How to Get a $1 Million Business Loan

Applying for a $1 million business loan can give you access to a large amount of cash for your business. That said, these loans typically come with strict eligibility requirements and you’ll often need very high revenue to apply.

$1 million business loan from an alternative lender

Getting an online $1 million business loan isn’t very common, but you may be able to find some options if you look hard enough. Another idea could be to borrow two or more small business loans from several online sources, provided you qualify and have enough money to repay the funds.

Advance Funds Network is an example of an alternative lender that offers $1 million business loans.

Advance Funds Network Business Loan

• Starting at 8.00% APR
• Borrow $10,000 – $1,000,000
• Repay in 3 – 24 months

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Government-backed business loans

Government-backed business loans are the most popular type of $1 million business loan. These are funded by the Canadian government and come with lower interest rates and more flexible terms than private loans.

Canada Small Business Financing Program (CSBFP) loans. CSBFP loans let you borrow up to $1 million in term loans, plus a line of credit of up to $150,000. You can use term loan funds for approved purposes, including purchasing or improving business assets like land, buildings, equipment and leasehold agreements.

Up to $150,000 of a term loan can also be used for intangible assets and working capital costs, but no more than $500,000 of a term loan can be used for equipment and leasehold improvements.

To qualify, you need to make under $10 million in revenue annually, operate a for-profit Canadian business and use loan funds for approved purposes. If you can’t repay the loan, the government covers 85% of the lender’s eligible loss.

Business loans from the big banks

All of Canada’s major banks can help you apply for a CSBFP loan. A 2% admin fee will be deducted for the trouble, but the fee can be financed as part of the loan.

Many also offer their own $1 million business loans and lines of credit. The funds you borrow from a big bank can be used to pay for just about anything, including payroll expenses, real estate purchases and day-to-day costs.

• Scotiabank. Scotiabank offers business term loans with limits of up to $1,000,000, as well as business lines of credit of up to $1,000,000.
• BMO. BMO offers a small business installment loan of up to $250,000 or a credit line for business of up to $1,000,000.
• Other big banks. TD, CIBC and RBC market business loans starting at $5,000. While it’s not indicated whether funding goes up to $1 million, you can always call a bank to find out the maximum loan amount it will give you.

How can I qualify?

Your business will have to prove that it can afford to take on a hefty debt load. You may need to meet the following requirements to be considered:

• High credit score. You’ll typically need to have a good to excellent personal credit score of at least 650 or above. The higher your credit score, the better, otherwise your business might end up paying a high interest rate, if it gets approved at all.
• Long time in business. To borrow $1 million, you’ll likely need to have been in operation for at least two years. Some lenders may approve businesses that have been operating for less time, but you’ll usually need higher annual revenue.
• High annual revenue. Most loans require you to have a high enough minimum annual revenue to make your repayments on a $1 million business loan. This minimum can sit between $100,000 and $500,000 per year, depending on your lender.
• Decent level of profit. On top of having strong annual revenue, your lender will want to see that your business is actually making money rather than simply covering its operations. You may need to provide proof of your profit margin to get started.
• Personal assets to put up as collateral. You could be required to put up at least $1 million in collateral to secure your business loan. That means you risk losing assets like your home or savings account if you default on the loan.
• Able to use the loan for its intended purpose. You could be required to use your loan for specific purchases, such as buying real estate or equipment. Check with your lender to find out how you can use your funds before agreeing to a loan.

6 steps to borrow a business loan

Follow these steps to find the right business loan for your needs:

1. Compare lenders. Your first step should be to compare lenders to find the best interest rates. It can be difficult to find lenders offering $1 million business loans, but you can still reach out to a few providers to be sure you’re getting the best deal.
2. Speak with a financial adviser. Loop a financial adviser into your plan. They may be able to help you figure out if you can afford repayments alongside all your other expenses.
3. Prepare financial documents. Get together documents like your business plan, annual revenue projections, bank statements, tax documents and other information that demonstrates how you intend to repay the loan.
4. Meet with your lender. You’ll usually need to visit your lender in person to discuss getting a $1 million business loan. There are no online applications to get this large of an amount (be careful with online lenders that claim to offer these services).
5. Apply for pre-approval. Applying for pre-approval lets you see if you qualify and what kinds of rates and terms you might get on a $1 million business loan. This can provide insight into your loan options without affecting your credit score.
6. Review and sign the loan contract. If approved, review your loan contract with your partners and financial adviser to ensure that the terms make sense for your business.

Costs to pay back a $1 million business loan

The amount you’ll pay depends on the length of your term and the interest rate you get.

• Interest rates. Your business loan interest rate will have a huge impact on how much you pay on your $1 million business loan over time. Taking an interest rate that’s 1% higher can lead you to pay thousands of dollars more in interest over the course of your loan.
• Terms. The length of your term will affect how much you pay in interest and how big your monthly payments are. With a shorter term, you pay more each month but save money on interest over time (and vice versa with a longer-term business loan).
• Fees. You may have to pay set-up or admin fees to get started with a $1 million business loan. For example, with a CSBFP loan, you must pay the bank a 2% administrative fee for any loan amount borrowed.

