The single most common request CSBFP applicants make that the program cannot accommodate is debt refinancing. A business owner pays cash or takes on a high-rate conventional loan to buy equipment, finishes leasehold improvements out-of-pocket, or rolls vendor financing on used machinery, and a year later, when they discover CSBFP exists, they want to roll the debt onto CSBFP at the program’s lower rate.
The general answer is no. CSBFP does not refinance existing debt.
There is one narrow exception built into the regulations that catches a small number of these situations (the 365-day rule), and understanding it precisely is worth a few minutes for anyone with a recent cash purchase or rolled-over loan that might still qualify.
The base rule: CSBFP funds original acquisitions
A CSBFP loan is structured to fund the original acquisition of an eligible asset by the borrower. The Act and Regulations require that the loan proceeds be applied to the purchase of the asset, not to the repayment of an existing obligation. From the lender’s perspective, the registration is tied to the asset purchase event; once the purchase has been completed and paid for through another source, the asset is no longer being acquired by the borrower and is therefore not eligible for CSBFP funding.
This applies whether the existing debt is:
- A conventional commercial loan from another lender
- A line of credit drawn down to pay for the asset
- Vendor financing or a vendor takeback
- A personal loan or shareholder loan used to bridge the purchase
- A credit card balance carried from the purchase
In every case, the asset has already been acquired by the business, and CSBFP cannot retroactively step in.
The 365-day exception
The CSBF Regulations include a specific provision: eligible costs that the borrower paid or committed to within the 365 days before the date the lender approves (or conditionally approves) the loan can be financed under CSBFP, provided the loan would otherwise have qualified. (Before July 2022, this window was 180 days.)
This is not a debt-refinancing rule. It is a deferred-financing rule. The mechanics are:
- The borrower paid for (or committed to) the asset within the 365 days before the loan approval date: cash, line of credit, shareholder loan, conventional loan from another lender, or other source. Costs already financed by the same lender's own conventional term loan are not eligible
- The asset would have been CSBFP-eligible at the time of purchase
- The borrower’s business would have qualified at the time of purchase
- The borrower can produce vendor invoices, proof of payment, and proof of installation for the asset
- The new CSBFP loan funds the borrower, who uses the proceeds to repay whatever source originally paid for the asset
In effect, the program treats the asset purchase as if it is still happening, and the prior payment as a bridge that the CSBFP loan retroactively replaces. The 365 days is counted back from the date the lender approves (or conditionally approves) the loan, so a cost paid 300 days before approval is inside the window and one paid 400 days before approval is not. Repaying a shareholder loan that funded eligible costs within that window is allowed, with proof of the payment.
We have a dedicated page on this provision: What is the CSBFP 365-day rule?
What the 365-day rule does NOT do
The exception is narrow. It does not extend to:
1. Assets paid for more than 365 days before loan approval. A piece of equipment bought 14 months before the lender approves the loan is past the window, even by a single day. The window does not pause or extend based on when the borrower learned about CSBFP.
2. Existing debt for a different purpose. A line of credit drawn for working capital cannot be rolled to CSBFP. The CSBFP loan must trace back to a specific eligible asset purchase.
3. Rolling over a general operating line. Since July 2022 the CSBFP term loan can fund working-capital costs (such as inventory, payroll and rent) and intangibles, together up to $150,000, alongside real property, equipment and leaseholds. There is also a separate CSBFP Line of Credit (up to $150,000). But an existing operating-line balance at another lender is not itself an eligible cost: the CSBFP loan has to trace back to specific eligible costs paid or committed within the 365-day window.
4. Refinancing an existing CSBFP loan. A CSBFP loan, once registered, runs to its scheduled term. It cannot be refinanced under a new CSBFP loan for a better rate.
5. Shares. A share purchase is not eligible under CSBFP. (Goodwill as part of a going-concern purchase, and inventory, have been eligible since July 2022, within the $150,000 limit for intangibles and working capital.) The 365-day rule does not change what is eligible. Only when it can be financed.
A practical example: equipment purchased 9 months ago
A landscaping company owner bought a $42,000 commercial mower in August 2025 using the company line of credit. In May 2026 (nine months later), they hear about CSBFP and want to roll the balance off the line.
The 365-day window is open, as long as the lender approves the loan within 365 days of the purchase. The mower would have been CSBFP-eligible at the time of purchase (a landscaping company with $10M or less in revenue, eligible equipment). The owner has the vendor invoice, the bank statement showing the line draw, and proof the mower is in operation.
A CSBFP loan can be arranged for the eligible portion (subject to the lender's own equity expectations, the program limits, and lender approval). The CSBFP loan proceeds flow to the borrower, who uses them to pay down the line of credit balance. The line of credit becomes available again for working capital; the mower is now financed at the CSBFP rate (prime + 3% maximum) over the standard CSBFP term, not at the line-of-credit floating rate.
The fees apply: the 2% registration fee on the new CSBFP loan, the standard lender fees. But the rate spread between a line of credit and CSBFP often justifies the cost over the loan term.
A practical example: equipment purchased 14 months ago
Same mower, same business, same circumstances, but the purchase was 14 months before the loan would be approved, instead of 9. The window has closed.
The mower cannot now be financed under CSBFP. The 365-day rule is hard-coded and not negotiable.
In this situation, the options are:
- Continue financing the mower under the existing source (line of credit, conventional loan, cash)
- Use a separate, future eligible asset purchase as the CSBFP file, leaving the mower outside the program
- Wait until the next eligible asset purchase opportunity and structure that purchase to fit CSBFP from the start
What does NOT work: pretending the purchase happened more recently, or attempting to construct a sale-leaseback or related-party transfer to reset the window. CSBFP lenders look at the original vendor invoice; the regulation is asset-specific, not borrower-specific.
What to do if you have rolled-over debt
If you are sitting on debt (line of credit, conventional loan, vendor takeback), that was used to fund an eligible asset purchase, the first question is the date of the purchase.
Within 365 days of when the loan could be approved: Talk to a CSBFP-capable lender. Bring the vendor invoice, proof of payment, and proof of installation. The 365-day refinancing exception is well-understood by experienced CSBFP lenders, and the file structure is similar to a new-purchase file.
Past 365 days: The window is closed. Restructure your financing approach so the next eligible purchase is positioned for CSBFP from day one. Bring the proposed purchase to a CSBFP-capable lender before completing the purchase, not after.
What to do before paying cash for an eligible asset
Borrowers who are aware of CSBFP before a purchase have the cleanest path. The sequence:
- Confirm the cost is CSBFP-eligible (equipment, leaseholds, real property, or intangibles and working capital within the $150K limit)
- Confirm the business qualifies ($10M or less in annual gross revenue, Canadian, not a farming business)
- Open a CSBFP application with a participating lender before the purchase, not after
- Use the CSBFP loan proceeds directly to pay the vendor at the time of purchase, or use the funds to repay a short-term bridge taken specifically to complete the purchase
A short-term bridge taken specifically to complete the purchase (with the CSBFP application already in motion), sits comfortably inside the 365-day window and is the standard mechanism when timing requires.
Where to go next
- What is the CSBFP 365-day rule?: the definition page with the regulatory citation.
- CSBFP eligible costs: the asset categories CSBFP can fund.
- How to apply for CSBFP: the application sequence for a new purchase.
- CSBFP overview: the full program reference.
Written by Capital Toolkit