Funding basics and instrument differences
50 answers. Written by the celerfunding.com editorial team from official sources. Each answer shows where it applies and when its sources were read.
What is the difference between a grant, a loan and a loan guarantee?
A grant or contribution is money awarded for a set purpose, a loan is money you must repay, and a loan guarantee is a government backstop for a lender that still makes the lending decision. A guaranteed loan is therefore still a loan.
Government funding is not one thing. Some federal contributions are repayable or only partly repayable, so read the funding agreement before assuming nothing comes back.
In the US, an SBA 7(a) loan comes from a participating lender with an SBA guaranty. You apply to the lender, not to SBA. In Canada, the Canada Small Business Financing Program works through banks, credit unions and caisses populaires, which make the decision.
Compare what you receive, what you must repay, who decides, and what security or personal commitments are required. Approval is never assured under any of these routes.
A good next step is to read the official page for the exact program and note which of these three types it is.
Next: Funding answers
Sources (read 2026-10-31): ISED application toolkit; SBA lending; Borrower application route
What is the difference between debt and equity funding?
Debt is money you repay under agreed terms, while equity is investor capital given in exchange for a share of ownership or control. Neither is a grant.
Investor capital generally comes with ownership or control for the investor, according to SBA's funding guidance. BDC notes that one deal can mix instruments, such as senior debt, seller financing or quasi-equity. Seller financing and equity should never be read as grant money.
Raising money from the public through a securities offering is regulated. In the US, Regulation Crowdfunding is a securities exemption, not a donation or philanthropic grant, and each offering must run through one SEC-registered broker-dealer or funding portal. Reward or donation campaigns are a different thing.
This page is general information only and is not investment, legal or tax advice. Rules differ by country and by structure, so get independent professional advice before offering ownership to anyone.
For a next step, read the SEC's issuer guidance if you are weighing crowdfunding.
Next: SEC crowdfunding guidance for issuers
Sources (read 2026-10-31): SBA funding guide; financing types; SEC issuer guidance
What does non-dilutive funding mean?
Non-dilutive funding is money that does not require you to hand over ownership of your company. Loans, savings and crowdfunding campaigns that do not sell shares all fit that idea, but they differ a lot in cost and risk.
SBA's funding guide says venture capital is equity, not a loan, and that investors often want a board seat. By contrast, a bank or credit union loan leaves you in full control. BDC describes quasi-equity as a hybrid that avoids ownership dilution.
Non-dilutive does not mean easy or cheap. A loan must be repaid, and lenders may ask for security or a personal guarantee. A grant, where one exists, comes with its own conditions.
List what each option requires you to give up, then compare. Read the program or lender page before you apply.
Next: Business funding
Related: What is the difference between debt and equity funding?
Sources (read 2026-11-01): SBA funding guide; financing types
Can I use my own savings, family money or retirement funds to fund my business?
Yes, self-funding is a common route, but you carry all the risk yourself. SBA lists personal resources such as savings, family and friends, or a retirement account as one way to fund a business.
The upside is that you keep full control. The downside is that your own money is exposed if the plan fails. SBA also warns that taking early withdrawals from retirement savings can bring fees or penalties.
Tax and retirement-plan rules are specific to your country and account type, so speak to an accountant or adviser before you pull money out. This page is general information only, not tax or financial advice.
If you later seek outside financing, lenders and investors often like to see that the owner has put in some of their own money.
Next: Business funding
Related: What is the difference between a grant, a loan and a loan guarantee?
Sources (read 2026-11-01): SBA funding guide
Is crowdfunding a loan, a donation or an investment?
It depends on the type. Some campaigns give backers a product or thank-you reward, while others sell ownership to investors, and those are very different things.
SBA describes crowdfunding as many people contributing, usually without taking ownership or expecting a financial return. Backers often receive a gift such as the product itself, and a failed plan generally does not mean repaying them.
Equity crowdfunding is different. In the US, Regulation Crowdfunding is a securities exemption, and each offering must go through one SEC-registered broker-dealer or funding portal.
Check what you are promising backers before you launch. Offering shares or a financial return can trigger securities rules in your country. This is general information only, so get legal advice for any offering of ownership.
Next: Business funding
Sources (read 2026-11-01): SBA funding guide; SEC issuer guidance
What does a company have to file when it raises money through Regulation Crowdfunding?
The company files an offering statement on Form C, and it keeps filing after the raise. SEC staff guidance says the Form C is filed electronically on EDGAR and with the intermediary.
The financial statements required depend on how much is offered, with separate tiers at $124,000 or less, $124,001 to $618,000, and more than $618,000. After the offering, issuers use Form C/A for amendments, Form C-U for progress updates, Form C-AR for annual reports and Form C-TR to end annual reporting.
Each offering must run through one online platform operated by a registered broker-dealer or funding portal. Dollar thresholds are adjusted over time, so check the current SEC page.
This is a summary of agency guidance, not legal advice. Speak to a securities lawyer before you launch an offering.
Next: SEC crowdfunding guidance for issuers
Related: What does non-dilutive funding mean?
