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Get a business line of credit to fund ongoing expenses

Getting a business line of credit in Canada gives you access to cash for your business that you can pay back at your own pace.

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
Swoop Funding Business Loan
4.00% - 25.00%
$1,000 - $5,000,000
3 - 60 months
$10,000 /month
24 months
Term, MCA, LOC & more
To be eligible, you must have been in business for at least 24 months and have a minimum of $100,000 in annual revenue.

Swoop partners with banks and alternative lenders to match your business with the right funding options. Register for free and browse your offers without affecting your credit score.
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
To be eligible, you must have been in business for at least 6 months with a minimum monthly revenue of $10,000.

OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
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When you find that your operating expenses are increasing faster than your revenue, you may need quick access to cash. In this case, you might consider a business line of credit, which gives you access to a revolving line of credit that you can use for ongoing expenses or when business emergencies arise.

What is a business line of credit?

A line of credit for business allows you to borrow funds up to a predefined credit limit, and only pay interest back on the money you borrow. This flexibility means you can draw and repay your loan at your business’s base, similar to a credit card.

Most lenders allow you to make multiple draws — although there may be a fee for each one — and interest rates tend to be much lower than similar cards. This allows you to access the amount your business needs without forcing you to pay interest on the money you don’t use. And since many lines of credit are revolving, you’ll have access to your full line of credit as you repay.

This added flexibility is what makes a business line of credit valuable and practical for business owners. You can use your loan funds for just about any business expense, like buying inventory or covering an unexpected expense, and most lines in Canada are available from $10,000 to $100,000 although some can be as high as $500,000. The interest and fees you pay will depend on your lender, so compare your options before committing to a lender.

Our full guide to what is a business line of credit

Where can I get a business line of credit in Canada?

Whether it’s one of Canada’s Big Five banks or an online financial institution, you have many places to look for a business line of credit in Canada. In the table below we’ve gathered together some information on business lines of credit available at some popular financial institutions in Canada.

Where to get a business line of creditKey features
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OnDeck Business Loan

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  • This private lender offers business loans from $5,000 to $300,000, while the maximum line of credit available is typically $50,000
  • Interest rates offered typically range between 8.00% – 29.00%
RBC logo

RBC: Royal Business OperatingLine of Credit

  • Minimum line of credit funding starting at $10,000
  • Any amount borrowed from your line of credit will be automatically repaid at the end of each business day from your everyday operating account
CIBC Logo

CIBC: Business line of credit

  • Business lines of credit available starting at $10,000
  • Offers a variable interest rate of CIBC Prime Rate + some amount (like Prime+4.5%)
Scotiabank icon

Scotiabank: Credit Line for business

  • Limit of up to $1,000,000 on an unsecured business line of credit
  • Interest rates are variable and linked to Scotiabank’s prime lending rate
BMO logo

BMO: Credit Line for Business

  • Can borrow up to $120,000 without using collateral to secure the loan
  • Interest rate is variable with rates typically starting at around BMO Prime + 2%
TD Canada Trust logoTD Bank logo

TD Bank: Small Business Line of Credit

  • Contact TD directly to find out the maximum line of credit your business could qualify for
  • The line of credit will need to be secured by business assets
  • Interest rate is variable based on TD Prime Rate or TD U.S. Prime Rate

Features of business lines of credit in Canada

  • Interest rates. Make sure you understand whether your lender charges a variable or a fixed interest rate. Also, keep in mind you’ll only be charged interest on the amount you actually borrow, not on the amount you’re approved for.
  • Fees. A business line of credit may have one-off fees such as application and establishment fees. Additional fees that may be ongoing might include annual charges, ATM and transaction fees.
  • Monthly repayments. You will usually need to make partial monthly repayments on the amount you borrow. However, if you can afford to pay off your balance in full, you’ll avoid paying unnecessary interest charges.
  • Secured vs. unsecured. Some business lines of credit may need to be secured, meaning you will need to put up an asset as collateral.

How to compare your business line of credit options

Here are 5 questions you can ask when you’re trying to compare business lines of credit options in Canada. Answering these questions before signing on the dotted line will help you narrow down your options to find the best business line of credit for your business’s needs.

  • Can my business afford it? This should always be the main factor in your decision. Before taking on any type of debt, calculate all associated costs and make sure your business’s cash flow is able to take on the monthly repayments.
  • How much can I borrow? Different lenders offer varying minimum and maximum amounts. The particular amount you’re approved for will depend on several factors including your past credit history, requested credit limit, cash flow, assets and liabilities. You won’t automatically be approved for the maximum amount.
  • When will I receive my line of credit? Make sure the lender you choose can provide your funds when you need them. Otherwise, you’ll be wasting lots of time, resources and money.
  • How much will it cost me? Aside from the interest rate, check to see what fees you’ll be charged, including one-off fees such as application and establishment fees. The lender may also charge ongoing fees.
  • How much will my repayments be? Your monthly repayments aren’t fixed and will depend on how much you would like to pay down. As long as you pay interest and other fees for the month, lenders usually provide great flexibility on how much of the balance you want to pay back. Your lender may set a monthly minimum that you’re required to pay back each month.

Business line of credit pitfalls to avoid

While a business line of credit can be flexible and convenient, you should still be cautious before committing your revenue to debt. Here are some easy mistakes to make with business lines of credit – avoiding them can save you a lot of money in the long run.

  • Requesting more than you need. Think twice before requesting a credit limit more than what your business actually needs. By doing this, you may find yourself taking on too much debt that could put your business in financial distress.
  • Borrowing more than you can afford. It’s easy to borrow more than your business can afford, especially if you borrow the maximum amount allowed by your credit limit. Only borrow the amount you need, and if you can, pay more than the minimum each month to reduce the amount you owe.
  • Taking too long to repay. Because business lines of credit are like credit cards, interest and charges will continue to accrue when a balance is left unpaid. This means the longer you wait to pay back your unpaid balance, the more expensive it gets.

How do I apply for a business line of credit?

To get started, follow these steps. But keep in mind that each lender is different, so you may have to provide more or less information when you fill out a specific application.

  1. Compare lenders. Don’t just look at one.
  2. Check the lender’s eligibility criteria to make sure your business qualifies.
  3. Gather documents like your profit and loss statements, your tax numbers and accounting records.
  4. Fill out the lender’s application. This usually will include both personal and business information.
  5. Submit your application and wait for a response. Depending on the lender, it may take a few minutes to a few days.

Most business line of credit lenders require you to have been in business for at least a year and meet certain revenue criteria. If you have a newly established business, check out our guide on startup loans.

Bottom line

While a business line of credit can be convenient in its flexibility, it can be tempting to make a large draw that adds more debt than your business can afford. Carefully compare lenders, and be sure to consider all your business loan options before making a final decision.

Frequently asked questions about business lines of credit in Canada

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