Best small business loans in Canada

Looking for the best small business loan in Canada to take your company to the next level? Big banks aren’t your only option. Many private lenders offer flexible Canadian business loans with customizable terms, from merchant cash advances to loans for startups and established companies.

We break down the best small business loans for Canadian businesses. Plus, get tips for comparing business loans to find the right option for your needs.

Best business loans in Canada

• Advance Funds Network: Best flexible business loan
• Journey Capital: Best private business loan
• Loans Canada: Best business loan for bad credit
• Merchant Growth: Best quick business loan
• Driven: Best business term loan
• Accord Financial: Best asset-based business loan
• RBC: Best bank for small business loans
• TD: Best bank for long-term financing
• SharpShooter Funding: Best for a wide range of industries

Best flexible business loan

8.1 Great Advance Funds Network Business Loan

8.1 Great

Starting at 8.00%

$10,000 – $1,000,000

3 – 24 months

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Why we like it Advance Funds Network offers a variety of loan products for diverse business needs, including term loans and lines of credit. They can accept fair to bad credit, making them accessible to businesses who have been denied by banks. The application process is straightforward and quick, with approvals often granted within 60 minutes and funds available as soon as the same day. Also, they don't charge upfront fees, allowing businesses to explore funding options without initial costs. Pros & cons Pros Easy online application process Flexible loan amounts Competitive rates Established lender Cons High rates for bad credit If you don't qualify for direct funding, you may be referred to a third-party lender Not for startups High revenue requirement

Best private business loan

8.6 Great Journey Capital Business Loan

8.6 Great

8% – 29%

$10,500 – $500,000

6 – 24 months

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Why we like it Journey Capital offers a number of different loan options with different terms and repayment schedules, including term loans, lines of credit and merchant cash advances. You can typically access the funds in as little as 24 hours after filling out a 10-minute application. Its starting rate is 8%, but you can get a lower rate if your credit and business are strong. Pros & cons Pros Easy process, won't ever have to visit a branch or office Fast distribution of funds, in as little as 24 hours High loan amounts No collateral needed Several loan options available, including flexible and fixed repayment options, merchant cash advances and lines of credit Cons Your business must pull in an annual revenue of at least $120,000 Credit score requirements start at 550 You'll need to be in business for at least 6 months

Best bad credit business loan

8.1 Great Loans Canada Business Loan

8.1 Great

9.99% - 35.00%

$500 - $50,000

4 - 60 months

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Why we like it Loans Canada lets you compare lenders with one simple application using its online platform. All you have to do is fill out some information about your business along with a handful of personal details to get started. You'll then be matched with lenders that suit your financial situation, making it a solid choice if you have bad credit. Funding is available within one to two days. Pros & cons Pros Online application process you can complete within a matter of minutes Get quotes from multiple lenders No broker fees Various types of loans available Cons High rates for bad credit Your business must make at least $120,000 in annual revenue You're limited to lenders within its network No physical locations, so you won't get any in-person customer service

Best quick small business loan

7.9 Great Merchant Growth Business Loan

7.9 Great

12.99% – 39.99%

$5,000 – $800,000

6 – 24 months

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Why we like it Online lender Merchant Growth specializes in helping businesses across a range of industries like ecommerce, restaurants, automotive, retail, salons and spas, and manufacturing. It offers various types of loans, including ecommerce financing that can be used for just about anything you need for your business. You can also choose from merchant cash advances, flexible financing repayment plans, and fixed loans that are similar to traditional business loans. Get quick access to funds within 24 hours. Pros & cons Pros Easy online application process with quick decisions High loan amounts No collateral required Many loan types to choose from to suit your business needs No minimum credit score required to qualify Cons High rates for bad credit Monthly sales of at least $10,000 to take out a loan No home-based business allowed