Sources (read 2026-11-01): SEC issuer guidance
Can a Canadian or other non-US company use Regulation Crowdfunding?
Generally no. SEC staff guidance lists non-U.S. companies among those that cannot use Regulation Crowdfunding as issuers.
The same list excludes companies that already report under the Exchange Act, certain investment companies, companies disqualified under the bad actor rules, and companies that missed annual reports in the prior two years. It also excludes companies without a specific business plan.
A Canadian business that wants to sell shares to the public will face Canadian securities rules, which vary by province and are not covered by this answer. Reward or donation campaigns work differently from securities offerings.
This is general information, not legal advice. Before you promise investors anything, speak to a securities lawyer in the country where you will sell and where you are based.
Next: International funding
Related: What does non-dilutive funding mean?; Can I use my own savings, family money or retirement funds to fund my business?
Sources (read 2026-11-01): SEC issuer guidance
What is seller financing?
Seller financing means the person selling a business is paid part of the price over time instead of all in cash. BDC explains that the seller receives part of the purchase price in cash and the buyer pays the rest, with interest, over an agreed period.
It is often combined with a bank loan and the buyer's own cash. BDC notes that one deal can mix debt, equity, seller financing and other layers.
Seller financing is a debt owed to the seller. It is not a grant or free money, and it should be set out in a written agreement checked by a lawyer.
Note that some programs limit it. For example, the Canada Small Business Financing Program lists vendor take-back financing as an ineligible use of its loan proceeds.
Bring the seller's terms to your lender early.
Next: Business funding
Sources (read 2026-11-01): financing types; ISED guidelines, sections 2.2–2.3
What is quasi-equity or mezzanine financing?
Quasi-equity is a hybrid of debt and equity with flexible repayment terms, usually aimed at fast-growing firms with few assets to pledge. BDC says it avoids diluting ownership.
Mezzanine financing sits between senior debt and equity. BDC notes that senior debt is secured on company assets and is repaid first if things go wrong, while mezzanine financing is generally unsecured, so lenders charge higher interest.
That higher cost is the trade-off for flexibility. It is still money you must pay back on agreed terms, and it is not a grant.
These structures are more complex than a standard bank loan. Get independent legal and accounting advice, and ask what rights the financer gets if you miss a payment.
For a next step, read BDC's explanation of financing types.
Next: BDC financing types
Related: What does a company have to file when it raises money through Regulation Crowdfunding?
Sources (read 2026-11-01): financing types
What is a secured loan and what counts as collateral?
A secured loan is backed by property the lender can sell if you cannot repay. That property is called collateral.
BDC explains that with a secured loan the lender can seize and sell the pledged assets. Equipment can serve as collateral, often financed as a percentage of its assessed value. Senior debt is secured on company assets and is repaid first in a default. By contrast, BDC says working capital financing does not require business assets but does need a personal guarantee.
SBA says its 7(a) small loans of $50,000 or less need no collateral, and for larger amounts the lender follows its own collateral policy.
Before signing, ask exactly which assets are pledged, whether the lender will register a charge on them, and what happens on default. Get independent advice if the terms are unclear.
Next: Business funding
Related: What is quasi-equity or mezzanine financing?
Sources (read 2026-11-01): financing types; SBA 7(a) terms, conditions and eligibility
What is a personal guarantee on a business loan?
A personal guarantee is your own promise to repay a business loan if the business cannot. It can put your personal assets at risk, so read it closely before you sign.
BDC says some of its loans may need a personal or corporate guarantee instead of assets, and its working capital financing requires one. The Canada Small Business Financing Program guidelines say personal assets cannot secure a CSBF loan, and sole proprietors and partners are liable for the full loan. The guidelines also cap unsecured personal guarantees at the original amount disbursed.
Rules differ by lender and by program, so ask for the guarantee wording and any cap in writing.
A lawyer can explain what you would be signing. Do not rely on this page for legal advice.
Next: Business funding
Related: What is seller financing?
Sources (read 2026-11-01): BDC financing FAQ; financing types; ISED guidelines, sections 2.2–2.3
If a loan is government-backed, is the money coming from the government?
Usually no. In the main guarantee programs, a private lender provides the money and the government backs part of the lender's risk.
The ISED FAQ for the Canada Small Business Financing Program says the money the borrower receives belongs to the financial institution and not the government. Lenders include banks, credit unions and caisses populaires. You apply to the lender, and ISED does not process applications.
SBA says that for a 7(a) loan you work directly with your lender and not with SBA.
Because the lender decides, a guarantee does not assure approval, and you are still the borrower who must repay. Some other programs, such as BDC financing or SBA disaster loans, work differently.
Check the official page for the program you want.
Next: Business funding
Related: What is a personal guarantee on a business loan?
Sources (read 2026-11-01): CSBFP; SBA lending
Does using SBA's Lender Match tool mean I will get a loan?
No. SBA's Lender Match tool helps connect your business with SBA-approved lenders, but it does not approve or fund anything. Each lender decides for itself.
SBA's 7(a) page says you will always work directly with your lender and not with SBA, and that lenders decide which documents they need. Microloans go through nonprofit intermediaries, which make all credit decisions and set terms.
