It’s not easy to find a business loan this large online — especially an unsecured one –since many online business lenders only offer up to a maximum of $500,000 in financing. You may need to head to your local bank or credit union and inquire about the CSBFP loan program or other large financing options.
Canada Small Business Financing Program (CSBFP). These loans can be applied for through a chartered bank, credit union or a caisse populaire and are at least 75% backed by the Government of Canada. Your business must make under $10 million in revenue annually to be eligible for this program. You can access up to $1,000,000 in funding, but you’ll need to be a for-profit business, use the loan funds for specific approved purposes, earn less than $10 million in revenue annually and operate a business in Canada.
Banks. Although all of Canada’s major banks can help you apply for a CSBFP loan, Scotiabank offers its own in-house business loans of up to $1 million and BMO offer commercial mortgages of up to $1 million to buy or refinance business real estate.
Online lenders. You may be able to find an online lender offering $1,000,000 – but it’s unlikely. If you do, you’ll likely need an annual revenue of at least $200,000, a good to excellent credit score and have been in business for a couple of years at minimum.
With $1 million on the line, you can count on your application being more involved than one for a smaller business loan. You might be required to submit additional documents, and it usually takes longer for lenders to verify your business’s creditworthiness. If your business needs quick funding, consider applying for a smaller amount.
What does it take to get a $1 million business loan?
Your business needs to prove it can afford to take on such a hefty debt load to get a $1 million business loan. While requirements vary by lender, you’ll typically need to meet the following requirements to be considered:
Credit score. You’ll likely need to have a good to excellent personal credit score. The higher your credit score the better, otherwise your business might end up paying a higher interest rate – if it’s approved at all.
Time in business. To get a loan this large, you’ll likely need to have been in business for at least two years. Some lenders may approve businesses that have been operating for at least a year – but you may need a higher annual revenue.
Annual revenue. To qualify for the Canada Small Business Financing Program (CSBFP), you’ll need to have an annual revenue of less than $10 million. That said, there will be a minimum annual revenue required in order to ensure you can pay back the loan. Minimums may sit between $100,000 to $300,000, or higher.
Be profitable. On top of having a strong annual revenue, many lenders also want to see that your business is actually making money rather than merely breaking even. This helps ensure that you’ll be able to pay back your loan.
Make a personal guarantee. Many business loans require the owner (or owners) to back the amount they’re borrowing with a lien on their personal assets. This means that you and your business partners will likely need to have $1 million in equity on your homes, cars and other investments.
Loan uses. While online lenders may allow you to use your business loan for any legitimate purpose, loans under the CSBFP must be used for: purchasing or improving land or buildings, purchasing new or existing renovations to the location, or purchasing or improving new or used equipment.
How hard is it to get a $1 million business loan?
It all depends on you and your business. If you meet the requirements for a loan through the Canada Small Business Financing Program (CSBFP), then the outcome of your application ultimately depends on whether or not your financial institution approves you.
If you don’t meet the requirements of a CSBFP loan, then finding a lender – whether that’s online or through your bank – that will offer a loan of $1,000,000 may be much more difficult. You may need to meet more stringent eligibility requirements than you would through the Canada Small Business Financing Program (CSBFP).
Steps to get a $1 million business loan
Major banks may offer loans of up to $1,000,000 for qualifying businesses, but you can also turn to the Canada Small Business Financing Program (CSBFP) to get this type financing on competitive terms. Although each lender has its own process, these steps can serve as a general guide to finding the right loan option for your business:
Compare lenders. Your first step should be to compare business loan lenders. Not every lender offers loans of $1 million, and those that do will have different requirements that could make the difference between approval and rejection.
Prepare financial documents. Lenders want to see your business plan, annual revenue projections, bank statements, tax documents and other information that demonstrates your business’s ability to repay a loan.
Speak with a financial advisor. Loop a financial advisor into your plan for a $1 million business loan to ensure your business can afford it and develop a plan to repay it.
Apply for preapproval. This allows you to see your loan’s potential terms before your personal or business credit is officially checked. Not all lenders offer preapproval, but if it’s available, take advantage of it.
Review and sign the loan contract. If approved, review your loan contract with your partners and financial advisor to ensure the terms are beneficial for your business.