Best business term loan

8.2 Great Driven Business Loan

8.2 Great

Undisclosed

$10,000 - $500,000

3 - 24 months

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Why we like it Driven, formerly known as Thinking Capital, is one of the largest alternative lenders of small business loans in Canada. It has been lending since 2006 and has supported over 17,000 businesses across Canada. You can fill out its application in less than 10 minutes and get pre-qualifed with no impact to credit. Choose between daily or weekly payments and a loan term between 3 - 24 months. Pros & cons Pros Established alternative lender with years of experience Fast approvals and financing No hidden fees No restrictions on how your loan is used Save on interest by paying early Cons Fixed rate only High rates for bad credit

Best for asset-based lending

7.7 Great Accord Financial Business Loans

7.7 Great

Undisclosed

$50,000 - $3,000,000

Up to 5 years

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Why we like it Accord Financial is a strong alternative to traditional banks because they offer fast, flexible asset-based lending that focuses on the value of your inventory and equipment rather than just your credit score. You can choose from a wide range of solutions to get an immediate advance on your unpaid invoices and keep your cash flow moving. Their team works directly with small business owners to create customized repayment structures that support their companies through growth phases or major transitions. Pros & cons Pros Approvals based on asset Fast access to capital Flexible repayments Cons Higher rates than traditional banks Not for startups

Best Canadian bank for a small business loan

7 Great RBC Business Loan

7 Great

Undisclosed

start at $5,000

Typically up to 7 years

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Why we like it RBC offers a variety of flexible financing options, such as term loans and lines of credit, that can help you cover everything from daily operating costs to major equipment purchases. You can access specialized government-backed programs like the Canada Small Business Financing Loan, which provides up to $1 million in funding with lower personal risk for the business owner. These loans come with competitive interest rates and the ability to choose between fixed or variable payments to better fit your monthly budget. Pros & cons Pros Large, reputable lender Flexible financing options No penalties for prepayments of variable-rate loans 10% prepayment privileges every year for fixed-rate loans Cons Available in Canadian funds only Bad credit may not qualify Fixed-rate loans start at $10,000

Best bank for a long-term business loan

6.8 Standard TD Small Business Loan

6.8 Standard

Undisclosed

Min. $10,000 (no max.)

1 to 5 years

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Why we like it As one of the Big Five, TD is a strong contender when you need larger loan amounts and longer loan terms. If you have an asset such as real estate for collateral, TD offers amortization periods of up to 30 years. To apply, you'll need to provide your Notices of Assessment, financial statements, personal net worth statements and an Agreement of Purchase and Sale if you're buying real estate. Pros & cons Pros Large, reputable lender Competitive rates Fixed and variable rates Flexible financing options Cons Bad credit may not qualify Startups may not qualify May require an in-person loan interview

Best for a wide range of industries

8.7 Great SharpShooter Funding Business Loan

8.7 Great

5.49% - 22.79%

$1,000 - $300,000

12 - 60 months

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Why we like it SharpShooter is more lenient than banks about which industries they lend to. It's a good choice for business owners who need capital in a hurry, offering a straightforward online application that can lead to same-day approval. You won’t have to worry about the strict credit requirements found at big banks since they approve over 75% of applicants based on your company's revenue rather than just your credit score. Their funding options are versatile and allow you to receive anywhere from a few thousand dollars to a large-scale expansion loan in as little as 36 hours. Pros & cons Pros Low minimum monthly revenue: $4,166 /month Options for bad credit Low minimum time in business: 100 days Flexible financing options Fast funding Cons High rates for bad credit

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• Methodology: How we selected the best small business loans in Canada

  We’ve chosen the products on this page based on the providers available through Finder and online in the Canadian business loans marketplace. These loans are not representative of the entire market.

  When choosing the best small business loans, we considered each lender’s loan amounts, turnaround time, APRs, fees, transparency, customer service, ease of application and perks. No single business loan will be the best choice for everyone, so compare your options before applying.

Summary: best business loans in Canada

Where can I get the best small business loans in Canada?

