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Rates and terms checked against each source on 8 September 2026

Interest-free business loans exist in Canada. They are not the ones you keep finding.

Search for a Canadian small business loan and you get the Canada Small Business Financing Program: a bank loan at up to the lender's prime rate plus 3%, with a 2% registration fee, where the lender may take an unsecured personal guarantee. The money that genuinely carries 0% interest is the Business Scale-up and Productivity stream, delivered by the regional development agencies, and it almost never appears in those results.

Compare what each one costs See every source
0%
interest on a Business Scale-up and Productivity contribution
prime + 3%
the most a lender may charge on a CSBFP term loan
$1.15M
the CSBFP ceiling per borrower, layered rather than flat
Chase Miller

Written and reviewed by

Chase Miller, Chief Business Development Officer and Co-Founder

Chase Miller is Chief Business Development Officer and Co-Founder of Impact Applications, a Calgary grant consultancy that works with businesses across Canada on federal and provincial grants, tax credits and interest-free loans, and manages the whole process from first assessment through claims and reporting. He runs the first assessment on client engagements, deciding which programs a business should pursue and in what order, and has worked on Canadian government funding since co-founding the firm in 2023. LinkedIn

Program facts checked against the official source:

average funding secured per client
$334,132 average funding secured per client
approval rate
94% approval rate

What each one actually costs you

Every one of these is called a business loan and only one of them is interest-free. That is the whole decision, and it is the column most comparisons leave out.

ProgramInterestAmountWhat it costsPersonal exposure
Business Scale-up and Productivity0%$125,000 to $10 million, depending which agency covers youNo interest. Repayable, and cost-shared at up to 50% of eligible project costsUnsecured at ACOA; no collateral required at PacifiCan
Canada Small Business Financing ProgramUp to prime + 3%Up to $1.15 million per borrowerInterest, plus a 2% registration fee on the amount loanedThe lender may take an unsecured personal guarantee
BDCCommercial, set per dealSet per dealInterest. BDC publishes no rate on its business loans pageRequires personal and business credit in good standing

None of this makes the Canada Small Business Financing Program a bad product. It is a genuine federal program that has put more than $11 billion into more than 53,000 small businesses in ten years, and for many businesses it is the right answer. It is simply not free money, and a business that treats it as free money has mispriced its plan.

Who the interest-free money is actually for

Incorporated, established companies with a project: manufacturers, processors, technology firms and industrial businesses scaling production, adopting technology or entering new markets. Business Scale-up and Productivity is cost-shared, so you need the other half of the project cost from non-government sources, and it is assessed on the project rather than on your credit. If you are pre-revenue, unincorporated, or looking for working capital to cover a gap rather than to fund a defined project, this is not your program and the lenders further down this page are the honest answer.

Business Scale-up and Productivity: the money that really is 0%

BSP is part of the national Regional Economic Growth through Innovation program, which is why it is a national answer rather than a regional curiosity. It is delivered by seven regional development agencies, and the same program behaves very differently depending on which one covers you. We checked all seven first-hand on 8 September 2026, and they are ordered below by whether you can actually apply today.

FedDev Ontario

Southern Ontario, from Cornwall to Windsor

Open
$125,000 to $10 million, the highest ceiling of the seven

FedDev Ontario states it is accepting applications. Contributions are interest-free and unconditionally repayable, and repayment normally begins one year after the project is complete, on a schedule set out in the contribution agreement. Projects span one to three years on average.

WhoBusinesses in southern Ontario. Costs cannot begin before the date the application is submitted, and if approved you must confirm every source of matching funding and sign within 30 calendar days.
What it costs0% interest, unconditionally repayable, with no penalty for early repayment. Normally up to 50% of eligible project costs.
Route inApplications through FedDev Ontario. Contact info@feddevontario.gc.ca or 1-866-593-5505.

