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Business loans

Where to get business loans online and key factors to consider before applying. Get the right loan for your business.

Need a business loan?Compare 15+ lenders

Compare business loans

Use our curated list of loan providers below to help narrow down your options and find the right business loan for your needs.

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
SharpShooter Funding Business Loan
Prime pricing from 9.00%
$500 - $500,000
6 - 60 months
$10,000 /month
6 months
Unsecured Term, Merchant cash advance, Invoice factoring
SharpShooter provides capital to small businesses that are underserved by banks and credit unions. It measures overall business health and potential rather than focusing strictly on traditional metrics. Fill out a simple application and get pre-approved in minutes. Receive your funds within 24 hours.

To be eligible, you must have been in business for at least 6 months with a minimum of $10,000 in monthly deposits.
Lending Loop Business Loan
Starting at 4.96%
$10,000 - $500,000
3 - 60 months
$8,500 /month
12 months
P2P
Lending Loop is Canada’s first regulated peer-to-peer lending platform. Complete an application in 5 minutes. Once you accept your loan offer, investors will begin to fund your loan on the marketplace. Your loan will be transferred to your bank account when it is fully funded.

To be eligible, you must have been in business for at least 12 months and have a minimum of $100,000 in annual revenue.
Loans Canada Business Loan
Prime Pricing from 9.00%
$2,000 - $350,000
3 - 60 months
$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 financing up to $350,000. Complete one simple online application and get matched with your loan options.

To be eligible, you 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).
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 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.

To be eligible, you must have been in business for at least 6 months with a minimum monthly revenue of $10,000.
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Types of small business loans in Canada

There are several different types of business loans out there, each offering different terms and benefits. Which one is best for your business depends on its specific situation. For example, if cashflow is an issue, a merchant cash advance or invoice financing might be the way to go.

Compare 15+ lenders of business loans

Here’s a closer look at lenders providing business loans, including their product’s key features, loan types on offer, interest rates and eligibility requirements. The information below is checked regularly to ensure accuracy.

LenderKey featuresEligibility requirementsLink
SharpShooter
  • Specializes in providing capital to businesses underserved by banks and credit unions
  • Measures your overall business health and potential rather than focusing strictly on traditional metrics
  • Loans of up to $500,000
  • Unsecured loans and merchant cash advances
  • Turnaround time of 48-72 hours
  • Interest rate: Fee based, prime starting at 9%
  • Have a Canadian bank account
  • Place of business located in Canada
  • In business for at least six months
  • Show a minimum of $10,000 in monthly deposits ($120,000 in annual revenue)
  • 500+ minimum credit score
Go to siteRead review
Lending Loop
  • Loans starting at $10,000 up to $500,000
  • Applications are considered by Lending Loop’s community of investors
  • All types of businesses are welcome, including corporations, partnerships and sole proprietorships
  • Interest rate: 4.96%
  • Personal credit score of at least 640
  • At least one year in operation
  • At least $100,000 in annual revenue
Go to site