Here are some of the most common types of business finance lenders where you can get the best small business loans in Canada:

Online direct lenders

Online direct lenders are becoming increasingly popular among businesses that have trouble getting small business bank loans. Online lenders often offer higher interest rates and fees, but it may be quicker and easier to get approved. Some lenders provide the best small business loans in as little as 24 hours.

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. Peer-to-peer lenders can provide some of the best small business loans in Canada for those who worry they may not qualify with more traditional lenders, like banks.

Online loan search platforms

Unlike peer-to-peer lenders that match you with lenders, online search platforms match you with lenders. This makes it super easy to compare a wide selection of lenders to find the best business loans in Canada. But you’re typically limited to the platform’s partners and aren’t exposed to all possible lenders and loan options.

Banks

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 can take more time to receive and sometimes require interviews or even in-person visits before you can even be considered for funding.

What is the easiest business loan to get?

The easiest business loans to get are from alternative lenders and loan search platforms, such as Journey Capital, Loans Canada and Merchant Growth. Business loans from these providers are easier to get because they have more lenient requirements than banks.

What banks offer business loans in Canada?

All big banks in Canada offer business financing options including small business loans. The best bank for small business loans in Canada depends on your financing needs and circumstances. To help narrow down your options, here’s a brief summary of some bank business loans in Canada:

Bank	Business loan features	Other sample business financing
	Variable and fixed interest rates Fixed-rate loan terms from 1 to 5 years Amortization up to 30 years based on the asset	Overdraft Protection TD business credit card Business Line of Credit Business Mortgage CSBF Loan
	Starts at $10,000 Variable and fixed interest rates Amortization up to 15 years Secured and unsecured options	Lines of Credit Overdraft Protection Black Entrepreneur Program Agriculture Loans and Lines of Credit Canada Emergency Business Account (CEBA) CSBF Loan
	Starts at $5,000 Variable and fixed interest rates Amortization based on the life of the asset	RBC business credit cards Royal Business Overdraft Royal Business Operating Line RoyFarm Agriculture Business Mortgage Commercial Mortgage CSBF Loan
	Loan amounts vary depending on the type of term loan Variable and fixed interest rates Amortization up to Up to 5 years or based on the asset	BMO business credit card Credit Line for Business Small Business Homeowner Line of Credit Agri ReadiLine Line of Credit CSBF Loan
	Up to $1,000,000 Fixed or variable interest rates Term of 3 to 10 years for most types of loans	Term Loan for agriculture Black-Led Business Financing Program Scotia Leasing for assets and equipment Scotia Flex for business or agriculture Farm Mortgage Canadian Agriculture Loans Act CSBF Loan
	Up to $350,000 Fixed interest rate Loan term of 60 months	Start-up financing Commercial real estate financing Purchase Order financing Equipment purchase financing Business purchase or transfer financing Working capital financing

How to compare the best small business loans in Canada

If you’re a business owner thinking about taking out financing to take your company to the next level, you may be wondering how to choose the best small business loan and lender to suit your needs. Here are the key factors to focus on:

• Loan amounts. What do you need financing for and how much do you need to borrow? Some lenders offer small loans starting as low as $200 while others will lend you up to $5 million if you qualify. Identify the amount you’ll need to filter out options.
• Interest rates. The interest rates a lender will qualify you for could be the make-or-break decision for you while shopping for the best business loans. Rates could run as low as 3% and as high as 30-40%, depending on these factors. Learn more about business loan interest rates.
• Loan terms. How much time do you need to repay your loan? Loan terms can range from 6 months to 20 years, based on how much you borrow.
• 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 fixed installments over the lifetime of your loan, while others take a portion of your monthly sales.
• Loan type. While traditional business loans, which provide a lump sum of funding you need to repay in fixed payments, are the most common, other loan types are available such as business lines of credit and merchant cash advances.

How to get approved for the best small business loans in Canada

You’ll need to put your best financial foot forward as you’re making your case to lenders when applying for a business loan. Increase your chances of approval and get the best rates and terms with these tips:

• Check your credit report

  Check your personal credit score to figure out which lenders your small business qualifies for. It’s also worth checking for mistakes on your report. If your business is more established, you may have a business credit score that lenders consider as well.