What most write-ups leave out

Read the cost-share rule carefully: FedDev says its funding is not intended to replace available commercial financing, and preference is given to projects where its contribution is less than 50%. Asking for the full half is not the strongest application, it is the weakest one that still qualifies.

Official page

PrairiesCan

Alberta, Saskatchewan and Manitoba

Open
$200,000 to $5,000,000, and the door is open

PrairiesCan states it plainly: BSP offers interest-free, repayable funding to incorporated businesses. Its applicant guide sets a minimum request of $200,000 and a maximum of $5,000,000 per project, at up to 50% of total eligible costs, with total support to any one organisation capped at $10 million over the life of the programme. A company may receive funding for only one BSP project per calendar year, and projects run to a maximum of three years.

WhoIncorporated for-profit businesses operating at least 2 years in Canada with staffed operating facilities in Alberta, Saskatchewan or Manitoba. Preference may be given to SMEs under 500 full-time employees, and priority normally goes to companies with 20% year-over-year revenue growth.
What it costs0% interest, repayable, at up to 50% of total eligible costs.
Route inPrairiesCan accepts expressions of interest on an ongoing basis. Applications begin by contacting a local office, on 1-888-338-9378.

What most write-ups leave out

The 20% year-over-year revenue growth priority is the filter that decides most of these, and it is in the applicant guide rather than on the overview page. It is also reimbursement-based: you spend first and claim after, so the project has to be financeable at full cost before the contribution is worth anything to you.

Official page

CED

Quebec

Open
Open, and the longest grace period of the seven

CED's page states its status outright: open, accepting project proposals. Assistance for SMEs is generally up to 50% of authorised costs, repayable without interest, and repayment begins two years after the end of the project rather than one. Non-profits can receive non-repayable assistance up to 90%, or 50% on capital projects.

WhoSMEs, co-ops, business associations, non-profits, business support organisations and Indigenous organisations. Main eligible sectors are manufacturing, food processing, information and communications and multimedia technologies, and life sciences.
What it costs0% interest, generally up to 50% of authorised costs. Repayment starts two years after project end.
Route inSubmit a project through CED, following the project submission guide.

What most write-ups leave out

CED publishes an explicit list of ineligible clients that the other agencies leave implicit: retail, food services, transportation, housing construction, daycare, hair and beauty salons, and nightclubs and bars. If you are one of those, this is a firm no rather than a long shot.

Official page

ACOA

New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador

Open
Unsecured and interest-free, with the widest eligibility

ACOA's wording is the most useful sentence any agency publishes on this: its repayment contributions are unsecured and interest-free, with the schedule and conditions set out in the agreement. No funding band is published.

WhoThe widest of the seven. Sole proprietorships, partnerships, social enterprises, incorporated companies, corporations, co-operatives, Indigenous-owned businesses and all other types of enterprise, plus non-profits serving businesses.
What it costs0% interest, and unsecured.
Route inContact your nearest ACOA office to discuss the project, then submit the Application for financial assistance. Business Information Services on 1-888-576-4444.

What most write-ups leave out

Unsecured is the word to notice. Every other route on this page either takes security on the assets financed or asks about your personal credit. ACOA also offers additional support and flexible repayment for Indigenous youth and women and community-owned Indigenous businesses, and it is the only agency here that funds unincorporated businesses.

Official page

FedNor

Northern Ontario

Confirm current intake
Up to $500,000, and the budget is running short

FedNor's own note: the program currently has limited budget availability due to high demand, and it asks you to contact an officer to discuss a project before submitting. Assistance for SMEs is generally repayable, normally up to a maximum of $500,000 per project, at up to 50% of eligible costs.

WhoIncorporated SMEs and Indigenous businesses and organisations in northern Ontario. Retail and service-based businesses will not be considered.
What it costsGenerally repayable, up to 50% of eligible and supported project costs.
Route inSpeak to a FedNor officer before applying, which the agency asks for explicitly.