Compare providers that offer business financing in Canada
We don’t currently have any lenders on Finder offering business loans in amounts up to $1,000,000. If you’d like to compare business loans in amounts up to $500,000, you can do so in the table below.
Costs to pay back a $1 million business loan
While $1 million business loans tend to come with longer terms — typically between 5 and 25 years — monthly repayments tend to be high. Interest rates can also be lower since it’s based on a much larger sum. Online lenders will typically charge higher interest rates than financial institutions do through the Canada Small Business Financing Program (CSBFP), so you may want to apply for a CSBFP loan if you’re eligible.
An an example, let’s say your business qualified for a business loan of $1 million with an APR of 7% and a term of 10 years. It’d have monthly repayments of $11,610.85 and pay a total of $393,301.75 in interest and fees.
Canada Small Business Financing Program (CSBFP) costs
You may incur the following fees through the CSBFP:
Fees. You’ll face a 2% registration fee, plus the lender may charge any fees that they would typically charge for a conventional loan of the same amount.. The registration fee can be financed as part of the loan and paid back over the life of the loan, while any lender fees are paid directly to the lender and cannot be financed under the loan.
Interest rate.Interest rates can be variable or fixed. For a variable rate, the maximum chargeable rate is the lender's prime + 3%. For a fixed rate, the maximum is the lenders' single family residential mortgage rate + 3%.
Secured vs. unsecured business loans
Since it’s such a high amount of money, many $1,000,000 business loans require some sort of collateral. If your business needs funds to cover the cost of new equipment or real estate, you’ll typically secure the loan with the new purchase. You may also be able to find working capital loans for $1 million backed by the value of your business’s unpaid invoices through invoice factoring.
Even unsecured loans often require a personal guarantee or a lien on your business’s assets. They’re still considered unsecured because they don’t use a specific item as collateral. Instead, you or your business are responsible for coming up with the funds to pay off the loan balance if your business folds.
Secured business loans
Backed by a specific asset worth the loan amount.
Includes real estate and equipment loans.
Easier to qualify for than unsecured loans.
More competitive rates.
Unsecured business loans
Less risk for business owner.
Might require a lien on personal or business assets.
Tougher eligibility requirements.
Less competitive rates.
Business loan calculator
If you have multiple loan or refinancing offers on the table and aren’t sure which one to choose, it can help to calculate the total cost of each loan option:
How do I use the business loan calculator?
To determine how much your business loan will cost you, simply fill out the following fields in the calculator:
Loan term and amount. Select how long you need to repay the loan and enter the amount you intend to borrow.
Bank name. Enter the names of your lenders.
Fixed rate and period. If your loan comes with a special introductory fixed rate, enter the rate and how long the intro period lasts.
Ongoing rate. Enter the ongoing rate you’ll pay for your loan here.
Upfront fees. If your loan has an origination or application fee, add it here.
Fees. If the loan comes with any ongoing fees, you’ll need to add them here and select how often they’re charged.
Prepayment penalty. If you’re charged a prepayment penalty for paying off your loan early, enter the amount here.
Calculate. Click the Calculate button to see which lender costs less and each lender’s fixed, ongoing and total repayments.
If a section in the calculator doesn’t apply to you, leave it blank. You can adjust the loan amount, term length and any other variables to help you get an accurate idea of how much you can borrow and what sorts of terms to look for when applying with different lenders.
Business loans of $1 million aren’t easy to find – or qualify for if you’re a new business. If you’re eligible for the Canada Small Business Financing Program (CSBFP), you may have an easier time getting approved for $1,000,000. If you’re not eligible, you can try to find an online lender willing to offer $1 million, or you can take out a smaller loan amount to cover essential costs in the meantime.
Remember that getting approved for a $1,000,000 loan will take longer than getting approval for a smaller loan amount. So if you’re looking for quick funding, a 1 million dollar loan may not be the way to go. To find and compare lenders offering up to $500,000 or to learn about your other financing options, check out our business loans guide.
It’s possible, though it might not be cheap or easy to find a lender willing to offer that amount. Typically, you need good to excellent credit to qualify for the CSBFP, as well as for loans from lenders willing to lend up to $1 million.
Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog.
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