Read review

Merchant Growth
  • Unsecured business loans of up to $500,000
  • Loan types include ecommerce financing, flex financing (repaid with a percentage of daily sales) and fixed solution financing (fixed daily repayment schedule)
  • Interest rate: Varies, depending on the loan product
  • Business must be Canada-based
  • Six months in business
  • Minimum $10,000 /month revenue
  • Must accept debit/credit at your business
Go to siteRead review
Loans Canada
  • Loans starting at $2,000 up to $350,000
  • Loan types include unsecured, secured, lines of credit, merchant cash advance and equipment financing
  • Loan terms from three months to five years
  • Interest rate: Prime Pricing from 9.00%
  • Minimum $50,000 in annual revenue
  • Minimum credit score of 410
  • Must be in operation for at least 100 days
  • Must be a Canada-based business
Go to siteRead review
OnDeck
  • Loans starting at $5,000 up to $300,000
  • Loan terms of 6 - 18 months
  • Secured term loans, lines of credit and merchant cash advances
  • Turnaround in as little as 24 hours
  • Interest rate: 8.00% – 29.00%
  • Six months in business
  • Minimum credit score of 600
  • Minimum $10,000 monthly revenue
  • Approved industry (including restaurants, retail, automotive, healthcare, hotels and services)
Go to siteRead review
Thinking Capital
  • Loans starting at $5,000 up to $300,000 for new customers
  • Existing customers can apply for up to $500,000
  • Options include business loans and merchant cash advances
  • Interest rate: 8.00% - 22.00% for business loans
  • Business must be Canada-based
  • Six months in business
  • Minimum $7,000 monthly revenue
  • Must accept debit/credit at your business
Read review
Lendified
  • Loans starting at $5,000 up to $150,000
  • Terms of three months up to two years
  • No collateral requirement
  • Business loans only, no merchant cash advances or lines of credit available
  • Interest rate: 8%–18%
  • Over $100,000 in annual revenue
  • Business must be Canada-based
  • At least one year in operation
  • Good to excellent credit score (around 610 or above)
Read review
Econolease
  • Private lending option, providing working capital loans and equipment leases/rentals to restaurants and other food-related businesses
  • Working capital loans of between $10000 up to $300,000, with terms of 6 to 12 months
  • Interest rate: Varies, depending on loan product
  • Monthly sales of at least $15,000 to secure a working capital loan
  • Industry-specific to the food service industry
  • At least six months in operation
Read review
2M7
  • Merchant cash advances for small businesses like retailers, restaurateurs and start-ups
  • Cash advances of up to 125% of your typical monthly earnings
  • Your cash advance is repaid through a set percentage of each sale you make until the loan is fully repaid
  • Interest rate: A one-time cost or “factor rate” (between 1.18 and 1.48) is charged based on the value of sales you have
  • Operational for a minimum of 90 days
  • Accept credit and debit cards, with a minimum of $10,000/month in sales
  • Be located in Canada, except Quebec
  • Have no bankruptcies (personal or commercial)
Read review
Company Capital
  • Three types of business loan options
  • Business loans of between $5,000 and $100,000
  • Lines of credit of between $5,000 and $100,000
  • Merchant cash advances of between $5,000 and $100,000
  • Interest rate: Business loan interest rates of 6.87%. Merchant cash advances are repaid by a percentage of your daily credit card and debit sales.
  • Operational for a minimum of six months
  • Accept credit and debit cards, with a minimum of $5,000 /month in sales
Read review
CanaCap
  • Business loans of anywhere between 5,000 and $250,000 with terms of 4 to 6 months
  • Merchant cash advances of up to $250,000 with a flexible repayment schedule
  • Interest rate: Starting at 29% for business loans
  • Operational for a minimum of six months
  • At least $10,000 in monthly sales
Read review
iCapital
  • Business loans starting at $5,000 up to $100,000 with terms of 3 to 24 months
  • Merchant cash advances of between $5,000 up to $250,000
  • Interest rate: Starting at 6.75%
  • Annual gross sales of $100,000 for business loans
  • Monthly gross sales of $5,000 for merchant cash advances
  • No open bankruptcies (personal and commercial)
  • Home-based businesses can’t apply
Read review
Clearbanc
  • Cash advances ranging from $10,000 to $10,000,000
  • Flexible repayment options, taking a portion of your daily sales instead of a fixed loan repayment
  • Bad credit doesn’t matter
  • Businesses can qualify for a second advance after you’ve repaid 80% of your original advance
  • Interest rate: Not available
  • Eligibility is focused on your business’s performance instead of its credit score
  • Must have monthly sales of at least $10,000
  • Must be in operation for at least six months
Read review
HSBC
  • Unsecured business loans of up to $$250,000
  • Secured business loans of up to $1.25 million
  • Terms of between two years and a decade
  • Interest rate: Varies depending on a secured vs unsecured loan and individual factors, such as your credit score
  • Must have an HSBC chequing account to start your application
  • Annual revenue .below $5 million
  • Must be a sole proprietorship, partnership or corporation based in Canada
Read review
RBC
  • Fixed rate business loans starting at $10,000, which are repaid according to a fixed monthly schedule
  • Variable rate business loans starting at$5,000, which are repaid based on what the RBC prime rate is
  • Business loan terms cap out at seven years
  • No online applications allowed
  • You may have to secure your loan with your home, vehicle or business assets
  • Interest rate: Not listed online
  • No bad credit
  • Must be a Canada-based company
  • Minimum revenue thresholds not listed online
Read review
Scotiabank
  • Business loans of up to $50,000
  • Terms of 5 to 10 years (with 20-year amortization for real estate)
  • Interest rate: Not listed online
  • No specific criteria listed on the Scotiabank website
Read review
TD
  • Small business loans with fixed or variable interest rates
  • Terms of 1 to 5 years
  • Interest rate: Not listed online
  • Must be a sole proprietorship, partnership or corporation based in Canada
  • You typically will need an asset to secure your loan
Read review
BMO
  • Small business installment loans of up to $250,000 with fixed or variable interest rates and term lengths of up to 15 years
  • Installment Loan Plan loans of up to $500,000, with a range of flexible repayment and amortization options
  • US currency loans of up to $100,000
  • Interest rate: Not listed online
  • You must apply for business loans in person only
  • No specific criteria listed on the BMO website
Read review
CIBC
  • Business loans starting at $10,000 up to $1,000,000
  • Terms that can extend up to 15 years
  • Secured and unsecured financing options
  • Interest rate: Not listed online
  • Provide a detailed business plan
  • Show you have personal financial investments in your company
  • Proof that your business generates positive revenue for at least 12 to 24 months
  • Good to excellent credit score
Read review
BDC
  • Up to $100,000 in small business loans
  • 100% online
  • No application fees
  • Postpone principal payments the first six months and repay the loan at your own pace over a five-year period
  • Interest rate: Floating base rate of 4.55% plus an interest percentage based on your personal and business information
  • Canada-based business
  • Good credit history
  • In operation for at least 24 months and generating revenue
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How do business loans work?

