Alike the other parts of the world, the small business enterprises are an important part of the economic activities in Canada too. Here also, the small business sector contributes greatly to the gross domestic product of the country. As far as the employment opportunities are concerned, it is to be noted that the small business sector is biggest employer in Canada. So, it can be said without any doubt that the small business enterprises are one of the most important areas of the business activities. As far as financing these small

business units is considered, the government of Canada is quite dedicated towards it. It fully understands that the finance is the most important requirement that has to be fulfilled whether it is a new set up or the extension of the old business unit. There are many financial institutions like banks etc that extend the financial help to these small business units. Apart from all of these, there is a Canada Small Business Financing Program also that needs special mention. Let us discuss it next.

Canada Small Business Program

It is known as the CSBF Program and it basically helps the various types of small business industries and enterprises in Canada by assisting them in obtaining the term loans, the capital leases etc. Thus, it can be said that this program is basically formed to help the small business industries to acquire the fixed assets and other such needs. The above program operates as per the guidelines that have been given in the Canada Small Business Financing Act. As far as the way of financing is concerned, the loans are made to the small business unites directly by the different qualified lenders in the Canada like the chartered banks, Alberta Treasury branches, almost all the credit unions, trusts and the insurance companies. The leases are of course issued by the various participating lessors. So, there are many financial institutions etc that provide loans to the small business units in Canada directly. Now the question that arises here is that who can avail the loans under the small business finance program of Canada. Let us discuss it.

Eligibility

As far as the eligibility criteria is concerned, most of the small business units in Canada are eligible for the above type of loan whether they are starting up or are the existing business units. But it should be noted here that the farming,

charitable and religious enterprises are not eligible to get the financial assistance under the program so long as their estimated annual gross revenues are less than $5 million during any year in which they apply for the loan. The different types of business constitutions that are allowed for financial assistance under the program are the sole proprietorships, partnerships and the different types of incorporated companies. So, it can be said that almost all the types of small business enterprises are eligible to get the financial assistance under the Canada Small Business Financing Program. If any of the business types that are barred from getting the assistance as described above wishes to be a part of the program, it can easily contact the concerned department to get the required information.

If one wishes to know the objectives of the program, it can be rightly said that the CSBF program has been formed essentially to increase the availability of different types of loans as well as the capital leases for the establishing, modernizing, expanding and the improving the various small business units in Canada. To provide a boost to the program, a new five year Capital Leasing Pilot Project was launched on April 1, 2002, which was in addition to the existing loan program. This project was introduced to help the small business enterprises to access the capital lease financing for acquiring the new as well as the used equipment.

The various areas in which the loans that are being provided under the program can be used are:

1- The purchase and the improvement of the immovable or the real estate.

2- For the purchase of the leasehold improvements or any other such improvements that are to be done on the leased property

3- For the purchase of new as well as the used equipment that are necessary for the operation of the business activity.

4- For the one time registration fee which is equal to the 2% of the total amount loaned but it is to be noted here that the individual borrowers total maximum limit of $250000 is not exceeded in any case.

Thus, it can be said that the loan proceeds under the CSBF Program can be used for many a purposes. Also, there are many purposes for which the loan provided under the program cannot be used. These are for the purchase of shares, for the franchise fees, for improving a family dwelling, for the finance of the working capital like the finance inventory, the accounts receivable etc and towards the professional fees. Apart from these, the loan proceeds can also not be used for the purchase of vehicle for the personal use, feasibility studies, survey costs, and intangibles. Thus, there are many purposes that are excluded in the program for which no financial assistance is available from the CSBF program.

So far as the borrowing limits of the borrowers are concerned under the program, the maximum value of loans or the leases that the borrower can take should not exceed the $250000 with respect to the outstanding under the CSBFA. Also, the loan proceeds can easily by used to finance up to 90% of the total cost of assets, which also includes the non-refundable taxes and the different types of duties. It is to be noted here that the lenders under the program are required to take security in the asses financed. The lenders are also allowed to take the personal guarantees or the surety, which does not exceed in total the 25% of the original amount of loan. Also, the guarantees and the surety described above cannot be secured with personal assets.

So, CSBF is providing all the necessary assistance

After reading the above article, it can be said without any doubt that the Canada Small Business Finance is providing all the assistance the small business units require, though it does not provide any assistance in the working capital requirements. If any small business unit wants to acquire machinery, estate and other such fixed assets for the expansion of the business etc, CSBF is the name.