Use a match as a starting list. Then ask each lender which SBA programs it handles, its typical requirements, its fees and its timing.
Prepare your business plan, financial statements and details of existing debts before you apply, since lenders may ask for them.
Nothing here predicts approval. You can also send CELER an enquiry, but CELER does not make lending decisions.
Next: US funding resources
Related: What is a secured loan and what counts as collateral?
Sources (read 2026-11-01): SBA lending; SBA loans overview; microloans
What can a standard SBA 7(a) loan be used for, and what is the maximum?
As of 1 November 2026, SBA's 7(a) page lists a $5 million maximum and a range of eligible uses. Those include buying, refinancing or improving real estate, short- and long-term working capital, refinancing current business debt, equipment, furniture, fixtures and supplies, and complete or partial changes of ownership.
A 7(a) loan is made by a participating lender with an SBA guarantee, so the lender sets the terms and decides whether to approve. Smaller SBA Express and Export Express loans have a $500,000 limit.
Loan size, security and rates vary by lender and program.
Uses and limits change, so confirm them on SBA's current page and with your lender. Nothing here predicts approval or an amount.
Next: US funding resources
Related: What is a secured loan and what counts as collateral?
Sources (read 2026-11-01): SBA lending; SBA 7(a) terms, conditions and eligibility
What are SBICs and do they invest in small businesses?
SBICs are privately owned firms licensed and regulated by SBA that invest in qualifying small businesses. SBA does not invest directly in your business. It funds licensed SBICs, which invest their own money plus SBA-guaranteed funds.
SBA's page describes debt, equity, and a mix of both. Typical SBIC loans run from $250,000 to $10 million, and equity investments from $100,000 to $5 million. SBICs tend to target mature, profitable companies with enough cash flow to pay interest.
Basic requirements include meeting SBA size standards, having at least 51% of employees and assets in the US, and working in an approved industry. Farmland, real estate and financing are excluded.
An SBIC investment is not a grant. Each SBIC sets its own focus and terms, so research firms individually.
Next: US funding resources
Sources (read 2026-11-01): SBA investment capital (SBIC)
What is venture capital and what do investors expect in return?
Venture capital is investor money given in return for an ownership share, so it is not a loan and not a grant. SBA's funding guide says venture capital invests in high-growth companies in exchange for equity and that investors usually want an active role, often including a board seat.
That means you give up some ownership and control. Nothing is repaid on a schedule the way a loan is, but investors expect a return through growth and an eventual sale or similar event.
Venture capital suits a narrow set of high-growth businesses and is rarely right for a typical shop or service firm.
Offering ownership is regulated, so use a securities lawyer before you speak to investors or advertise an offer. This page is general information only, not investment or legal advice.
Next: Business funding
Related: What is the difference between a grant, a loan and a loan guarantee?
Sources (read 2026-11-01): SBA funding guide
Are there government grants to pay my personal bills or start a personal project?
Generally no. USAGov says federal grants are generally not for personal expenses and go to organizations running government-funded programs, such as universities, research labs, nonprofits, state and local governments, and businesses.
Grants.gov says individuals may apply only on their own behalf, not for a company or organization. It also states that none of its listings provide personal financial assistance, and it points people seeking personal aid to USA.gov.
Benefits for food, health care and housing exist, each with its own rules and deadlines.
If anyone asks for a fee or personal information to release a grant, treat it as a likely scam. In Canada, personal benefits and business programs are also separate, so start at the official federal and provincial sites.
Check USAGov's benefit finder for personal programs.
Next: US funding resources
Sources (read 2026-11-01): USAGov guidance; Grants.gov eligibility
What is a Notice of Funding Opportunity and why does it matter?
A Notice of Funding Opportunity, or NOFO, is the official announcement of a federal grant, and it sets out who may apply. Grants.gov says each NOFO has an eligibility section and tells applicants to read it before applying.
Grants.gov warns that applying while ineligible wastes time and money because you cannot receive the award.
The NOFO also normally explains the purpose of the funding, key dates and what to submit. Because each opportunity differs, being eligible for one federal grant does not make you eligible for another.
To find them, search Grants.gov. State and local governments, and many foundations, publish their own notices under other names.
As a next step, open the NOFO and check the eligibility section against your organization type before drafting anything.
Next: US funding resources
Related: What are SBICs and do they invest in small businesses?
Sources (read 2026-11-01): Grants.gov eligibility
What does it mean when a lender asks if I can get credit elsewhere?
It means a government-backed program is meant for borrowers who cannot get the financing they need on reasonable terms from other sources. For SBA 7(a), the eligibility list includes being unable to get the desired credit on reasonable terms from non-government sources.
The same list asks that the business be creditworthy with a reasonable ability to repay, be an operating for-profit business in the US, and meet SBA size standards.
In practice the lender will usually explain how it applies the test. You may be asked whether you looked at conventional loans first.
This is not a promise that any particular refusal will qualify you, and the lender decides. Keep records of other lenders you approached and their responses, since they may be useful.
Check SBA's current wording on the 7(a) page.
Next: US funding resources
Related: What is a secured loan and what counts as collateral?