Business loans provide your company with funding for any business-related expenses – like growth, filling in cash flow gaps and covering other expenses. With a traditional small business loan in Canada, you can typically borrow from $5,000 to $5 million at a fixed or variable interest rate typically starting at around 5%.

You repay the funds, plus interest and fees, in monthly installments, often over 5 to 20 year terms. Some business loan providers require collateral, while others offer approval based on your creditworthiness, revenue and other factors.

How to compare features of small business loans

There are a number of factors that you should consider when applying for a business loan:

  • Loan amounts. Some lenders offer relatively small loans while others will lend you up to $5 million if you qualify. Find the loan amount that best suits your needs at an interest rate you can afford.
  • Interest rates. Rates vary depending on which lender you apply with. Rates run as low as 3% and as high as 30-40%, depending on the state of your credit score and other variables. Compare lenders to find the best rates for your unique situation. Learn more about business loan interest rates.
  • Loan terms. Loan terms can range from 6 months to 20 years, based on how much you borrow. You’ll want to look for a term that gives you manageable repayments without charging you too much interest.
  • Fees. Many small business loans come with hidden fees that can drive up the cost of your loan. Make sure you understand how much you’ll have to pay for application and origination fees as well as any ongoing annual or monthly fees.
  • Repayment options. Some loans let you pay your balance back in regular installments while others take a portion of your monthly sales. Pick the option that makes the most sense for your financial situation.
  • Cash availability. The majority of small business loans lend you a lump-sum cash payment that you then pay back in regular installments. That said, it might make more sense for you to take advantage of a business line of credit. This could be a better solution if you plan to borrow money for ongoing business expenses.

Where to get business loans

There are generally 3 main options where you could apply for business loans in Canada. Picking the right option for you will depend on your business needs, financial situation and preferences.

1. Online business loan providers

Online business loans are easier to get than bank business loans: There’s less paperwork and a shorter application. It’s now also easier to qualify for an online business loan as a small business.

Here’s a few types of loan providers you might find online:

  • Direct online lenders. These lenders fund your loan themselves and often handle all aspects of the application process in-house.
  • Peer-to-peer (p2p) platforms.These online platforms act as liaisons between borrowers and investor funding. The platform sets the terms and conditions and is your point of contact if you have questions about the process.
  • Business loan brokers.Hiring a business loan broker gives you a chance to sit down in-person and discuss your options. You may have to pay a broker fee if the broker doesn’t make commission from the lender when you sign up.

Across the board, online lenders place less emphasis on your personal and business credit score compared to traditional lenders like banks and credit unions. Instead, online lenders focus on your business’s overall financial health, your monthly revenue and projected gains. Their aim is to determine whether you have the funds to keep up with loan repayments. If your business is new and doesn’t have established credit, you’re more likely to successfully secure a business loan via an online lender.

Best online business loan lenders in Canada

2. Bank business loans

Bank loans could be a good option for established businesses pulling in at least $1 million in annual revenue and need large amounts of funding — say, over $100,000. Bank loans are provided by Canada’s Big Five Banks and other major financial institutions. These loans often come with higher interest rates and have strict repayment requirements. In the majority of cases, you will need to apply for a business loan in person at a local branch compared to online applications via online lenders.