What most write-ups leave out

The $500,000 ceiling is one twentieth of FedDev Ontario's, in the same province. A northern Ontario business sizing a project against the $10 million figure it read on a national summary is planning against the wrong number.

Official page

PacifiCan

British Columbia

Not accepting applications
$200,000 to $5 million, but closed right now

PacifiCan's at-a-glance panel reads "Not currently accepting applications". When open: interest-free repayable contributions of $200,000 to $5 million per project, a lifetime maximum of $10 million per recipient, up to 50% of eligible costs reimbursed up to four times a year. Repayment begins one year after project completion and runs in monthly instalments over five years, with no collateral required and no penalty for early repayment.

WhoIncorporated high-growth businesses in British Columbia. At least 50% of project funding must come from non-government sources, confirmed at application and again before approval.
What it costs0% interest, no collateral, no early repayment penalty. Up to 50% of eligible project costs.
Route inPeriodic intakes. Nothing to apply to today; watch for the next one.

What most write-ups leave out

PacifiCan will not accept forecasted revenues, accounts receivable, future funding commitments or SR&ED credit receivables as proof of your matching half. It wants bank statements, unused credit lines, signed term sheets or funding agreements. Plenty of applications fail on that evidence rather than on the project.

Our verified recordOfficial page

CanNor

Yukon, Northwest Territories and Nunavut

Confirm current intake
Real, but undocumented

CanNor delivers the same BSP stream for the territories, aimed at accelerating growth, technology demonstration and commercialisation, productivity and market diversification. Its page publishes no funding band, no cost share and no intake status.

WhoNot published on the programme page.
What it costsNot published on the programme page.
Route inBy email to CanNor.Operations.CanNor@canada.ca.

What most write-ups leave out

The page carries a date modified of 24 September 2021, five years stale as of this check. Treat everything on it as needing confirmation, and note that CanNor runs several other northern programmes that may fit better than BSP.

Official page

Three differences that decide whether this is worth your time

  • The ceiling moves twentyfold. FedNor caps at roughly $500,000 and FedDev Ontario takes requests to $10 million, in the same province. Size your project against your agency, never against a national summary.
  • The grace period is not always a year. CED does not start repayment until two years after the project ends, where the others start at one.
  • Only ACOA funds unincorporated businesses. It takes sole proprietorships and partnerships. Everywhere else you need to be incorporated before you can apply.

The two you will find first, and what they really are

Both of these are worth understanding rather than dismissing. Between them they are the reason most Canadian businesses believe interest-free government financing does not exist.

Canada Small Business Financing Program

Innovation, Science and Economic Development Canada

Always available
Up to $1.15 million, at up to the lender's prime plus 3%

The program most people mean when they search for a Canadian small business loan. It is not a government loan: financial institutions deliver it and are solely responsible for approving it, and the government shares the lender's risk. Over the past 10 years small businesses have received more than 53,000 of these loans totalling more than $11 billion.

WhoSmall businesses or start-ups operating in Canada with gross annual revenues of $10 million or less. Farming businesses are not eligible and are directed to the Canadian Agricultural Loans Act Program.
What it costsTerm loans: the maximum chargeable is the lender's prime lending rate plus 3% floating, or the lender's single family residential mortgage rate plus 3% fixed. Lines of credit: prime plus 5%. On top of that sits a 2% registration fee, paid by the borrower, which may itself be financed.
Route inThrough any bank, caisse populaire or credit union in Canada. The lender approves the loan, disburses the funds and registers it with ISED.

What most write-ups leave out

Two things are worth knowing before you treat this as cheap money. The lender has the option to take an unsecured personal guarantee, which puts you personally behind a business debt. And the $1.15 million ceiling is layered: up to $1,000,000 in term loans, of which no more than $500,000 for leasehold improvements and equipment, and of that, a maximum of $150,000 for intangible assets and working capital, plus up to $150,000 for lines of credit.

