$300,000 business loans in Canada

If your business can qualify for a $300,000 business loan, you’ll likely get one of the lower rates a lender has to offer. But often, simply meeting a lender’s minimum requirements isn’t enough. You generally need good credit, a few years in business and the cash flow to support hefty monthly payments. That’s why it’s essential to compare providers and prequalify to make sure your business is eligible.

Where to get a $300,000 business loan

If you want to secure a $300,000 business loan, consider the following types of lenders:

• Financial institutions, including the Big Five, are typically your best bet for getting a $300,000 business loan. They offer the government-backed Canada Small Business Financing Program (CSBFP) as well as in-house financing. Eligibility requirements can be strict.
• Online lenders like Journey Capital and Advance Funds Network offer a quicker and sometimes easier way to get a $300,000 business loan. However, you may have to pay higher interest rates for this convenience.

Steps to get a $300,000 small business loan

You can apply for a $300,000 business loan by following these general steps. But beware: The application process is usually more intensive for a loan of this size than for financing under $100,000.

1. Decide which type of loan your business needs. If you need funds to cover overhead costs during a construction project, a line of credit could be the way to go. But if you only need funds to onboard and train a team of new employees, a term loan is likely a better choice.
2. Compare business loan providers and check your eligibility. This could involve setting up an appointment with a loan officer at a bank. Or use a connection service that partners with both bank and online lenders to quickly compare offers.
3. Gather all required documents to complete the application. For a $300,000 loan, this usually includes bank statements for the business and owners, tax returns, financial statements and financial projections.
4. Fill out the application according to your lender’s instructions. If your lender has an online application, this sometimes only takes a few minutes. But some loans typically require multiple forms, which can get complicated. It may be worth signing up for a packaging service that can help you prepare and organize your loan application materials before submitting them.
5. Have your collateral appraised if it’s required. While standard for real estate loans, you might also need to take this step for inventory financing.
6. Read your loan offer before signing, noting the interest rate, fees, repayment terms and due dates.

Documents you’ll need

When applying for a $300,000 business loan, lenders typically require the following documents:

• Financial statements: Profit and loss statements, balance sheets and cash flow statements.
• Tax returns: Both personal and business tax returns for the past two to three years.
• Business plan: A detailed plan outlining your business model, market analysis, financial projections and how you’ll use the loan.
• Legal documents: Business licences, registrations and any relevant contracts or agreements.
• Identification: Government-issued ID like a passport or driver’s licence.

How to choose the best $300,000 business loan

To choose the right loan for your business, consider the following factors:

• Interest rates: Look for the lender with the lowest business loan rates to reduce the overall cost of your loan.
• Repayment terms: Consider your current revenue, projected growth and ability to handle larger payments when choosing a repayment term, as longer terms mean lower monthly payments but more interest paid over time.
• Fees: Don’t overlook the hidden fees, like origination fees, application fees, late payment charges and early repayment penalties, as they can add significantly to your total borrowing cost.
• Lender reputation: If you’re not borrowing from a major bank, be sure to read a lender’s reviews before signing anything. You can also check if a lender is registered with the Financial Consumer Agency of Canada (FCAC) or your province’s regulatory authority.
• Flexibility: If you expect your business needs to change during the loan term, opt for a lender that offers more flexibility, allowing you to make extra payments without penalties, adjust payment schedules or refinance if necessary.
• Collateral: Determine which collateral is at stake—like your business’s property, equipment or inventory—before agreeing to a loan, because you risk losing those assets if you can’t repay.

How much does a $300,000 business loan cost?

How much a $300,000 loan costs depends on the rates, fees and loan terms your lender offers. Here’s an example of what your monthly payments and total cost might be with two different APRs and loan terms:

See how much a $300,000 business loan costs with other rates and terms by using our calculator.

What will get you approved for a $300,000 business loan?

• A strong personal and/or business credit score
• Established business history
• Consistent revenue
• Collateral
• Comprehensive business plan
• Low debt-to-income ratio

How fast can you get a $300,000 business loan?

How quickly you can receive your $300,000 business loan depends on the lender. Traditional banks may take several weeks due to having a thorough underwriting process, while online lenders can expedite the process and offer faster approvals, sometimes within a few hours or days.

Receiving funding from a government program, like the Canada Small Business Financing Program, can take six to nine weeks.

Which government programs offer $300,000 business loans?

The Canada Small Business Financing Program offers loans of up to $1 million for start-ups and small businesses that make $10 million or less in sales each year. You can use the loan for many purposes, such as paying for everyday expenses, buying equipment or real estate or refinancing debt.

Bottom line

If you have strong credit, steady revenue and a solid business plan, you should be able to secure a $300,000 business loan, whether it’s with a traditional bank, online lender or government-backed program.

But, before you land on a lender, work out which one has the type of financing you need and offers the type of service you’re looking for, and—if this option is available—remember to prequalify before submitting your full application.

Frequently asked questions

• Can you get a $300,000 business loan with bad credit?

  It'll be difficult to get a $300,000 loan with bad credit, even if you apply to an alternative lender. This is a large amount, and lenders reduce their risk of loan defaults by only approving low amounts.

• What are the eligibility requirements for a $300,000 business loan?

  Eligibility requirements differ depending on the lender, but you typically need a strong credit score, at least two years of business history, consistent revenue, a detailed business plan and sufficient collateral.

• Can you get an unsecured $300,000 business loan?

  It's possible to get an unsecured $300,000 business loan, especially if you apply with an online lender. However, most lenders prefer to collateralize $300,000 loans, because they stand to take a sizable loss if your business defaults.

  And even then, most unsecured loans require a personal guarantee from all business owners with a 20% stake in the company.

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

Rebecca Low

Writer

Rebecca Low is a writer for Finder. She has contributed to a range of digital publications, including income.ca, Indeed, and Expatden, writing on topics like personal finance, career development, and travel. See full bio