Providers include BMO, TD Bank, RBC, CIBC, Scotiabank, HSBC, Canadian Western Bank and National Bank.

Compare banks for small business loans

3. Credit union business loans

Credit unions provide small business loans that are a little bit more flexible than big bank loans. You’ll typically need to be signed up with the credit union you want to borrow from and you may need to have an established relationship with them to qualify. Keep in mind that credit union business loan amounts are often capped at $50,000. Credit unions may have more flexible repayment options and other benefits compared to banks.

Providers include Meridian, Servus, Vancity, Connect First, Conexus, First West, Steinbach, Alterna Savings and Coast Capital Savings.

Credit union business loans

Online business loans vs bank business loans

If you’re shopping for a business loan, you may find yourself deciding between an online lender and a bank. While the options are plentiful for either route, bank loans and online loans have some key differences, from the application process to eligibility requirements, interest rates and loan repayment terms.

What are the interest rates for small business loans?

Unfortunately, there is no one-size-fits-all solution for business loan interest rates in Canada. Your interest rate will depend on a variety of factors, including your credit score, your loan type, your loan amount and the length of your loan.

Interest rates range from 4.96% right up to 29% with online lenders, while Canada’s major banks don’t disclose their interest rates on their websites. Instead, you’ll need to book an appointment and apply for a business loan in person if you decide to apply for a business loan with any of the big banks. As a general rule of thumb, banks offer lower interest rates compared to online lenders though.

If you want to qualify for a lower interest rate, you’ll need to make sure you have the following:

  • Good or excellent personal credit
  • Stable, positive cash flow (as opposed to seasonal, cyclical or negative cash flow)
  • Excess net income that will comfortably cover loan payments
  • In business for at least two years
  • Able to provide collateral

The candidates that meet these criteria have the highest probability of repaying the loan, which is why they receive the best rates. Read more about how to compare small business loan interest rates.

Small business loan calculator: calculate your monthly payments

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What do lenders look for?

Preparation is the key to success if you’re applying for a business loan. Before you make your case to lenders, make sure you have all of your financial ducks in a row to put your best foot forward. It could be your business’s make-or-break moment to secure the funding you need. Here’s what you should keep in mind as you prepare your application:

To help pull your loan together, you’ll typically be asked for some of these common documents:

  • Government-issued ID. You’ll need to be a Canadian citizen or a permanent resident with a valid Canadian address to apply. Typically, lenders verify this by requesting to see two valid pieces of identification, like a driver’s licence and passport.
  • Business bank statements. Lenders often like to look at the past two to six months of your business’s most recent bank statements to get an idea of its current cash flow.
  • Tax returns. Your taxes give lenders an idea of how much your business makes annually. Some lenders only ask for business tax returns, while others like to see your personal return as well.
  • Business plan. More common with banks and credit unions, some online lenders also ask for a business plan – or at least financial projections.
  • Profit and loss statement. Also called an income statement, your P&L statement breaks down your company’s net revenue and helps your lender verify how much debt your business can afford to take on.

How to get online business loans in six steps

Here’s what you can expect to happen when you apply for a small business loan in Canada.

  1. Know what your business needs.
    Is it generally short on working capital? Then a line of credit, invoice factoring or a merchant cash advance might be a good place to start. Need a fleet of vans? Look into vehicle financing. With this information, you can begin narrowing down lenders.
  2. Compare lenders.
    You know what you’re looking for. Now it’s time to start comparing business lenders. Ask yourself questions about the loan amount, cost, repayments and the company’s reputation while narrowing down your choices.
  3. Get prequalified.
    After you’ve narrowed down your options to a handful of lenders, prequalify for a few before making a decision. Most online lenders in Canada offer prequalification through a quick form on their website. Large banks might need you to to call customer service or visit a local branch in person.
  4. Submit requested documentation.
    After preliminary approval, the lender will likely need to verify your documents. Some lenders ask for a long list of documents and information. Others don’t require any paperwork.
  5. Complete the application.
    You’ll typically be assigned an account manager who can guide you through the full process. You might be asked to submit additional documentation. More involved business loan applications might involve a site visit from your lender or even an interview.
  6. Review and sign your documents.
    Make sure you understand the terms and conditions of your business loan before you sign the business loan agreement. If you don’t understand a clause or term, ask your lender — or better yet, a lawyer. That way, you won’t be hit with any surprises down the road.

    How long does it take to qualify for a small business loan?

