Overview and Highlights 2024-25

Overview

The Canada Small Business Financing Program (CSBFP) is a program that facilitates access to financing to small businesses to start-up, expand and modernize. The CSBFP partners with private sector lenders to provide financing that would not otherwise be available or would only be available under less favourable conditions. Canadian small businesses with gross annual revenues of up to $10 million can receive term loans and lines of credit to finance their business needs, including real property, equipment, leasehold improvements, intangible assets (e.g., copyrights, patents, trademarks) and working capital (e.g., start-up costs, inventory). The program is open to both for-profit and not-for-profit businesses in all industries except farming. Borrowers may finance up to $1.15 million, which includes a maximum of $1 million for term loans and $150,000 for lines of credit. The CSBFP is a national program that operates through a network of financial institutions in all provinces and territories.

The role of the federal government

Innovation, Science and Economic Development (ISED) Canada is responsible for the design and administration of the CSBFP. It reviews and evaluates the legislative and regulatory frameworks and recommends improvements on a periodic basis. It also administers the program by registering loans, collecting fees and paying lenders eligible portions of losses on defaulted loans. ISED, however, is not involved in the disbursement and administration of the loans.

The role of lenders

Private sector lenders are responsible for making all credit decisions, approving and disbursing the loans, registering the loans with the CSBFP and administering the loans. Each lender has its own lending criteria subject to the requirements of the CSBFP. Once the loan is approved, the borrower receives the funds from the lender, not the government. If a loan is in default, the lender must realize on assets taken as collateral before submitting the claim for loss to the CSBFP. Once the lender's information is reviewed and the claim is approved, the lender is paid 85 percent of the net eligible loss.

Highlights

Following the tabling of the 2019-2024 Comprehensive Review Report, which included a program evaluation and feedback from lender and borrower stakeholders, the program is exploring potential areas to expand accessibility to financing. ISED officials continue to monitor the changing economic environment and evolving needs of small businesses to identify opportunities to better support them during new challenges such as U.S. imposed tariffs.

Here are some of the highlights from 2024-25.

Lending continues to increase

• 6,409 loans were made to Canadian small businesses valued at close to $1.9 billion, the largest value in CSBFP history;
• Compared to the previous year, the number of loans increased by 169 loans (2.7 percent), and the value of loans increased by $141.7 million (8.1 percent);
• The average loan size was $294,067, which represents an increase of 5.3 percent from 2023–24;
• Fee revenues were $103.2 million, which represents an increase of $4.4 million (4.5 percent) relative to the previous year.

New financing product – line of credit

• In 2022 regulatory and legislative amendments were implemented to introduce a new Line of credit financing product of up to $150, 000 for working capital;
• Given that some time was required for financial institutions to internally operationalize the new financing product internally before offering it to small businesses, we are now starting to see more substantial uptake;
• In 2024-25, 373 lines of credit were made to Canadian small businesses valued at close to $27.2 million;
• Compared to the previous year, the number of lines of credit increased by 94 (33.7 percent), and the value increased by $6.3 million (29.9 percent);
• Moving forward, lending and claim data by financing type will be included in the annual open data tables starting at the end of fiscal year 2025-26.

Start-ups and new businesses received the largest share of financing

• Start-ups and businesses operating less than one year continued to receive the majority of loans, which accounted for $1.4 billion (74.1 percent).

Leasehold improvements and equipment were the most common assets financed

• Leasehold improvement and equipment loans represented $1.2 billion (64.6 percent) and $350.9 million (18.6 percent) respectively;
• Real property loans accounted for $264.1 million (14.0 percent);
• Working capital and intangible asset loans represented $51.5 million (2.7 percent).

Lending was accessible in every province and territory

Three provinces – Ontario, Alberta, and Quebec – represented the majority of CSBFP lending in 2024-25, accounting for 5,167 loans (80.6 percent) and $1.54 billion in value (82.0 percent).

Figure 1 below shows lending across all Canadian provinces and territories during 2024-25. The breakdown by regions from highest to lowest volumes is as follows:

• Ontario: 2,957 loans (46.1 percent) totaling $922.3 million (48.9 percent).
• Western Canada: 2,354 loans (36.7 percent) totaling $656.4 million (34.8 percent):
  • Alberta: 1,340 loans (20.1 percent) totaling $383.7 million (20.4 percent);
  • British Columbia: 647 loans (10.1 percent) totaling 186.9 million (9.9 percent);
  • Saskatchewan: 238 loans (3.7 percent) totaling $53.6 million (2.8 percent);
  • Manitoba: 129 loans (2.0 percent) totaling $32.2 million (1.7 percent).
• Quebec: 870 loans (13.6 percent) totaling $239.7 million (12.7 percent).
• Atlantic Canada: 224 loans (3.5 percent) totaling $64.5 million (3.4 percent):
  • New Brunswick: 102 loans (1.6 percent) totaling $30.7 million (1.6 percent);
  • Nova Scotia: 88 loans (1.4 percent) totaling $25.4 million (1.6 percent);
  • Newfoundland and Labrador: 18 loans (0.3 percent) totaling $4.3 million (0.2 percent);
  • Prince Edward Island: 16 loans (0.3 percent) totaling $4.0 million (0.2 percent).
• Territories: 4 loans (0.1 percent) totaling $1.8 million (0.1 percent):
  • Yukon: 1 loan (0.02 percent) totaling $391 thousand (0.02 percent);
  • Northwest Territories: 3 loans (0.05 percent) totaling 1.4 million (0.07 percent);
  • Nunavut: 0 loans.

Figure 1: Number & Value of CSBFP Loans by Province and Territory, 2024-25

The CSBFP is open to all industry sectors (except farming) with the majority going to businesses in the accommodation & food services and retail trade sectors

• In 2024-25, accommodation and food services was the largest industry sector using the CSBFP at $900.9 million, representing 47.8 percent of the total value of loans made, followed by;
• The retail trade sector at $282.3 million, accounting for 15.0 percent of the total value of loans, followed by;
• The arts, entertainment & recreation sector at $103.3 million, and the health care and social assistance sector at $73.9 million, representing 5.5 percent and 3.9 percent of the total value of loans made respectively.

Claims increased slightly

• The CSBFP paid a total of 758 claims to lenders representing $80.4 million. These claims were associated to defaults on loans that were made during the previous 10 to 15 years;
• The number and value of claims paid increased by 8.8 percent and 8.8 percent respectively compared to the previous year. This is primarily as a result of elevated interest rates and higher lending in recent years following the COVD-19 pandemic;
• The average claim size was $106,110, which represents an increase of 0.02 percent relative to 2023-24.

The CSBFP's website, telephone info line and email address were common channels for small business information

• The CSBFP website continued to be one of ISED's most popular sites in 2024-25 with 364,214 visits. In addition, 1,091 telephone and 569 email inquiries were received from small businesses and lenders through the program's info line and website. Finally, the program's PDF pamphlet was accessed online 18,441 times.
• For more information on the administration and financing activities of the CSBFP, visit the CSBFP website or the Government of Canada's Open data portal.