Best Business Loans for Fair Credit in 2021 | Finder Canada

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Best business loans for fair credit

Lenders won't reject you outright just because you don't have the best score.


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Businessman using a laptop
If your credit score falls between 560 to 659, your business loan options are slightly more limited than those with good or excellent credit. However, these lenders offer clear terms and a wide variety of loans to help you finance the next phase of your business.

Best business loans for fair credit

Best for quick financing: OnDeck Business Loan

Min. Credit Score
Starting APR
Loan Amount
OnDeck Canada provides fast and affordable business loans in Canada. You can borrow anywhere from $5,000 to $300,000 with terms lasting from 6 - 18 months. You’ll have to repay the amount you borrow with fixed daily or weekly amounts, and your interest rates will range from 8.00% – 29.00%. The interest you’ll have to pay will depend on a number of factors like the state of your credit, how much you borrow and the length of your term.
Min. Loan Amount $5,000
Max. Loan Amount $300,000
APR 8.00% – 29.00%
Interest Rate Type Fixed
  • Quick financing (get cash in as little as 24 hours).
  • Large loan amounts.
  • No collateral required to qualify.
  • Several loan types.
  • Less competitive interest rates.
  • Minimum credit score of 600.
  • Businesses less than six months old won’t qualify.

Best for easy access to multiple lenders: Loans Canada Business Loan

Min. Credit Score

Starting APR
Loan Amount
Loans Canada makes comparing multiple lenders easy with a single, streamlined application process. Simply provide some personal information and details about your business, then get matched with a list of lenders who will contact you to discuss your loan options. Loan types vary with amounts ranging from $2,000 to $350,000, and terms of up to 5 years. Interest rates vary based on your credit score, how long you've been in business and other factors.
Min. Loan Amount $2,000
Max. Loan Amount $350,000
APR Prime Pricing from 9.00%, Long term financing from Prime + 2.00%
Interest Rate Type Fixed
  • Access to multiple lenders through a single application
  • Personalized loan options based on your business's needs
  • Loans for a wide variety of credit scores, even bad credit
  • Available in all provinces
  • Must have at least $50,000 in annual revenue
  • Must have been operating for at least 100 days
  • Not suitable if you want to borrow small amounts under $2,000

Best for flexible repayment options: iCapital business loan

Min. Credit Score
Starting APR
Loan Amount
iCapital business loan offers lines of credit, merchant cash advances, secured business loans and term loans for Canadian businesses that have been in operation for at least 6 months and have a minimum income of more than $100,000 (or 5,000 for merchant cash advances for merchant cash advances). All types of credit are acceptable as long as businesses don't have any open bankruptcies. Weekly, biweekly and monthly repayment schedules are available for secured business loans. There are no early repayment fees for term loans.
Min. Loan Amount $5,000
APR Varies
Interest Rate Type Fixed
  • Flexible credit score requirement. Businesses with below-average credit and no open bankruptcies can apply.
  • Multiple financing options available to suit different business needs.
  • Flexible repayment plans available.
  • No early repayment fee for term loans.
  • Must have annual gross sales over $100,000 or 5,000 for merchant cash advances.
  • Must have been in business for at least 6 months (not suitable for startups).
  • Some types of businesses are not eligible: construction companies, funeral homes, furniture stores, jewelry stores, cheque cashing businesses and home-based businesses

Best for merchant cash advances: Merchant Growth Business Loan

Min. Credit Score
Starting APR
Loan Amount
A Merchant Growth Business Loan provides alternative financing in the form of an advance on your future sales. A loan amount is determined based on your businesses profile and sales history. If approved, funds are advanced in as little as 24 hours and repaid by a percentage of your sales over time - usually between 1.25x - 1.25x. Both flexible and fixed repayment options are available. There is no penalty for paying off your loan early.
Min. Loan Amount $5,000
Max. Loan Amount $500,000
APR 12.99% to 39.99%
Interest Rate Type Fixed
  • Applicants with varying credit scores are accepted. Eligibility is based on a wide variety of factors, especially your sales history.
  • Repayment terms are just an estimate. You won't be penalized if sales fluctuate and it takes longer to repay the loan.
  • No early repayment penalty.
  • E-commerce businesses can qualify for financing.
  • Only suitable for business that make regular daily or weekly sales.
  • Minimum of 6 months in business
  • Your withholding (or repayment) percentage cannot be changed once funds have been disbursed.

How we picked the best business lenders

These lenders represent some of the more flexible and transparent options available to borrowers with fair credit. To compile our list, we considered the loan types available, minimum and maximum APR, repayment terms and the loan amount.

Other business loans you can apply for today

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
SharpShooter Funding Business Loan
Fee based, Prime pricing starting at 9.00%
$500 - $500,000
6 months - 5 years
$10,000 /month
24 months
Unsecured Term, Merchant cash advance
SharpShooter Funding offers loans up to $500,000 for small business owners who have been business for at least 2 years and can show a minimum of $10,000 in monthly deposits.

Who it might be good for: Business owners looking for a fast and simple application process.
Merchant Growth Business Loan
12.99% to 39.99%
$5,000 - $500,000
3-12 months
$10,000 /month
6 months
Unsecured Term, Line of credit, Merchant cash advance
Merchant Growth offers loans up to $500,000 for small business owners who have been business for at least 6 months and can show a minimum of $10,000 in monthly sales.

