateral. This is unusual among lenders and is one of BDC's most attractive features for business owners who do not want to pledge personal assets. However, the personal guarantee means if the business defaults, BDC can pursue you personally for the outstanding balance. The "no collateral" feature reduces complexity and closing friction; it does not reduce your personal financial exposure in a default scenario. Know the difference before signing. Source: BDC Small Business Loan terms, bdc.ca; evaluationCriteriaSummary, GrantCompass grants.json id: 328
CSBFP's 2022 modernization expanded the program significantly — and many lenders have not caught up. The 2022 amendments added working capital, intellectual property, intangible assets, and franchise fees as CSBFP-eligible expenses. Before 2022, the program was primarily for real estate and equipment. These additions make CSBFP useful for a much wider range of businesses than most lenders — or even some bank loan officers — realize. If your bank tells you "that expense is not eligible for CSBFP," ask them to verify against the current ISED eligibility rules. Contact ISED directly at [email protected] or 1-866-959-1699 if you receive conflicting guidance from your lender. Source: ISED Canada, 2022 CSBFP modernization; GrantCompass grants.json insiderTip id: 5; ISED contact information
Does BDC lend for equipment, a building, buying a business, or a line of credit?
Pick what you are paying for. All five BDC loans named here were listed as open when we read our catalogue on October 11, 2026.
New equipment
| Route | What it covers | The bar |
|---|---|---|
| BDC Equipment Loan | Up to 125% of the price of new or used equipment, up to 12 years to repay, interest-only for up to 24 months. | 12 months of revenue. |
| CSBFP term loan | New or used equipment. Equipment and leasehold improvements together can take up to $500,000. | The lender decides, with security on the equipment. |
A building
| Route | What it covers | The bar |
|---|---|---|
| BDC Commercial Real Estate Loan | Buying, building or renovating commercial property. Typically from $100,000, up to 100% of the project cost, up to 25 years. | Typically 24 months of revenue. The property is usually the collateral. |
| CSBFP term loan | Land or buildings used for commercial purposes, up to the full $1,000,000 term-loan limit. | The lender decides, with security on the property. |
Buying a business, or opening a second location
| Route | What it covers | The bar |
|---|---|---|
| BDC Business Purchase or Transfer Loan | The purchase, plus legal fees and other one-time costs. No fixed amount is published. | A negotiated agreement first: agreed price, letter of offer, closing date. |
| CSBFP term loan | "The purchase of eligible assets of an existing business", at the lesser of cost and appraised value. | Assets only: no "share purchases". |
For a second location, the renovation of a leased space and the equipment in it fall in CSBFP's $500,000 class.
Working capital or a line of credit
| Route | What it covers | The bar |
|---|---|---|
| BDC Working Capital Loan | A term loan, not a line of credit, for inventory, suppliers, marketing and hiring. Amount set case by case; up to 8 years to repay. | 12 months of revenue. |
| CSBFP line of credit | Up to $150,000 for "day-to-day operating expenses", capped at the lender's prime rate plus 5%. | The program's FAQ says "only some financial institutions" offer it so far. |
A business under 24 months
| Route | What it covers | The bar |
|---|---|---|
| BDC Start-up Financing | Up to $150,000 for start-up fees, assets, marketing or buying a franchise. Interest-only for up to 12 months. | Revenue for between 12 and 24 months. |
| CSBFP term loan or line of credit | Every loan class, including "costs to buy a franchise". | No minimum time in business is published. |
What's Changed in 2026
- CSBFP record-breaking year (2024-25) — The Canada Small Business Financing Program facilitated 6,409 loans totaling $1.9 billion in 2024-25 — the largest year in program history. Average loan size rose 5.3% to $294,067. The accommodation and food services sector accounted for 47.8% of lending volume ($900.9 million), followed by retail trade at 15%. This reflects both economic demand and deliberate ISED program promotion efforts.
- BDC Pivot to Grow initiative: In response to ongoing tariff disruptions, BDC launched the Pivot to Grow initiative on March 7, 2025 (its ceiling rose to $5 million in 2026), targeting manufacturers and exporters impacted by Canadian-U.S. trade tensions. While BDC's core Small Business Loan product (covered here) is unchanged, Pivot to Grow represents additional targeted financing capacity for tariff-affected businesses. If your business has been directly impacted by tariffs, ask BDC about this program alongside the standard Small Business Loan.
- Bank of Canada rate environment: The Bank of Canada made multiple rate cuts through 2024-2025, lowering the policy rate substantially from its 2023 peak. Because BDC's rate floats on its own base rate and the CSBFP ceiling is tied to the lender's prime rate, existing borrowers and new applicants benefit directly from rate reductions. CSBFP's cap at prime + 3% (term loans) has become more attractive as prime itself fell. Check current prime rate before comparing total cost of borrowing.