Sources (read 2026-11-01): SBA lending; SBA 7(a) terms, conditions and eligibility
What can a Canada Small Business Financing Program loan not be used for?
As of 1 November 2026, the program guidelines exclude several uses. These include refinancing existing term loans or conventional lines of credit, share acquisitions, vendor take-back financing, personal-use vehicles, improvements to non-commercial family dwellings, and refundable taxes such as GST/HST.
The guidelines also exclude the borrower's own labour for leasehold and equipment loans, barter transactions, and costs incurred more than 365 days before approval for term loans and lines of credit.
Eligible uses include real property, leasehold improvements, equipment, intangible assets and working capital, with limits. ISED's FAQ says its list of excluded purchases is not exhaustive, so check with the lender when unsure.
A lender makes the final decision. Read the current guidelines before you plan a purchase around this program.
Next: Canada funding resources
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3; CSBFP
Is there a cap on interest and fees on a CSBFP loan?
Yes, the program sets maximums, but the lender sets the actual rate. As of 1 November 2026, ISED's guidelines say floating-rate term loans can be no more than prime plus 3% and fixed-rate term loans no more than the posted single-family residential mortgage rate plus 3%, both including the program's administration fee. Lines of credit can be no more than prime plus 5%.
There is also a registration fee of 2% of the term loan or authorized line of credit, which can be financed. Lender fees such as set-up and renewal fees are paid to the lender and cannot be financed, according to ISED's FAQ.
Caps are ceilings, not quoted rates. Your offer depends on the lender and your file.
Compare written quotes from more than one lender before you decide.
Next: Canada funding resources
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3; CSBFP
Is BDC a bank?
BDC calls itself a commercial bank that offers long-term business financing, and also describes itself as a Crown corporation that is not a traditional bank. Its own FAQ uses both descriptions, so read its wording rather than assuming it works like a retail bank.
What matters for borrowers is the practical difference. BDC lends directly to businesses, so you apply to BDC, not to a separate lender. Its FAQ notes that collateral depends on the loan, some loans may need a personal or corporate guarantee, and credit checks apply to guarantors and board members.
BDC has eligibility limits, such as time in business and excluded sectors, covered elsewhere in this library.
BDC financing is not a grant and approval is never assured. Compare it with bank and CSBFP options.
Next: Canada funding resources
Sources (read 2026-11-01): BDC financing FAQ
Does a working capital loan need collateral?
Often not business assets, but it may need a personal guarantee. BDC says working capital loans are based on cash flow and usually do not require collateral. In another passage it says working capital financing does not need business assets but does require a personal guarantee.
Working capital pays day-to-day costs such as inventory, payroll and rent. The Canada Small Business Financing Program lists these among eligible working capital uses, with limits, and a line of credit under that program is limited to working capital.
The absence of collateral can mean a higher cost or a stronger personal commitment from you. Ask each lender what security and guarantees it wants, and what happens if you miss a payment.
A lender decides each case, and nothing here predicts approval or price.
Next: Business funding
Related: What is seller financing?; What is quasi-equity or mezzanine financing?
Sources (read 2026-11-01): financing types; ISED guidelines, sections 2.2–2.3
How long does a commercial mortgage usually last?
BDC says commercial mortgages typically run 15 to 30 years. The right length depends on the property, your cash flow and what the lender will offer.
A longer term lowers each payment but usually means more interest over time. Many commercial lenders also set a shorter loan term and a longer amortization, so ask both numbers and whether the rate resets.
Programs can shape the term. SBA 504 loans, for example, are designed for long-term fixed-rate financing of major assets through community lenders.
Compare offers on total cost, penalties for early repayment and any personal guarantees. This is general information, and your actual terms are set by the lender.
If you plan a purchase, speak with a lender or adviser before signing an offer on a property.
Next: Business funding
Sources (read 2026-11-01): financing types; SBA loans overview
How long should an equipment loan last?
A good rule from BDC is to match the loan term to the equipment's useful life. If you repay over a longer period than the asset lasts, you may still owe money on equipment you no longer use.
BDC also says equipment itself often serves as collateral, usually financed as a percentage of its assessed value, so you may need a down payment or other security for the rest.
For equipment that becomes obsolete quickly, BDC suggests leasing, where you pay monthly for use and the supplier keeps ownership.
Tax and accounting treatment differ between buying and leasing, so ask an accountant. Compare total cost, not just the monthly payment.
For a next step, request written quotes for both a loan and a lease from at least two providers.
Next: Business funding
Sources (read 2026-11-01): financing types
How big can an SBA Express loan be, and does it need collateral?
As of 1 November 2026, SBA's lender page gives $500,000 as the maximum for SBA Express and Export Express loans. For standard 7(a) loans the maximum is $5 million.
On collateral, SBA says SBA Express needs none up to $50,000. Above that, the lender applies its existing collateral policy, though a loan cannot be declined solely because collateral is inadequate. The same $50,000 threshold applies to 7(a) Small loans.
No collateral requirement does not mean no commitment. Lenders may still ask for personal guarantees, and you must repay the loan.
Limits and policies change, so confirm them on SBA's current page and ask the lender how it handles smaller loans.