    The application process for a small business loan can be seamless as long as you have a clean application with all of the relevant information and documentation prepared. If your lender needs to circle back with you to verify information or to ask follow up questions, this could delay progress.

    Where you apply for your loan also makes a key difference. Some online and traditional lenders may approve you in a matter of hours or days. Other lenders may need a few weeks to go through your application details and all of your supporting documents. An easy way to find out how long it takes is to contact your lender directly to find out about processing times.

        Why was my business loan application rejected?

        The main reason businesses get rejected for loans is because lenders doubt your ability to be able to repay the loan. Some common factors that might make lenders question your repayment abilities, and consequently reject your business loan application, include:

        • Weak business performance
        • Not enough collateral
        • Low credit score
        • Too much debt
        • Short credit history

        If you do get rejected, you might want to wait until your business is more established before reapplying. Taking steps to strengthen your credit report could also help your chances of approval. Or, consider applying for a secured rather than an unsecured business loan.

        Pros and cons of small business loans

        Pros

        • Higher loan amounts. Business loans may let you borrow up to $1 million, depending on factors such as your revenue, credit score, assets and time in business.
        • Competitive interest rates. You’ll typically get fairly competitive interest rates with a business loan, especially if you apply for one that’s backed by the government.
        • Many loan options. You can take advantage of many different types of loans depending on your business needs.
        • Reduced personal liability. Personal liability can be limited if your business can’t make repayments on time (as long as you don’t sign a personal guarantee).

        Cons

        • Business must be well-established. You’ll often need to prove that you’ve been in business for several years in order to qualify.
        • High revenue is required. You’ll typically have to show proof that you earn a significant amount of monthly or annual revenue to get started.
        • Personal guarantee may be required. You could be required to sign a personal guarantee for your business loan, which says that you can be held personally responsible if you don’t make your payments on time.
        • Not ideal for sole proprietorship. Many lenders will only lend to businesses that are incorporated, meaning you could have difficulty borrowing if you’re a freelancer, a sole proprietor or a startup.

        Small business loans in Canada for bad credit

        If your personal credit is less-than-perfect, don’t be dissuaded from applying for a business loan. Small business loans in Canada for bad credit are still readily available.

        Traditional lenders like banks and credit unions may make it harder to qualify for a business loan, but alternative financial lenders, especially in the online space, tend to have more relaxed criteria. Instead of shining a light on your credit score, they may qualify you based on other criteria, such as your monthly revenue and assets you’re willing to put up as collateral to secure your loan. Ultimately, if you can prove you can manage your loan repayments, these alternative lenders are more likely to grant you a business loan.

        Assets, such as business equipment, vehicles, property and funds in savings accounts, can all be used as collateral for a secured business loan. Just be careful: if you can’t make your repayments, your lender can sell your assets to cover what you owe.

        What are some business loan alternatives?

        If you’re having trouble getting approved for a business loan, or you don’t meet the basic eligibility requirements, consider these alternatives:

        • Crowdfunding.Crowdfunding is a method where you raise money online for a project or product. Typically people give you money in small increments. Friends, family and even strangers can contribute to help you reach your total goal. Based on the type of crowdfunding you use, you’ll offer donors something in exchange for their money.
        • Credit cards.Business credit cards may be the right option if you only need to borrow a small amount. Credit cards can typically come with higher interest rates than a secured business loan, so only use this option for small purchases that you’re sure you can pay off quickly.
        • Personal loans. Personal loans can typically be used for any legitimate reason, including financing a business. However, you should consider that your name – not your business’ name – is attached to the loan. So you are personally liable for paying back the loan in full, regardless of whether it’s from your personal or business account.
        • Equity investors. With this method, investors give you money in exchange for equity or partial ownership of the company. Small businesses can get an equity investment through a venture capital firm or an angel investor. While you won’t have to pay back any of the money you receive from an investor, you will have to share profits and decision-making power with them as your company grows.
        • Friends and families. You can ask family and friends for contributions if they have enough liquid capital to finance you. Just be aware that borrowing from friends and family can create tension in your relationships, so it’s important to have a solid repayment plan in place to keep both of you on the same page.

        Bottom line

        Small business loans can offer competitive advantages over personal loans in some cases. Benefits can include lower rates, longer terms, higher financing amounts and less personal liability. Taking out a business loan may be a good fit for you if you have a well-established business that makes a significant amount of revenue. You may want to choose something else if you’re looking to start up a business or you would like to borrow money for personal use.

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        FAQs about business loans in Canada

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