BMO Small Business Loan review
- Loan Amount
- $100,000 - $250,000
- Minimum Revenue
BMO offers several different types of loans including installment, line of credit and commerical loans. Since BMO is one of the Big Five banks, interest rates are competiitive, but eligibility requirements will be more strict than an unconventional lender. You can't apply for a BMO business loan online so you'll need to visit a branch in person.
Best for: Business owners looking to borrow larger amounts from a Big Five bank.
Large loan amounts
Long loan terms
Different financing options
No online application
Interest rates not listed online
What is BMO?
BMO (also known as the Bank of Montreal) is a reputable multinational bank based in Canada. It has over 900 branches across the country and provides banking services to millions of loyal customers.
The major benefit of BMO is that it offers several small business loan options and lets you borrow up to $500,000 at a time. The downside is that you have to apply for a business loan in-person at a branch location and there are no interest rates listed online.
First, do I qualify?
You may be able to qualify for a BMO Small Business Loan if you can prove that you meet certain eligibility criteria. These criteria aren’t listed on the company website, but likely include being able to demonstrate that your business makes enough money to pay your loan back on time.
You’ll also typically have to prove that you have a high credit score and your business has been operational for a significant amount of time. There could also be other requirements that you may have to fulfill depending on how much you borrow and how you want to use your funds.
How does a BMO business loan work?
There are several BMO Small Business Loan that you can apply for based on your financing needs. These include small business installment loans and Canada Small Business Financing Loans.
BMO Small Business Installment Loan
BMO offers Small Business Installment Loans that let you borrow up to $250,000 with a simple application. These loans come with fixed or floating interest rates and you can sign up for variable term lengths that can last up to 15 years.
If you want to qualify for more money, you may be able to apply for up to $500,000 with an Installment Loan Plan (ILP). This will let you borrow money on a longer term, with a range of flexible repayment and amortization options.
You may also be able to apply for a US currency loan if you’re looking to borrow less than $100,000. This will let you take out funds in US dollars and avoid paying a high exchange rate when you spend money across the border (though you may have to pay the exchange when you repay your loan unless you have a source of US revenue).
Canada Small Business Financing Program (CSBFP) Loan
BMO‘s Canada Small Business Financing Loan lets you borrow money that’s backed by the Canadian government. You may be able to qualify for up to $1,000,000 to finance business real estate or up to $350,000 for leasehold improvements and equipment.
This loan has a 2% registration fee, plus the lender may charge any fees that they would typically charge for a conventional loan of the same amount. You’ll have to personally guarantee up to 25% of the amount you borrow. You’ll also only be eligible to apply if your business makes less than $10 million per year.
What makes BMO Small Business Loans unique?
BMO business loans are unique because they’re financed by a Big Five Canadian bank. This means that you can expect a high level of customer service and stringent policies to govern how your loan is managed.
BMO also offers several different types of small business loans to fit every set of business needs. These include US dollar loans up to $100,000, government-backed loans up to $1 million and small business installment loans worth up to $500,000.
What other types of business financing can I get with BMO?
If an installment loan doesn’t make sense for you, you might like to check out other financing options that might be available to you. These include the following:
- Line of credit. Access revolving funds and only pay interest on the money you use with a BMO line of credit.
- Commercial loan insurance. Qualify for up to $1 million in benefits to protect your business and cash flow during emergencies.
What are the benefits of a BMO Small Business Loan?
Flexible loan options. You can apply for a small business loan sponsored by the bank or the Canadian government, depending on what you need to borrow money for.
- Large amounts. You’ll be able to apply for up to $250,000 and $1 million, based on what type of loan you’re interested in.
- Fixed or variable interest rates. You’ll have the option to choose whether you want a fixed or floating rate, depending on your budget.
- Long terms. You could have the option to pay your loan back over a long term (up to 15 years‘ amortization).
- Other financing options. You may be able to qualify for other forms of financing such as a line of credit or commercial loan insurance if you’re not sure about a business loan.
What to watch out for
- No online application. It’s not possible to fill out an application online, so you’ll need to visit a branch to set up your loan.
- Interest rates aren’t listed online. There are no interest rates listed online which makes it difficult to compare quotes from several providers.
- May need to secure your loan. You may need to put up collateral like your home, vehicle or business assets to secure your loan.
- Bad credit not accepted. You likely won’t be accepted if you have bad credit unless you can secure your loan or bring down the risk of lending to you in another way.
- Poor customer reviews. There are several negative reviews that customers have left about BMO‘s services online, though these aren’t specific to its business products.
Compare with other business loans
How much will my loan cost me?
Your loan will cost you different amounts based on what type of loan you take out. Your interest rates will also be influenced by personal factors such as your credit score, whether you have assets to secure your loan and how long you need to pay your loan back.
That said, there’s very little information about what BMO charges for its interest rates online. Your best bet for finding out how much you’ll have to pay will be to book an appointment at the bank to speak to an agent about your personal financial situation and loan options.
You could be required to pay extra fees to secure financing, depending on what type of loan you take out. These fees aren’t listed on the BMO website, so you’ll need to make sure to check in with a BMO rep to find out more about how much you’ll have to pay.
How do I apply?
If you’ve done your research and you think a BMO business loan is the right fit for you, there are a couple of steps you’ll need to follow to get started:
- Book an appointment. You’ll have to start by booking an appointment with a BMO representative at a physical branch.
- Collect the necessary paperwork. You’ll likely be asked to bring certain documents to your appointment, such as statements of your annual revenue.
- Fill out an application. You’ll work with a BMO rep to fill out your application in full. It will take some time for it to be processed.
- Negotiate the terms for your loan. You may need to negotiate with BMO to get the rates you want for your loan (which could include putting up assets or signing up with a guarantor to bring your rates down).
What happens after I apply?
BMO will review your application and make a decision. Since it doesn’t accept online applications, it could take several weeks for BMO to fully process your information. That said, for applications that aren’t overly complicated, you should have a decision within a couple of days.
I got the loan. Now what?
As soon as your loan is approved, you’ll be able to spend the money you take out on whatever business expenses you want. From there, you’ll be required to start making repayments on your loan through automatic withdrawals from your bank account.