This is not a prediction of approval or amount.
Next: US funding resources
Related: If a loan is government-backed, is the money coming from the government?; What is seller financing?
Sources (read 2026-11-01): SBA 7(a) terms, conditions and eligibility
How long can an SBA microloan run and what rates are typical?
As of 1 November 2026, SBA says a microloan has a maximum term of seven years, and interest rates vary by intermediary, generally between 8% and 13%. Loans go up to $50,000, with an average of about $13,000.
The intermediary lender makes all credit decisions and sets the terms, so rates and security can differ from one lender to the next. SBA's page does not state collateral requirements.
Funds can pay for working capital, inventory, supplies, furniture, fixtures, machinery and equipment, but not to repay existing debt or buy real estate.
Compare more than one intermediary if you can, and ask for the full cost in writing. A microloan is a loan you repay, not a grant.
Confirm current figures on SBA's microloan page.
Next: US funding resources
Sources (read 2026-11-01): microloans
What is an SBA intermediary lender?
An intermediary lender is a community-based organization that SBA funds to deliver certain loans on its behalf. For microloans, SBA funds nonprofit intermediaries that administer the program. You apply to the intermediary, and it makes all credit decisions and sets the terms.
SBA's loans overview also lists 504 loans, which are delivered through community-based Certified Development Companies, and 7(a) loans, which participating lenders make.
This means SBA does not decide your application in these programs. Each intermediary has its own focus, area and rules.
Find one through SBA's tools, then ask about eligibility, costs and the documents they need. A relationship with the intermediary matters, since many also offer training.
Approval is never assured.
Next: US funding resources
Related: How long should an equipment loan last?
Sources (read 2026-11-01): microloans; SBA loans overview; SBA lending
Is CELER a lender, or does it just refer businesses?
CELER is not a lender. Its terms say Celer Merchants Corporation operates celerfunding.com and that it is a broker that refers business owners to independent third-party lenders and funding companies.
The terms add that CELER does not make credit decisions, does not negotiate, arrange or approve financing, and does not prepare loan documents. The lender handles those steps directly with you.
The site is also not a government agency, grant-maker or official program partner. For government programs, the official program page is the source.
If you want, you can send CELER an enquiry. Nothing on the site is an offer of credit or a commitment to lend, and each lender sets its own approval criteria, rates and terms.
Read the current terms page for the full wording.
Next: How we review answers
Related: What is an SBA intermediary lender?; Is CELER a lender, or does it just refer businesses?
Sources (read 2026-11-01): Current CELER terms
Do lenders pay CELER when a referred business is funded?
Yes, they may. CELER's terms say it does not charge you a fee, and also that lenders and funding companies may pay celerfunding.com a fee or commission when a referred business is funded.
The terms add that this payment may influence which offers you see. That is a conflict of interest worth knowing about, so compare any offer you receive against other sources and the lender's own information.
A payment to a referrer does not change what you owe the lender. Always read the lender's cost disclosure, including rates, fees and repayment terms.
CELER does not give legal, tax, accounting or investment advice, so use your own adviser for those points.
You can read the full wording on the current terms page before you send an enquiry.
Next: How we review answers
Related: How long can an SBA microloan run and what rates are typical?
Sources (read 2026-11-01): Current CELER terms
Can CELER guarantee that I will be approved or funded?
No. Nothing on celerfunding.com is an offer of credit or a commitment to lend, and CELER cannot promise approval, amount, speed or price. According to its terms, each lender sets its own approval criteria, rates, terms and timing.
CELER does not make credit decisions, so approval depends on the lender and your business facts.
Be cautious with anyone who promises certain approval or asks for upfront payment to release a grant or loan. USAGov says that if someone asks for money or personal information to get a grant or loan, it is probably a scam.
If you want to explore options, you can send CELER an enquiry. Meanwhile, prepare your financial statements and compare more than one lender.
Read the full terms for details.
Next: How we review answers
Related: How long can an SBA microloan run and what rates are typical?
Sources (read 2026-11-01): Current CELER terms; USAGov guidance
Does CELER offer personal or consumer loans?
No. CELER's terms say its services cover business financing only, and it does not offer consumer or personal loans.
If you are an individual looking for help with personal expenses, a grant is unlikely. USAGov says federal grants generally are not for personal expenses, and Grants.gov says none of its listings provide personal financial assistance. USAGov's benefit finder is the official place to look for personal programs.
For personal credit, speak to a licensed lender or a nonprofit credit counsellor, and check them with your regulator.
If you are self-employed and need money for a business, you can send CELER an enquiry, but the answer depends on the lenders, not CELER.
Next: How we review answers
Related: How long can an SBA microloan run and what rates are typical?
Sources (read 2026-11-01): Current CELER terms; USAGov guidance
Does CELER give legal, tax or investment advice?
No. CELER's terms say it does not give legal, tax, accounting or investment advice. Information on the site is general and educational, not a recommendation for your situation.
Many funding choices have legal or tax consequences. Selling shares can trigger securities rules, loans can involve personal guarantees, and incentives can be taxable. Use a qualified lawyer, accountant or adviser for those points.