• Over-prepare

  Know your business’s finances backward and forward. Get all of your documentation together ahead of time and have it on hand. Make sure you’re acquainted with your business’s net assets, debts, revenue and projected revenue.

• 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.

• Take advantage of risk-free prequalification

  The best way to get an idea of what rates you might qualify for is by prequalifying or calling your lender.

• Be willing to put up collateral

  Many small business lenders require business owners to put a lien on their personal assets as collateral. Securing your loan takes some of the risk off of the lender and can help you qualify for more competitive rates.

• Make sure your business is at least 6 months to 1 year old

  Lenders like to see that your business has a track record of steady revenue (typically at least $10,000) coming in to reassure them that you can afford to pay off your loan. For the most part, they require at least 6 months of business records.

How to apply for a business loan in Canada

These days, you can apply for a small business loan in person, over the phone or online in a matter of minutes depending on the lender you’ve decided to work with.

1. Find the best loan you and your business qualify for. Make sure your business fits the eligibility requirements for the loan you’ve set your sights on. If you’re not sure whether you’re eligible or not, contact customer service.
2. Complete your application. Some lenders require an loan application appointment while others let you apply online any time. Before submitting your application, review it carefully for errors to avoid delays.
3. Get approved. The timing depends on your lender. Some online lenders provide a decision instantly or within 1 business day, while others may take up to a week. Once approved, make arrangements to receive your funding.

Required information and documents

When you apply for one of the best small business loans in Canada, you may be asked to provide the following information:

• Your full name, contact information and Social Insurance Number (SIN).
• Your full business name, address, phone number and email address.
• Your industry and the date you started your business.
• The annual revenue of your business.
• Your personal bank account information and income earned.
• How much you’re looking to borrow.
• How you intend to use your loan.

You may also need financial and legal documentation, including:

• Bank statements
• Revenue statements
• Business and personal tax returns
• Personal credit score
• Insurance or collateral
• Business plan

What affects the cost of the best small business loans?

For this reason, business loan costs are dependent on various factors, including your interest rate, extra fees, the lender, loan purpose, collateral, your business’s financial position, time in business and your personal finances.

How much can I borrow with a Canadian small business loan?

Small business loans range from as low as $200 with a merchant cash advance to several million dollars with an asset-secured loan. The amount you can borrow depends on the lender and personal factors like your credit score, debt-to-income ratio and business revenue.

You’ll qualify for more money with the best small business loans in Canada if you have an established business, a strong credit rating and a decent amount of disposable income. You’ll qualify for less if you run a startup or have poor credit.

If you’re curious about how to qualify for more funds, read more about how much you can get via a business loan here.

When should I get a small business loan in Canada?

Whether you want to hire more staff, buy more equipment or take out a lease on a new property, there are endless reasons to get a small business loan.

Ultimately, you should only apply for one of the best small business loans in Canada if it is absolutely necessary. Your business should not shoulder more debt if it doesn’t need to.

The most common reasons why businesses take out a loan include:

• Starting a new business
• Buying or expanding office and retail space
• Buying equipment or inventory purchases for daily operations
• Hiring staff
• Investing in a business opportunity
• Building business credit history as you pay off your loan
• Buying marketing or advertising materials

Types of loans for small businesses in Canada

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

• Business term loan

  How it works: Your business takes out a lump sum to cover a one-time expense. Pay it back in monthly repayments plus interest and fees. Term loans typically don’t come with many restrictions as long as you use them for business purposes.

  How much you can borrow: You can generally borrow up to $1.25 million and pay it off between 1 and 7 years, sometimes longer.

  Best for: Covering one-time expenses like hiring new staff, buying office supplies or technology or other costs that your business doesn’t need to cover regularly.

• Business line of credit

  How it works: Similar to a credit card, opening a line of credit gives your business access to cash when it needs money. You only pay interest on what you actually borrow and have a certain time frame to pay it off. You can borrow up to your credit limit and then pay it off and continuously borrow as long as the line of credit is open.