Who it might be good for: Business owners looking for flexible financing options.
Loans Canada Business Loan
Prime Pricing from 9.00%, Long term financing from Prime + 2.00%
$2,000 - $350,000
3 months - 5 years
$4,166 /month
100 days
Unsecured Term, Secured Term, Line of credit, Merchant cash advance, Equipment financing
Loans Canada connects Canadian small business owners to lenders offering up to $350,000. Borrowers must have been in business for at least 100 days, have a credit score of 410+ and show a minimum of $4,166 in monthly deposits ($50,000/year).

Who it might be good for: Business owners looking to use a broker to compare different financing options.
OnDeck Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
$10,000 /month
6 months
Secured Term, Line of credit, Merchant cash advance
OnDeck offers loans up to $300,000 for small business owners working in approved industries who have been in business for at least 6 months with a minimum monthly revenue of $10,000.

Who it might be good for: Business owners looking to receive funds in as little as 24 hours.

Compare up to 4 providers

Where can I find a lender that accepts fair credit?

If you have fair credit, you may be able to qualify for a business loan from a variety of lenders.

Online lenders

Lenders that operate online offer a wide range of loans for borrowers with fair credit. These include standard term loans and lines of credit — with rates comparable to banks — and short-term options like invoice financing, invoice factoring and merchant cash advances.

Because of all the options available, it’s important to compare lenders carefully. Fortunately, online lenders typically have lower credit requirements and are more lenient than banks, which can make it easier to qualify for a loan with fair credit.


Some banks accept business owners with fair credit — provided they have an established credit history. Rates at banks are generally lower, and you may have access to experienced bankers that understand your industry.

But most banks require you to have a chequing account or visit a branch to apply. You’ll also need to meet other strict requirements to qualify, so expect the process of applying with a bank to take longer than an online lender.

Credit unions

Local and regional credit unions generally offer term loans to business members, although you may find other options with your credit union. Requirements tend to be more lenient than banks, but you will still need to meet a minimum credit score to apply.

And like banks, you may need to fill out your paperwork at a branch — though more and more credit unions are moving their initial application process online. Rates are also competitive, but you will need to become a member to qualify for most financing options.

Alternative lenders

Alternative lenders should be used as a last resort if you or your business are unable to qualify for a loan from another source. Because of the fixed-fee structure, alternative loans require daily repayments and may be much more expensive than other loan options. You should consider an alternative business loan carefully before borrowing.

How do I get a business loan with fair credit?

You can improve your chances of approval by keeping these points in mind:

  1. Develop a business plan. You should be able to demonstrate why you need funding through a strong business plan. It should show a lender that you know how your funds will be used and how you plan on repaying what your business borrows.
  2. Check your credit report. If there are any mistakes on your credit report, you should have them fixed before applying for a business loan — especially if your payment history is incorrect.
  3. Gather your paperwork. Lenders want to see tax returns and proof of revenue at minimum. Each application process is different, but you can check with your lenders to ensure you have the documents you need before you apply.
  4. Pick the right time. If you’re able, apply during your busy season when you have a few months of strong revenue. This will show your lender that your business is doing well.
  5. Prequalify — if possible. Not all lenders offer a prequalification option. But if you can, check your rates with your top choices to avoid a hit to your credit.

Once you have a few prequalification offers, compare the APR, payment schedule and terms to choose the best choice for your business.

6 alternatives to fair credit business loans

These alternatives won’t fault you for having fair credit. But some choices can be expensive for businesses with low revenue.

  • Short-term business loans. Short-term business loans are an expensive alternative to term loans. However, borrowers with fair credit may qualify for lower rates. So if you don’t qualify for a traditional term loan, a short-term business loan could be a good alternative.
  • Equity financing. Equity financing involves selling partial ownership of your company to an investor. This can take multiple forms, including crowdfunding. Under some circumstances, your investor’s good credit could improve your chances of qualifying for a business loan later.
  • Grants. There are federal, provincial and private grants available to businesses that work in specific sectors, employ specific groups of people or serve underserved communities. Your credit score won’t matter since you don’t have to repay your grant funds.
  • Business credit cards. These can be used to finance smaller purchases if your business can handle the high APR. There are even business credit cards for owners with fair credit that may be easier to qualify for.
  • Personal loans. As a last resort, there are personal loans you can qualify for with fair credit. These won’t offer the best rates, but they can often be used to finance your business.

What should I do if I was denied a business loan?

Your lender should provide information on why you weren’t approved for a loan. Revisit your application and ensure neither you nor your lender made any mistakes. If everything is correct, review the reason you were rejected. Even if you meet a lender’s minimum credit requirements, your business’s revenue and financial history may not meet the lender’s standards.

Rework your application and business plan to suit the feedback you received. If the problem is with your revenue, sales or other metrics, it may be better to consider alternative sources of financing — including short-term business loans, personal loans or business credit cards — which may be easier to qualify for.

Bottom line

Fair credit won’t stop you from qualifying for one of these top business loans. But you should still explore your full range of options to ensure you’re making the right financial move for your business. Learn more about how to improve your business credit here.

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