CELER is also not a government agency, grant-maker or a partner of any government program. For a program's rules, read the official page.
Funding Q&As in this library carry a review status and a date read, so you can see how current each one is.
You can send CELER an enquiry if you want a referral, but it will not replace professional advice.
Next: How we review answers
Related: How long can an SBA microloan run and what rates are typical?
Sources (read 2026-11-01): Current CELER terms
What does creditworthy with a reasonable ability to repay mean?
It means the lender must be satisfied you can realistically repay the loan from the business's expected income. SBA's 7(a) eligibility list includes being creditworthy with a reasonable ability to repay.
SBA's guidance on bank loans says lenders typically expect a business plan, an expense sheet and multi-year financial projections. SBA's loans page adds that eligibility also looks at the business's income source, ownership and location, and that each lender lists its own requirements.
There is no single score for all lenders. SBA's page sets no specific credit score.
To prepare, assemble current financial statements, a repayment plan and details of existing debts. A lender may also look at the owners' credit.
This is general information, and the lender decides.
Next: Business funding
Related: Are there government grants to pay my personal bills or start a personal project?
Sources (read 2026-11-01): SBA lending; SBA 7(a) terms, conditions and eligibility; SBA funding guide; SBA loans overview
Can a business with bad personal credit still get SBA-backed financing?
Possibly, but nothing is assured. SBA's loans overview sets no specific credit score and says businesses with bad credit may still qualify for startup funding. The lender, not SBA, decides, and each lender lists its own requirements.
SBA 7(a) eligibility still requires that the business be creditworthy with a reasonable ability to repay. That is a judgment about the whole file, including cash flow, collateral and the owners' history.
If credit is a concern, ask a lender early what they would look at. A community lender or microloan intermediary may be open to a different mix of factors than a large bank.
Be wary of anyone promising certain approval for a fee. This page is general information and does not predict any outcome.
Next: US funding resources
Related: Does CELER offer personal or consumer loans?
Sources (read 2026-11-01): SBA loans overview; SBA lending
What are the main kinds of funding a small business can use?
The main kinds are your own money, loans, investor equity, crowdfunding and government programs. Each differs on who decides, what you repay and what you give up.
SBA's funding guide covers self-funding, venture capital, crowdfunding, bank loans, SBA-guaranteed loans and SBA investment programs. BDC adds quasi-equity, seller financing, leasing and lines of credit.
Grants exist but are narrower than many people expect. For example, SBA says it does not provide grants for starting or expanding a business.
Start by deciding what the money is for, how soon you need it and how much control you will accept giving up. Then compare offers on total cost, security and conditions.
This is general information, and nothing here predicts what you can obtain.
Next: Business funding
Related: What is the difference between a grant, a loan and a loan guarantee?; What is the difference between debt and equity funding?
Sources (read 2026-11-01): SBA funding guide; financing types
What can BDC financing be used for?
BDC's FAQ lists uses including business growth and expansion, buying or renovating commercial real estate, equipment, technology upgrades, cash flow needs, acquisitions or ownership transfers, and certified green building projects.
Eligibility is a separate question. BDC typically wants a business based in Canada that has operated about 12 months, with requirements ranging from 12 to 24 months by loan type, and it excludes several sectors. Those limits are in other answers here.
Security depends on the loan. Some loans need a personal or corporate guarantee instead of assets.
BDC financing is a loan you repay, not a grant, and BDC decides each case.
Before applying, write down the exact use of funds and the amount you need so you can match it to the right product.
Next: Canada funding resources
Related: What can a Canada Small Business Financing Program loan not be used for?
Sources (read 2026-11-01): BDC financing FAQ
Can a CSBFP loan put my personal assets at risk?
The program says personal assets cannot secure a CSBFP loan, but liability can still reach you personally in some structures. ISED's guidelines say sole proprietors and partners are liable for the whole loan and cannot limit liability to business assets.
Unsecured personal guarantees are capped at the original amount disbursed. Corporate guarantees have no limit. The guidelines allow limits on realizing against personal or non-business assets only through a loan-stage agreement, a limit on a judgment or a compromise settlement.
This is a summary and not legal advice, and wording changes over time. Ask your lender what guarantees and security it will take, and have a lawyer explain the document.
A corporation can separate you from some liability, but guarantees you sign still count.
Next: Canada funding resources
Related: What is quasi-equity or mezzanine financing?
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3
How much can I borrow under the Canada Small Business Financing Program?
As of 1 November 2026, the guidelines allow up to $1,000,000 in term loans per borrower and related borrowers. No more than $500,000 may be for non-real-property purposes, and within that no more than $150,000 for intangibles and working capital. A line of credit of up to $150,000 is separate from the term loan limit.
Registration fees count toward the limits. ISED's FAQ summarizes the maximum as $1.15 million, including up to $1 million for term loans and $150,000 for lines of credit.
Related borrowers that meet the program's independence test may each qualify for the full limits.
A lender decides what it will offer, and it may offer less. Check the current guidelines and ask lenders what they will actually lend.
Next: Canada funding resources
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3; CSBFP
Can a CSBFP line of credit be used for anything other than working capital?
