CSBFP vs Equipment Financing: How to Choose

Canada Small Business Financing Program vs Equipment Financing: How to Choose

Use the Canada Small Business Financing Program when your bank agrees to lend: it caps the rate at prime plus 3% on a term loan and covers up to $500,000 of equipment and leasehold improvements, with a 2% registration fee. Use equipment financing when the bank says no, the purchase tops $500,000, or the machine is used.

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By Chady Zahri, Chief Executive Officer · Updated October 8, 2026

Voxen insight

Ask your bank about the CSBFP before you ask anyone else. If it says yes and the machine is under $500K, the rate cap is hard to beat. Equipment financing earns its place when the purchase is bigger, used, privately sold, or the bank's answer is no.

How the CSBFP works for an equipment purchase

The Canada Small Business Financing Program is not a government loan. Your bank, caisse or credit union lends the money and makes the decision, and the federal government shares the risk of loss, which is why a bank will sometimes do a CSBFP loan it would not do on its own terms. The program's limits:

businesses with $10M or less in revenue; farms are excluded;
up to $1.15M per borrower in total;
term loans up to $1M, of which no more than $500K for equipment and leasehold improvements;
a line of credit of up to $150K;
a rate of no more than prime plus 3% on a term loan and prime plus 5% on a line of credit;
a 2% registration fee.

CSBFP and equipment financing, side by side

Both finance the same machine. They differ in who decides, how much they go to, and what kind of purchase they accept. Voxen's figures come from its equipment financing page.

	CSBFP term loan	Equipment financing arranged by Voxen
Who lends and decides	Your bank, caisse or credit union	A lender or lessor matched to the file
Amount for equipment	Up to $500K (within $1M of term loans and $1.15M in total)	$10K to $5M
Share of the price financed	Set by your bank	Up to 100%, including soft costs such as installation, training and freight
Rate	No more than prime + 3%	Quoted per file
Fees	2% registration fee	Quoted per file
Who qualifies	Revenue of $10M or less; farms excluded	Set per file on revenue, credit and the equipment
What it buys	Equipment and leasehold improvements	New or used equipment, from a dealer, an auction or a private seller

CSBFP facts checked on 2026-10-08 on the program's official page.

What the 2% registration fee adds

The registration fee is the CSBFP's main extra cost, and it is easy to work out in advance. Compare it with the fees on any other offer, alongside the rate.

Equipment loan	2% registration fee
$100,000	$2,000
$250,000	$5,000
$500,000	$10,000

Derived: loan amount × 2%.

When the CSBFP is the better choice

If your bank will do it, the CSBFP is usually the cheapest way to buy equipment under $500K, because the rate cannot exceed prime plus 3%. It fits best when:

Participation is voluntary, so not every branch offers it. Ask your bank directly whether it will do a CSBFP loan for your purchase.

you already have a working relationship with a bank, caisse or credit union that takes part in the program;
the purchase includes leasehold improvements, which an equipment lender has nothing to secure against;
the timing allows for your bank's normal process.

When equipment financing is the better choice

Equipment financing wins when the CSBFP does not reach the purchase:

Because the equipment secures the financing, the file leans on the asset as well as on your business.

the equipment costs more than $500K, or more than what is left of your CSBFP room;
the machine is used, or bought at auction or from a private seller;
you want soft costs such as installation and freight financed with the machine;
your bank declined, or you would rather keep the bank's lending room for an operating line.

What Voxen looks at in an equipment file

Voxen starts with the vendor's quote and the equipment itself: what it is, its age and its resale market. Then it looks at your revenue and bank activity and the payments you already carry. A down payment of 5% to 20% may be asked for a business under two years old, used equipment over seven years old, a private sale, or specialty equipment with a thin resale market, and Voxen tells you upfront when it applies. If your bank offers a CSBFP loan for the same purchase, compare the two offers side by side before you sign.

What to do next

Get the vendor's quote, then ask your bank whether it will do a CSBFP loan for the purchase. If the answer is no, or the equipment is above $500K, used or privately sold, apply with Voxen for equipment financing with the quote attached.

Frequently asked questions

Is the CSBFP a government loan?

No. The loan comes from your bank, caisse or credit union, which also makes the decision. The federal government shares the lender's risk of loss, which is what lets the program cap the rate.

How much can the CSBFP lend for equipment?

Up to $500,000 for equipment and leasehold improvements, within term loans of up to $1M and a total of $1.15M per borrower, including a line of credit of up to $150,000.

What does the CSBFP registration fee cost?

2% of the loan: $2,000 on $100,000, $5,000 on $250,000 and $10,000 on $500,000.

Do I need a down payment for equipment financing?

Often not; up to 100% can be financed, including soft costs. A down payment of 5% to 20% may be asked for a business under two years old, used equipment over seven years old, a private sale or specialty equipment with a thin resale market.

Can I use the CSBFP and equipment financing together?

They can sit side by side in one business, for example a CSBFP loan for leasehold improvements and equipment financing for a machine above the program's limit. Each lender looks at the payments you already carry before adding its own.

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