Our verified recordOfficial page

BDC

Business Development Bank of Canada

Always available
A commercial lender, not a funding program

BDC is a federal Crown corporation that lends commercially. It is frequently returned alongside government funding searches, which is why it is here, but it is a bank: the money carries interest and is underwritten on your credit.

WhoA business registered in Canada with recorded sales, personal and business credit in good standing, shareholders of legal age, and a business bank account.
What it costsInterest, set per deal. BDC publishes no rate on its general business loans page, so we do not print one. Its tariff-specific programmes are different: those terms are published, and we cover them on our tariff funding page.
Route inDirectly with BDC.

What most write-ups leave out

The requirement that catches people is the credit test. BDC asks that your personal credit be in good standing, so a founder who has carried the business on personal cards can be turned down for the very reason they need the loan. A BSP contribution is assessed on the project and the corporation instead. If tariffs are your reason for borrowing, look at BDC's Pivot to Grow liquidity stream before its general lending: those terms are published and considerably better.

Official page

Where plans go wrong

You cannot add the headline percentages together

These are cost-shared programs, so the binding constraint is not whether you may combine them but the total government assistance allowed against any one cost. A dollar of equipment cannot be funded at 50% by two programs. Regional Business Scale-up and Productivity programs also count tax credits earned on project activities as government assistance, and may reduce their own contribution to hold the total at 50%.

So an interest-free contribution, a grant and an SR&ED claim can all sit on one project, but only if you decide which costs go in which program's schedule before either application is filed. Doing it at claim time is how a funding model that looked like 110% of the project turns out to be 50%.

The other thing worth modelling honestly: 0% interest is not free. A BSP contribution is fully repayable, which in British Columbia means monthly instalments over five years, beginning a year after the project is complete. It is non-dilutive and it costs nothing to carry, but it is a liability.

What it stacks with

SR&ED

The credit whose expenditure base government assistance reduces.

NRC IRAP

Non-repayable contributions for the development stage.

RTRI

Tariff response funding, including repayable contributions at 0%.

Tariff funding

Where BDC's published terms live, including a liquidity stream at 0% for a year.

Three numbers this page does not give you

Because no source we could read states them. On a page whose whole claim is that the figures survive being checked, an admission is worth more than a confident guess.

01

What BDC charges on its general lending

BDC publishes no interest rate on its business loans page, and its rates page returns a 404. We will not print a number we could not read. Its tariff-specific programmes are the exception: those terms are published and we cover them on the tariff funding page. For general lending, ask BDC directly, or ask us and we will get it as part of comparing your options.

02

What BSP is worth at CED, ACOA and CanNor

Three of the seven publish no funding band. FedDev Ontario ($125,000 to $10 million), PrairiesCan ($200,000 to $5,000,000), PacifiCan ($200,000 to $5 million) and FedNor (about $500,000) do. For CED, ACOA and CanNor the amount is settled in conversation with an officer, which is a real answer rather than an evasion: it is why all three route you to a phone call or an email before an application. Worth knowing that PrairiesCan's band sits in its applicant guide rather than on its overview page, so a quick look at the overview alone will tell you there is no published number when there is.

03

Anything current about CanNor's stream

CanNor delivers the same BSP stream across Yukon, the Northwest Territories and Nunavut, but its programme page was last modified on 24 September 2021 and publishes no amount, cost share or intake status. We treat everything on it as needing confirmation by email, and would check whether one of CanNor's other northern programmes fits better before applying.

Where every figure came from

Each source was read on 8 September 2026, and the date shown is the date that page carried itself. Where a page publishes no date, that is recorded too.

Interest-free business loans: common questions

Answered against each administering body's own published material, checked 8 September 2026.

Yes, but they are not what a search for business loans returns. The genuinely 0% federal money is the Business Scale-up and Productivity stream of the Regional Economic Growth through Innovation program, delivered by the seven regional development agencies. PrairiesCan describes it in its own words as interest-free, repayable funding to incorporated businesses. It is repayable, so it is a loan in substance, but no interest accrues. The Canada Small Business Financing Program and BDC, which dominate these search results, both charge interest.