- CSBFP 2022 modernization still under-utilized — The 2022 expansion of CSBFP (adding working capital, intangibles, and franchise fees) continues to be under-deployed. ISED's own program monitoring data shows that awareness of the new eligible categories remains low among both borrowers and bank loan officers. In 2026, it is worth explicitly naming all four new categories when approaching a lender: working capital costs, intellectual property, franchise fees, and startup costs.
- BDC served record 107,000+ entrepreneurs in fiscal 2025 — BDC's total new financing reached $11.5 billion in fiscal 2025 and the institution made 18,333 small loans. This scale signals continued strong access to BDC financing for qualifying businesses, with no indication of volume restrictions on the Small Business Loan product.
- No incorporation requirement confirmed for either program — A persistent misconception is that BDC and CSBFP require incorporation. Neither program does. Sole proprietors and partnerships in Canada can access both programs (CSBFP since its founding; BDC confirmed). Note: only 3% of active small-business loan programs in GrantCompass's catalog of 33 programs require incorporation — incorporation requirements are the exception, not the rule, in Canadian small business lending.
BDC alternatives: where to go if BDC is not a fit
Under 12 months and a bank said noFirst ask which loan the bank declined. A CSBFP request can go to a second lender this week.
If the bank declined one of its own loans, go back and "ask about the CSBFP" by name. If it declined a CSBFP request, the government's advice is to "contact another financial institution since lenders have different criteria". Then mark month 12. That is when BDC's Start-up Financing and the slower path into its Small Business Loan both open. Founders aged 18 to 39 have Futurpreneur, in the next row.
Under 24 months in businessCSBFP through a bank or credit union, or Futurpreneur if you are 18 to 39
The Futurpreneur Startup Program offers a loan of up to $75,000, part of it from BDC, with up to two years of mentorship. Our Futurpreneur and BDC comparison sets the two side by side. BDC's own loan for businesses with 12 to 24 months of revenue is under "A business under 24 months" above.
You farmNot CSBFP, which excludes farming. Use the Canadian Agricultural Loans Act program.
The Canadian Agricultural Loans Act program guarantees the lender 95% of a net loss on loans of up to $500,000 per farm operation. More routes are on our farm financing page.
Outside the big citiesYour regional lender: Community Futures, a SADC or a CBDC
BDC names these three networks as its own partners for "entrepreneurs in rural and remote communities across Canada". In our catalogue: Community Futures in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, the SADC and CAE network in Quebec, and the CBDCs in Atlantic Canada. Each office sets its own terms.
BDC's FAQ says a declined application "doesn't affect your ability to apply again in the future". What to fix first is in the "If BDC declines you" part of our BDC guide.
Sources: ISED, CSBFP pages and FAQ; BDC financing FAQ and partners page (bdc.ca); futurpreneur.ca; Agriculture and Agri-Food Canada; status from our public catalogue records. Read October 11, 2026.Lenders and funders treat sole proprietors and corporations differently. Compare a sole proprietorship and a corporation, including the funding programmes only a corporation can apply for.
Frequently asked questions
Common questions about BDC vs CSBFP.
Sources
- Business Development Bank of Canada. BDC Small Business Loan — product overview, eligibility, and application. — bdc.ca/en/financing/small-business-loan
- Innovation, Science and Economic Development Canada. Canada Small Business Financing Program — program overview. — ised-isde.canada.ca/site/canada-small-business-financing-program/en
- ISED Canada. CSBFP Annual Report 2024-25: 6,409 loans, $1.9B total, 74% to startups, $294K average. — ised-isde.canada.ca CSBFP annual statistics
- Business Development Bank of Canada. BDC Annual Report Fiscal 2025: $11.5B new financing, 107,345 entrepreneurs served, 18,333 small loans. — bdc.ca/en/about/publications/annual-report
- ISED Canada. Canada Small Business Financing Act, as amended 2022 — expanded eligible loan classes (working capital, intellectual property, intangible assets, startup costs). — laws-lois.justice.gc.ca Canada Small Business Financing Act
- GrantCompass catalog. BDC Small Business Loan data (id: 328) and Canada Small Business Financing Program (id: 5) — verified March 29, 2026. — grantcompass.ca/grants/bdc-small-business-loan
- GrantCompass catalog statistics. bvc.json provenance (2026-05-01): 33 active small-business loan programs, median max funding $350,000, 3% require incorporation. — grantcompass.ca/grants/canada-small-business-financing-program
- Business Development Bank of Canada. Small business loan simulator and Financing FAQs. Read October 11, 2026. bdc.ca: loan simulator, bdc.ca: financing FAQ
- ISED Canada. Helping small businesses get loans (dated June 22, 2026). Bank of Canada. Prime rate, series V80691311: 4.45% on October 7, 2026. Read October 11, 2026. ised-isde.canada.ca: CSBFP loans, bankofcanada.ca: prime rate