No. Under the program guidelines, a line of credit is limited to working capital, which includes items such as inventory, payroll, rent and professional fees. It is capped at $150,000, separate from the term loan limit, as of 1 November 2026.
Term loans can cover real property, leasehold improvements, equipment, intangible assets and working capital, within limits.
Interest on lines of credit may be up to prime plus 5%, including the administration fee, and a 2% registration fee applies on the authorized amount.
If you need to buy equipment or improve premises, ask about a term loan instead. A lender decides, and a guaranteed program does not assure approval.
Compare the structure to a general working-capital line from the lender's own products.
Next: Canada funding resources
Related: Can a CSBFP loan put my personal assets at risk?
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3
Can I use a CSBFP loan to buy a business?
Sometimes, but not in every structure. The program guidelines treat buying certain business assets as eligible, including intangible assets such as going-concern goodwill, franchise fees, permits and licences, within limits.
However, share acquisitions and vendor take-back financing are excluded uses. ISED's FAQ also says assets acquired by a holding company cannot be financed, and holding corporations are ineligible borrowers.
That means an asset purchase through an operating company may fit better than a share purchase, but the details matter and a lender must agree. Intangibles and working capital together are capped at $150,000 within the term loan limits.
Seek advice from a lawyer and an accountant before choosing a deal structure. Other financing, including BDC or conventional lenders, may suit acquisitions better.
Next: Canada funding resources
Related: What does a company have to file when it raises money through Regulation Crowdfunding?; What are the main kinds of funding a small business can use?
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3; CSBFP
Can a CSBFP loan refinance my existing business loan?
No. As of 1 November 2026, the program guidelines list refinancing existing term loans or conventional lines of credit as an ineligible use.
The program is aimed at financing new assets and working capital. For example, eligible uses include equipment, leasehold improvements, real property and working capital, within the limits.
SBA's 7(a) program is different. Its page lists refinancing current business debt as an eligible use, subject to the lender's and SBA's rules.
If you want to consolidate debt in Canada, ask your bank or a lender about conventional options, and compare the total cost including fees and any early-repayment charges.
This is general information and the lender makes the decision.
Next: Canada funding resources
Related: What is a Notice of Funding Opportunity and why does it matter?
Sources (read 2026-11-01): ISED guidelines, sections 2.2–2.3; SBA lending
What is loan-to-value, and why won't a lender lend 100 percent of an asset's value?
Loan-to-value (LTV) is the share of an asset's estimated value that a lender will lend against it, and it is always less than 100 percent.
BDC says asset-based loans never total 100 percent of the estimated value of the pledged asset. The gap, called the margin, is kept to recover liquidation costs if the lender must sell the asset. More liquid assets get a higher LTV: BDC gives examples of up to 90 percent of a marketable security's face value, 75 percent for residential real estate and 60 percent for commercial real estate. Loans backed by very liquid assets generally have lower interest rates and more flexible repayment.
Those are BDC's examples, not a quote; each lender sets its own rates. Pledging means agreeing to hand the asset over if the loan cannot be repaid in cash.
Ask a lender how it values your asset and what LTV applies. This is general information.
Next: Funding basics answers
Related: What is asset-based lending?
Sources (read 2026-11-01): What is asset-based lending (ABL)
What happens to taxes if part of a business loan is forgiven?
In the US, a forgiven loan amount is generally included in the business's gross income unless an exclusion applies.
The IRS says loan proceeds are generally not income when received. When a government forgives all or part of a loan, the forgiven amount is generally included in gross income unless an exclusion in section 108 of the tax code or another federal law applies. If an exclusion applies, related deductions, basis or other tax attributes may need to be reduced.
A "forgivable loan" is one where the lender agrees in advance to cancel the balance if listed conditions are met, so read those conditions closely. This page did not source a general definition, and it does not cover Canadian tax rules.
Program terms decide what counts as forgiveness. Closed programs such as PPP should not be treated as open. Ask an accountant how your own case is taxed. General information, not tax advice.
Next: Tax answers
Related: Is a tax credit or deduction the same as a grant?; What is the difference between a conditionally repayable and an unconditionally repayable contribution?
Sources (read 2026-11-01): CARES Act Coronavirus Relief Fund frequently asked questions
Is a tax credit or deduction the same as a grant?
No. A tax credit and a deduction reduce your tax bill, while a grant is money paid to you for a purpose.
The IRS explains the difference this way: a credit is an amount you subtract from the tax you owe, and a deduction is an amount you subtract from your income so you do not pay tax on it. Both are claimed when you file a return. The IRS also notes that recent legislation may have changed the credits and deductions it lists, so check current rules.
That means a credit cannot be received as an upfront payment, and you generally need tax to owe or a refundable feature. Some rules allow certain organizations to be paid for credits; that varies by credit.
It also means a tax incentive should not be described as a grant. Compare it with a grant by asking when you receive the benefit, what you must spend first and what records you must keep. General information, not tax advice.
Next: Tax answers
Related: What happens to taxes if part of a business loan is forgiven?
Sources (read 2026-11-01): Credits and deductions for businesses
What is the difference between a convertible note and a SAFE?
