Best* Business Loans of 2021 | Finder Canada

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Best* small business loans of 2021

Not all business loans are created equal. Find the best lender for your needs.

Getting a loan for your business today is a lot different than it was 20 years ago. Today, you have options beyond banks and other financial giants, but this means that finding a lender you can trust takes a bit more effort. To save you time, we’ve narrowed down the different types of business loans on the market today and provided five tips to help you find the right business loan for your needs.

SharpShooter Funding Business Loan

  • Min. Loan Amount: $500
  • Max. Loan Amount: $500,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $120,000
  • Free online loan quote
  • Borrow $500,000+
  • Quick application process

SharpShooter Funding Business Loan

SharpShooter Funding offers loans up to $500,000 for small business owners who have been business for at least 6 months and can show a minimum of $10,000 in monthly deposits.

  • Min. Loan Amount: $500
  • Max. Loan Amount: $500,000
  • Interest Rate: Fee based, Prime pricing starting at 9.00%
  • Requirements: Annual business revenue of $120,000

Compare best* business loans in Canada

Name Product Interest Rate Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered
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 loans up to $300,000 for small business owners working in approved industries who have been in business for at least 6 months with a minimum monthly revenue of $10,000.

Who it might be good for: Business owners looking to receive funds in as little as 24 hours.
SharpShooter Funding Business Loan
Fee based, Prime pricing starting at 9.00%
$500 - $500,000
6 months - 5 years
$10,000 /month
6 months
Unsecured Term, Merchant cash advance
SharpShooter Funding offers loans up to $500,000 for small business owners who have been business for at least 6 months and can show a minimum of $10,000 in monthly deposits.

Who it might be good for: Business owners looking for a fast and simple application process.
Merchant Growth Business Loan
12.99% to 39.99%
$5,000 - $500,000
3-12 months
$10,000 /month
6 months
Unsecured Term, Line of credit, Merchant cash advance
Merchant Growth offers loans up to $500,000 for small business owners who have been business for at least 6 months and can show a minimum of $10,000 in monthly sales.

Who it might be good for: Business owners looking for flexible financing options.
Loans Canada Business Loan
Prime Pricing from 9.00%, Long term financing from Prime + 2.00%
$2,000 - $350,000
3 months - 5 years
$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 up to $350,000. Borrowers 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).

Who it might be good for: Business owners looking to use a broker to compare different financing options.

Compare up to 4 providers

Types of lenders

Here are some of the most common types of business loan lenders.

  • Online direct lenders.

Online direct lenders have become increasingly popular among businesses in recent years — especially as banks have stricter eligibility requirements. Online lenders might come with higher interest rate and fees, but they also have higher acceptance rates and faster turnaround times. These lenders can sometimes provide funding in as little as 24 hours and don’t have nearly as tough qualification criteria.

  • Peer-to-peer lenders.

Peer-to-peer lenders are similar to online lenders, except they don’t provide the funding themselves. Instead, they connect you to investors who will fund your loan through their online platform.

  • Banks.

Bank loans are the Holy Grail of business lending: Everyone seems to want one, but most business owners can’t seem to find one. Banks seem like an obvious place to go for a loan, especially if you’ve been borrowing for a long time. However, bank business loans aren’t always what they’re cracked up to be. They usually take more time to receive and sometimes require interviews or even site visits before you can even be considered for a loan.

  • Online marketplaces.

Online marketplaces are sometimes confused with peer-to-peer lenders, but they’re not quite the same. Rather than matching you with investors, online marketplaces match you with lenders. It’s an easy way to see a wide selection of lenders, but you’re typically limited to the marketplace’s partners, and therefore not exposed to all possible lenders and loans.

Five tips to get the best business loan

Increase your chances of approval and get the best rates and terms with these tips.
  1. Check your credit report. It’s good to know your personal credit score to figure out which lenders you qualify for. Beyond that, your credit report might contain mistakes. Contact the credit bureaus, Equifax and TransUnion, to get these fixed before you apply for a loan. If your business is established, you may have a business credit score that lenders consider too.
  2. Over-prepare. Know your business’s finances backwards and forwards. Get all of your documentation together ahead of time and have it on hand. Remember, you want to appear as qualified as possible, so being prepared is one way to accomplish that.
  3. Have a business plan that tells your story. Even if your lender doesn’t require it, a solid business plan means you’re on top of your business’s finances and future projections. Business plans make it easier to understand the types of financing you need, how much and what you might qualify for.
  4. Go for big lenders only if you need a big loan. Big banks are less likely to approve borrowers who need small amounts of financing. Its best to save banks and other big lenders for larger projects like real estate or buying large amounts of equipment. Nontraditional lenders, like online ones, usually provide more flexibility with loan amounts.
  5. Take advantage of risk-free pre-approval. The best way to get an idea of what interest rates you might qualify for is by getting pre-approved or calling a lender. It’s not guaranteed that you’ll get those rates, but it’s a better indication than the advertised APR and term range. You can also more accurately weed out lenders that won’t accept you in the first place.

Top types of loans for small businesses

Click on one of the following loans to find out which type of financing might work best for your small business.

Find out how other business loan types work

What do lenders look for in a business?

Finding a competitive deal on a business loan doesn’t just depend on finding a lender that offers low rates and the right type of financing. No matter where you apply, your business is more likely to qualify for competitive terms if you and your business meet the following criteria:

  • Your business is at least one year old. Lenders like to see that your business has a track record of steady revenue coming in to reassure them that you can afford to pay off your loan.
  • You have strong personal credit. While business credit scores do sometimes come into play, your personal credit score typically plays a more important role in your loan application, especially if your business isn’t very old.
  • You’re personally invested. Some lenders require that owners invest a certain amount of their personal funds in the business. Even if it doesn’t, a personal investment is a vote of confidence that many lenders take into account.
  • You’re willing to put up collateral. Some lenders require business owners to put personal assets up as collateral to secure the loan. This takes some of the risk off for the lender and can help you qualify for more competitive rates.

Business financing alternatives

Sometimes a business loan isn’t the best way to fund your business. If your business is new, you have low revenue or poor credit, you might not be able to get the most competitive rate. Instead, you might want to consider one of the following options:

  • Personal loans. A personal loan is a popular choice for entrepreneurs trying to fund a startup. Lenders usually offer up to $35,000 and require good credit, so they’re not right for all business owners and needs.
  • Crowdfunding. You might not need to take on debt or pay anyone back at all if your business needs to fund a project that’s easy to communicate in a short video. Crowdfunding can help you raise the money from your fans or investors.
  • Equity investments. Get funding for your business that you never have to pay back in exchange for partial ownership in your company by bringing on an investor. Keep in mind you lose partial control over your company by doing this.
  • Business credit cards. For small expenses or working capital, a business credit card is sometimes a lot easier to manage than a loan. Many business credit cards come with low annual fees and competitive APR’s.

Bottom line

There is no one “best” business loan for everyone, but there are better lenders and loan types for specific business needs.

Understanding the type of loan you need is the first step toward getting a business loan that fits your unique business needs. Check out our guide to learn more about business financing and find lenders you and your business qualify for.

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