Business borrowing in the U.S. and Canada

The principle

U.S. and Canadian businesses can encounter term loans, revolving lines, equipment finance, and receivables products. Public support programs differ: U.S. SBA programs are separate from Canada’s Small Business Financing Program and BDC financing. A provider’s cross-border brand does not establish that the same product is available to every entity.

Put it into practice

Identify which entity earns the revenue, owns the assets, signs customer contracts, and needs the funds. Prepare financial statements in a clearly stated currency. If borrowing and operating cash flow use different currencies, model how exchange movements affect payments and coverage rather than converting only on the application date.

What people often miss

Guarantees, security registration, disclosures, tax treatment, and legal documentation require jurisdiction-specific review. A Canadian parent with a U.S. subsidiary may need a more complex structure than a domestic borrower. Verify current program rules directly and obtain appropriate professional advice for cross-border obligations. Do not submit a foreign entity under a domestic program merely because the owner lives there.

Map the entities before comparing programs

Identify the legal borrower, operating locations, ownership structure, and location of the assets being financed. Selling to customers across a border does not, by itself, establish eligibility for the other country's programs. SBA and CSBFP are separate systems with separate requirements.

Keep each entity's financial statements and obligations identifiable. If one company receives the funds while another owns the asset or earns the revenue, make that structure visible early. The lender and advisers need to assess the proposed arrangement rather than infer it from a consolidated total.

Model currency and security separately

Translate cash available and debt payments into a common currency before comparing them. Then test a less favorable exchange rate. Specify whether revenues, supplier bills, and debt payments naturally offset each other or leave a currency mismatch.

Ask which jurisdictions govern guarantees and security, and which local registrations or legal opinions are required. Do not assume a US filing and a Canadian registration are interchangeable, or that one province's procedures describe the entire country.

Ask your broker

• Which entity and location does each eligibility rule assess?
• What happens to payments under an adverse currency scenario?

Your next-step checklist

• Exact borrower and operating locations
• Asset ownership and revenue entity
• Borrowing and repayment currencies
• Current domestic program and cross-border requirements