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AFO · Head-to-head

CSBFP vs conventional senior, which fits?

The Canada Small Business Financing Program backs up to $1,150,000 of bank debt per business (the government covers 85% of the lender's eligible loss) for businesses with $10,000,000 or less in revenue. Conventional senior debt starts at $500,000 and runs into the tens of millions, with stricter underwriting and no government guarantee. Where each is the right answer depends on size, financials, and how the lender's credit committee will read the package.

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Side by side

How the two programs compare.

The matrix below pulls directly from the catalog. Each row shows the same data point across both programs so you can spot the differences at a glance.

Comparison matrix of Conventional Senior Term Loan or Revolver and CSBFP: Canada Small Business Financing Program
AttributeConventional Senior Term Loan or RevolverCSBFP: Canada Small Business Financing Program
Capital typeConventional senior debtGovernment-backed debt
FamilyDebtDebt
Size range$500,000, $25,000,000No floor, $1,150,000
Typical costPrime + 1 to 4%. GSA + personal guarantee for closely held companies.Prime + 3% (variable) or Residential mortgage rate + 3% (fixed). 2% one-time registration fee.
Speed to closeMonthsWeeks to a few months
EligibilityOperating business with 1.2 to 1.5x EBITDA coverage on proposed debt service. Audited or review-engagement financials typically required.Canadian business (including non-profit, charitable, and religious organizations that carry on a business, eligible since June 30, 2021) with gross annual revenue of $10,000,000 or less. Farming businesses are excluded.
Use of proceedsExpansion, Acquisition, Refinancing, Equipment, Real estate, MBO / buyoutEquipment, Real estate, Expansion, Working capital
StatusLive, self-serveLive, self-serve

Choosing between them

Which is the right answer?

Each side describes the scenarios where the program is the stronger fit. Most real-world deals end up in the “in common” section below, neither/nor.

When to choose

Conventional Senior Term Loan or Revolver

Pick CSBFP when the use of proceeds is equipment, leaseholds, real property, working capital, or a going-concern asset purchase within the program limits (up to $1,000,000 of term loans plus a separate $150,000 working-capital line), the business has revenue of $10,000,000 or less, and the sector isn't on the excluded list. The 2% one-time registration fee and Prime+3% rate beat anything conventional senior will offer for a similar-sized facility, and the government guarantee lets the lender stretch on a thinner credit profile.

When to choose

CSBFP: Canada Small Business Financing Program

Pick conventional senior when the ask is over $1,150,000, the use of proceeds falls outside CSBFP (a share purchase rather than an asset purchase, refinancing the same lender's conventional term debt, or a working-capital revolver larger than CSBFP's $150,000 line), or the business already has audited or review-engagement financials and 1.2 to 1.5x EBITDA coverage. Lower rate (Prime+1 to 4%) but tighter covenants and a more demanding package.

What they have in common.

Most owner-operator deals at the $500,000 to $1,500,000 mark stack both: CSBFP covers up to $1,000,000 of term loans (real property can use the full amount; equipment, leaseholds, intangibles, and working capital share a $500,000 cap) plus a $150,000 working-capital line at the cheaper rate, conventional senior covers the larger working-capital revolver and any balance above the CSBFP ceiling.

Still not sure which one fits?

The CPA can look at your specific situation and tell you in one twenty-minute call which program (or stack) is the right structure, and what providers will want to see before the first conversation.

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