For term loans the maximum chargeable is the lender's prime lending rate plus 3% on a floating rate, or the lender's single family residential mortgage rate for the term of the loan plus 3% on a fixed rate. For lines of credit the maximum chargeable is the lender's prime lending rate plus 5%. There is also a 2% registration fee based on the total amount loaned, paid by the borrower to the lender, which may be financed. So it is a market-rate loan with a government guarantee behind it, not cheap money.

Up to $1.15 million per borrower, and the ceiling is layered rather than flat. Up to $1,000,000 in term loans, of which no more than $500,000 can be used for purchasing leasehold improvements and purchasing or improving new or used equipment, and of that amount a maximum of $150,000 for intangible assets and working capital. Separately, up to $150,000 for lines of credit. Eligibility is limited to businesses operating in Canada with gross annual revenues of $10 million or less, and farming businesses are excluded.

It depends entirely on which agency covers you, and the spread is wide. FedDev Ontario takes requests from $125,000 up to $10 million per project in southern Ontario. PacifiCan publishes $200,000 to $5 million per project with a $10 million lifetime maximum per recipient in British Columbia. FedNor caps at roughly $500,000 per project in northern Ontario, one twentieth of FedDev's ceiling in the same province. PrairiesCan's applicant guide sets $200,000 to $5,000,000 with a $10 million lifetime cap per organisation. CED, ACOA and CanNor publish no band at all. Every one of them is cost-shared at up to 50% of eligible project costs, so the programme funds up to half your project, never the whole thing.

It depends where you are, and on 8 September 2026 the answer differed by agency. FedDev Ontario states it is accepting applications, CED states it is open and accepting project proposals, PrairiesCan accepts expressions of interest on an ongoing basis, and ACOA asks you to contact your nearest office. FedNor is open but warns that the programme has limited budget availability due to high demand and asks you to speak to an officer before applying. PacifiCan's page reads "Not currently accepting applications". CanNor publishes no status at all, on a page last modified in September 2021. That difference between agencies delivering one national programme is the most common reason a business concludes the money does not exist.

Under the Canada Small Business Financing Program you might: lenders have the option to take an unsecured personal guarantee, and security must be taken on the assets financed. BDC assesses personal as well as business credit. A Business Scale-up and Productivity contribution works differently. ACOA states that its repayment contributions are unsecured, and PacifiCan states that no collateral is required and there is no penalty for early repayment. For a founder who has been carrying the company on personal credit, that distinction is often the deciding one.

No, and treating them as the same is how businesses get into trouble. A grant is non-repayable. A Business Scale-up and Productivity contribution is interest-free but fully repayable, which in British Columbia means monthly instalments over five years, beginning one year after the project is complete. It is still non-dilutive, so you keep full ownership, and it costs nothing to carry, but it is a liability on your balance sheet and it has to be modelled as one.

Usually, but not by simple addition. Because these are cost-shared programs, the constraint is the total government assistance allowed against any one cost, and a dollar of equipment cannot be funded at 50% by two programs. PacifiCan says so directly: any government assistance applied to project costs, including SR&ED credits, may reduce BSP funding to keep total government support at no more than 50%, and it advises excluding SR&ED eligible costs from the application where possible. It also refuses to accept SR&ED credit receivables as proof of your matching half. The work is deciding which costs sit in which programme's schedule before either application is filed, not adding the headline percentages together.

Find out which financing you actually qualify for

The call is a diagnostic, not a pitch. We settle whether your project fits Business Scale-up and Productivity, whether your agency is taking applications right now, what the realistic contribution is once the 50% cost share applies, and whether an interest-bearing loan is honestly the better answer for you. We do not issue the financing. We get it approved and manage it, and if you are not a fit we will say so.

Check what my company qualifies for

No obligation · we will tell you if we are not the right fit