A convertible note is a loan that can convert into equity, while a SAFE is an agreement to give future ownership if a triggering event happens.
The SEC's small business office describes a convertible note as a loan from an investor that can convert into a different security, typically preferred stock when the next funding round closes or other agreed conditions occur. A SAFE (simple agreement for future equity) promises the investor a future ownership interest if triggers occur, such as an equity financing or an acquisition. The holder has no ownership interest unless a trigger converts it. A SAFE generally does not set a valuation at issue; it defers that to the trigger.
Both are often used in seed rounds. The SEC document is a staff resource, not a rule, and it does not define angel investors.
These are securities. Selling or buying them raises legal issues that differ by country, so get a securities lawyer. Information only; CELER does not offer investments.
Next: Funding basics answers
Related: What is loan-to-value, and why won't a lender lend 100 percent of an asset's value?
Sources (read 2026-11-01): What different types of securities are issued to startup investors?
What is an APR and why can it differ from the interest rate?
An APR is a broader measure of borrowing cost than the interest rate, because it includes certain fees and charges as well as interest.
The US Consumer Financial Protection Bureau explains this for mortgages: the interest rate is the yearly cost of the money as a percentage and does not reflect fees or other charges, while the APR also reflects points, broker fees and other charges you pay to get the loan. That is why an APR is usually higher than the interest rate. This source is about home loans, so it only illustrates the idea for business finance.
In California, commercial financing providers must disclose an estimated annual percentage rate and other cost details for covered products, including factoring and merchant cash advances.
When comparing offers, ask for the APR or total repayment amount, all fees and prepayment terms in writing. Do not assume other places require the same disclosure. General information only.
Next: Funding basics answers
Related: What is asset-based lending?
Sources (read 2026-11-01): What is the difference between a mortgage interest rate and an APR?; DFPI commercial financing disclosure regulations effective Dec 9, 2022
What is the difference between a conditionally repayable and an unconditionally repayable contribution?
Unconditionally repayable means you repay no more than you received on a fixed schedule; conditionally repayable means what you repay depends on conditions and may be more or less.
In the Strategic Response Fund, Innovation, Science and Economic Development Canada explains that unconditional repayments follow a predetermined schedule after a grace period, typically yearly, and total no more than the nominal amount paid. Conditional repayments depend on verifiable conditions, such as audited gross business revenues, so repayments can rise as revenue grows, and final amounts are typically unknown until a condition occurs. A contribution can combine both.
That page is one program's description. Other programs set their own terms in the contribution agreement, and the page does not list every trigger.
A repayable contribution is not a grant. Before accepting, read the repayment schedule, the conditions and the default terms in your agreement. General information.
Next: Canada funding resources
Related: What happens to taxes if part of a business loan is forgiven?
Sources (read 2026-11-01): Strategic Response Fund: funding amounts and conditions
What is asset-based lending?
Asset-based lending is a loan or line of credit secured by business assets such as inventory, equipment or accounts receivable.
The US Small Business Administration describes it as credit issued to a business that is secured by collateral. You borrow against the assets without selling them, but the lender can take them if you stop paying. BDC says the loan is granted primarily on the value of the pledged assets, which helps when a business cannot easily show it can carry extra debt from cash flow.
SBA lists upsides: it can be easier to qualify, funds can be used for any business purpose, and available credit can grow as asset values rise. Downsides: only high-value assets that convert easily to cash are accepted, underwriting and ongoing monitoring cost more, and default can mean losing the assets.
Terms vary by lender. Ask about the advance rate, fees and monitoring. General information, not a product offer.
Next: Funding basics answers
Related: What is loan-to-value, and why won't a lender lend 100 percent of an asset's value?
Sources (read 2026-11-01): Asset-based lending: what is the upside and downside?; What is asset-based lending (ABL)
Can I count the same donated services or cash as match on two federal awards?
Generally no. Under 2 CFR 200.306, a contribution can count as cost sharing only if it is not included as a contribution for any other federal award.
The rule lists tests for accepting cash or third-party in-kind contributions as match. They must be verifiable from your records, necessary and reasonable for the project, allowable under the cost principles, and provided for in the approved budget when the agency requires it. They also must not be paid by the federal government under another federal award, unless the authorising statute specifically allows federal funds to be used for matching.
Third-party in-kind contributions are non-cash property or services donated by non-federal parties at no charge. Grants.gov defines cost sharing as the part of project costs not paid by federal funds.
This is the 2024 edition for US federal awards. Individual programs add rules, so check your notice of funding opportunity. General information.
Next: Funding basics answers
Related: What is loan-to-value, and why won't a lender lend 100 percent of an asset's value?
Sources (read 2026-11-01): 2 CFR 200.306 Cost sharing or matching (2024 edition); Grant terminology (Grants.gov)
What CELER is and is not. celerfunding.com is operated by Celer Merchants Corporation. We are not a lender, grantmaker, government agency, investment portal or licensed adviser, and we are not an official partner of the programs mentioned here. This page is general information, not legal, tax, investment or credit advice. A CELER enquiry is not an official grant or loan application.