Types of business loans

There are a couple different types of business loans you can apply for to get $1 million. The one you choose determines which lenders you can borrow from.

• Fixed vs. variable rate. Fixed rate business loans come with fixed interest rates and consistent payments over the lifetime of your loan. Variable rates fluctuate in line with the prime rate, which means that your payments can go up and down each month.
• Secured vs. unsecured. Secured business loans are protected by collateral like your business equipment or a personal vehicle. You can lose your asset if you default on payments. Unsecured business loans don’t require assets, but rely instead on your credit score for approval. Find out how much collateral you may need to secure a business loan.
• Term vs. merchant cash advance. Term loans are paid back in regular installments over a set term. Merchant cash advances are paid back with a portion of your credit card sales each month.

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 could cost, simply fill out the following fields in the calculator:

1. Loan term and amount. Select how long you need to repay the loan, and enter the amount you intend to borrow.
2. Bank name. Enter the names of your lenders.
3. Fixed rate and period. If your loan comes with a special introductory fixed rate, enter the rate and how long the intro period lasts.
4. Ongoing rate. Enter the ongoing rate you’ll pay for your loan here.
5. Upfront fees. If your loan has an origination or application fee, add it here.
6. Fees. If the loan comes with any ongoing fees, you’ll need to add these here and select how often the fees are charged.
7. Prepayment penalty. If you’re charged a prepayment penalty for paying off your loan early, enter the amount here.
8. Calculate. Click the Calculate button to see which lender costs less, including 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.

Online lenders that offer large business loans

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Finder Score	APR	Loan Amount	Loan Term
8.6 Great Journey Capital Business Loan	8.6 Great	8% – 29%	$10,500 – $500,000	6 – 24 months	To be eligible, you must have been in business for at least 6 months with a minimum $120,000 in annual revenue.	Go to siteView details Compare product selection Compare	loading
8.1 Great Advance Funds Network Business Loan	8.1 Great	Starting at 8.00%	$10,000 – $1,000,000	3 – 24 months	To be eligible, you must have been in business for at least 6 months, have a minimum annual revenue of $120,000 and a minimum credit score of 500.	Go to siteView details Compare product selection Compare	loading
8.1 Great Loans Canada Business Loan	8.1 Great	9.99% - 35.00%	$500 - $50,000	4 - 60 months	To be eligible, you must have been in business for at least 9 months, have a Canadian business bank account and a minimum of $120,000 in annual revenue. Note: Loans Canada is a loan search platform. Apply once to get matched with lenders based on your credit and borrowing requirements.	Go to siteView details Compare product selection Compare	loading
7.9 Great Merchant Growth Business Loan	7.9 Great	12.99% – 39.99%	$5,000 – $800,000	6 – 24 months	To be eligible, you must have been in business for at least 6 months and have a minimum of $120,000 in annual revenue.	Go to siteView details Compare product selection Compare	loading

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How we picked these

Finder Score for business loans

To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 10+ business loans are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.

Read the full methodology

Bottom line

Business loans for $1 million are easiest to qualify for if you’re an established business with high revenue. Your best bet to get financing is to apply through the CSBFP. You can also apply through your bank or an online lender, although you may end up getting less than $1 million.

Frequently asked questions

• What can I do with a $1 million business loan?

  You can use a $1 million business loan to cover many types of business expenses. Some loans only let you cover costs to purchase new equipment or real estate. Others let you use the money you borrow to stock up on inventory, top up your payroll expenses or plan a business trip. It's up to you to decide what you want to spend money on unless you take out a loan with predefined spending requirements in place.

• Can I get a $1 million loan to start a business?

  Probably not. Most startup loans don't offer $1 million in funding. If your business is new, you may want to look into other options like crowdfunding, angel investment or even startup grants to get the financing you need to start or run your business.

• Can I get a $1 million business loan with bad credit?

  It's very unlikely. This is because your lender will want to make absolutely sure that you can repay a loan as large as $1 million. Your creditworthiness will be determined using your annual revenue, the worth of your personal assets and your credit score. You may need to build up your credit score if you want to qualify for a $1 million loan.

• Can I buy a business with a $1 million loan?

  Yes, you can use a business loan to finance the purchase of an existing business, although the amount you borrow depends on the lender and the type of financing. Under the CSBFP, you can finance the purchase of eligible assets of an existing business, but you can't use the loan to purchase shares. Some lenders offer financing designed to cover business acquisition costs.

To make sure you get accurate and helpful information, this guide has been edited by Leanne Escobal as part of our fact-checking process.

Written by

Claire Horwood

Associate editor

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Claire Horwood was a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee. See full bio

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Claire has written 240 Finder guides across topics including:

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