  How much you can borrow: Your business can typically get access to between $2,000 and $500,000 with repayment periods of 6 months to a few years.

  Best for: Covering recurring expenses, picking up the slack during an off season or paying for ongoing projects where costs are difficult to predict.

  Dive deeper: Get the low down on how business lines of credit work

• Invoice financing

  How it works: A lender gives you an advance on unpaid invoices, which you pay back once the invoices are paid.

  How much you can borrow: A percentage of the total value of your invoices. Lenders also typically charge an advance fee of between 1% and 5%.

  Best for: Businesses that regularly rely on accounts receivable.

• Equipment financing

  How it works: A lender gives your business a term loan with relatively low rates to buy equipment, which it puts up as collateral.

  How much you can borrow: Up to 80% of the equipment’s value, sometimes more.

  Best for: Businesses buying heavy machinery, vehicles and other expensive equipment.

• Microloan

  How it works: New and small businesses get a small amount of funding to help get off the ground.

  How much you can borrow: Microloans can start as low as $1,000 and can be repaid over 3 months or more.

  Best for: Small businesses that need financing for basic necessities but can’t qualify for a traditional business loan.

• Merchant cash advance

  How it works: Business owners get an advance on their future sales, which they pay back with a percentage of their profits plus interest and fees.

  How much you can borrow: Typically around 20% of your business’s monthly profits.

  Best for: Retail or other businesses that rely on credit card sales.

Bottom line

There is no single best small business loan for everyone. Many businesses that don’t qualify for bank small business loans may get funding from private online lenders, which often offer more convenient approval and more flexible terms. Check out our guide to learn more about business financing and find lenders your business qualifies for.

Frequently asked questions

• How does a small business loan work?

  The most common type of small business loan is a term loan, where a lender gives you a lump sum that you pay back plus interest and fees. However, there are plenty of other small business loans that could better fit your business's needs, so be sure to compare your options before signing for a loan.

• Can I get a small business loan without collateral?

  Yes. While many business lenders ask for a lien on your business assets as collateral—especially those with more lenient credit requirements—it's possible to find an unsecured business loan.

  Collateral isn't necessarily bad, however. You can often get lower rates when your loan is secured, since it's less risky for the lender.

• Can I get a loan to start a business?

  Getting a business loan to start a business can be difficult, and it's not always a good idea. New businesses are extremely risky: If you can't pay back your loan, which is a high possibility, it could ruin your personal finances.

  That doesn't mean you can't get financing to launch your new business through other means. Sources like angel investors, venture capitalists and crowdfunding platforms might be better, less risky places to start.

• How long does it take to get a business loan?

  The short answer: It depends on the type of loan you want and the lender you ultimately decide on. Online lenders can get you funding as quickly as the next business day, while bank loans typically take at least a couple of weeks.

• What types of documents do I need to get a business loan?

  It can vary, but generally lenders will ask for the following documents:

  • A personal bank statement
  • A business bank statement
  • Your business's most recent tax return
  • A business plan including financial projections
  • Your business's license and information

  If you apply through a bank, your business might ask for many more documents, including a schedule of your business's debts, proof of collateral and even your personal resume.

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

Written by

Leanne Escobal

Senior Publisher

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Leanne Escobal is a senior publisher at Finder with more than 13 years of experience in financial products and services, with a focus on content strategy and marketing. She has completed the Canadian Securities Course (CSC®) as well as the Personal Lending and Mortgages course through the Canadian Securities Institute. Leanne holds a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio

Leanne's expertise

Leanne has written 201 Finder guides across topics including:

• Personal Loans
• Car Loans
• Business Loans
• Short-Term Loans
• International Money Transfers
• Make Money Online

Co-written by

Carmen Chai

Writer

Carmen Chai is a freelance writer at Finder, specializing in financial products. She is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. She has reported on personal finance, mortgages, and banking products for nearly a decade. See full bio