Until April of this year businesses could only finance a maximum of $250,000 under the CSBF program. This limit was raised to $500,000 on April 1, 2009.

The CSBF program is very specific about what is eligible. You can apply for financing for the purchase or improvement of real property and immovables, the purchase of leasehold improvements or improvement to leased property, or the purchase or improvement of new or used equipment.

While you can apply for the full $500,000 for loans for the purchase of property or immovables, there is a cap of $350,000 for the purchase or improvement of equipment and the purchase of leasehold improvements.

Are you eligible?

Okay, so your financing needs match the program specifications. The next question to ask is whether or not you qualify.

The CSBF program is open to most sole proprietorship, partnership, or incorporated companies with gross revenues under $5 million. Non-profits, religious, and farming organizations are not eligible. (Farming businesses can seek financial support under the Farm Improvement and Marketing Cooperatives Loans Program, administered by Agriculture and Agri-Food Canada.)

Capped interest rates

Interest rates for loans received under the program can be either fixed or floating.

Fixed rate cannot be higher than 3% of the bank's single family mortgage rates. If you opt for a floating rate, you will find them capped; these rates cannot be more than 3% higher than the bank prime-lending rate.

In addition to "administration" fees included with your loan, you will also need to pay a 2% registration fee.

Evaluation of loans

Your chances of securing financing improve when the government provides a guarantee. Yet this support does not mean that a loan is ensured; by law the lending institution must apply the same procedures they would use in making a conventional loan.

Nor do all financial institutions participate. You can find a list of participating lenders on the Canada Small Business Financing Program website.

Each financial institution is free to use their own lending criteria when evaluating an application under the CSBF program. While the Small Business Financing Directorate is responsible for the CSBF program, they do not accept applications or become involved in disputes between companies and lending institutions.

You will likely have to show that you have contributed a portion of your own money toward the purchase, as loans under the CSBF will only cover up to 90% of the purchase. Capital leases, on the other hand, can cover the entire cost of the equipment.

What to do if you feel your application is unfairly turned down

If you believe that you have not been dealt with fairly, you should first talk to the person who you dealt with original. Explain the problem and do your best to resolve your concerns here first. If this does not resolve your concerns to your satisfaction, the next step is to take your complaint to a higher level within the financial institution. You can go to a branch manager, regional manager or even a VP if you believe it is appropriate.

As a final step, if you cannot resolve your complaint, you can contact the Ombudsman for Banking Services and Investments, an independent and impartial organization that resolves disputes between participating financial institutions and consumers when the parties cannot solve the problem on their own.