Best small business loans in Canada

You may be on the hunt for the best small business loans in Canada to take your company to the next level. Getting a loan for a business today is a lot different to what it was 20 years ago. Now, you have options beyond banks and other financial giants, but this means that finding a lender you can trust takes a bit more effort. You can also apply for business loans customized to your specific needs, from merchant cash advances to loans designed for start-ups or longstanding companies.

We’ve narrowed down the different types of business loans on the market, how to compare the best business loans, and tips to help you find the right business loan for your individual needs.

OnDeck Business Loan

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OnDeck offers a number of different loan options with different terms and repayment schedules, including traditional business loans, lines of credit and merchant cash advances. You can typically access the funds you receive in as little as 24 hours, making it one of the speediest lenders on our list of best small business loans in Canada. You'll get competitive pricing based largely on your credit score and the revenue that your business earns.

• Pros and Cons

  Pros

  • Easy online application process you can complete within a matter of minutes.
  • Speedy distribution of funds, so you can count on getting approved and accessing funds in as little as 1 business day.
  • High loan amounts of up to $300,000 with very little documentation required.
  • No need to put up collateral to secure your loan.
  • Several loan options available, including flexible and fixed repayment options, merchant cash advances and lines of credit.

  Cons

  • Your business must pull in monthly revenues of at least $100,000, with many clients expected to earn more than this.
  • Credit score requirements start at 600, even if your business makes a significant amount of revenue.
  • Start-ups can't apply
  • you'll need to be in business for at least 6+ months.

• More details

  Interest Rate	8.00% – 29.00%
  Loan Amount	$5,000 - $300,000
  Loan Term	6 - 18 months
  Fees	No additional fees
  Turnaround Time	in as little as 24 hours
  Loans Offered	Secured Term, Line of Credit, Merchant Cash Advance
  Serviced Provinces/Territories	All provinces and territories
  Minimum Revenue	$100,000/year
  Min. Credit Score	600
  Minimum Time in Business	6+ months

Interest Rate	8.00% – 29.00%
Loan Amount	$5,000 - $300,000
Loan Term	6 - 18 months

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Merchant Growth Business Loan

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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.

• Pros and Cons

  Pros

  • Easy online application process with a quick decision on qualifying.
  • Quick access to funds within 24 hours after signing off on your loan.
  • High loan amounts of up to $500,000.
  • No collateral required so you don't need to secure your loan with business assets.
  • Many loan types to choose from to suit your business needs.
  • No minimum credit score required to qualify.

  Cons

  • Monthly sales of at least $10,000 to take out a loan.
  • No home-based business allowed. Your business must have a physical location with at least 6 months left on the lease.
  • Start-ups can't apply. Your business must be more than 6 months old.

• More details

  Interest Rate	12.99% - 39.99%
  Loan Amount	$5,000 - $500,000
  Loan Term	3 - 12 months
  Fees	No application fees.
  Turnaround Time	24 hours
  Loans Offered	Unsecured Term, Line of Credit, Merchant Cash Advance
  Serviced Provinces/Territories	All of Canada
  Minimum Revenue	$10,000 /month
  Min. Credit Score	550
  Minimum Time in Business	6 months

Interest Rate	12.99% - 39.99%
Loan Amount	$5,000 - $500,000
Loan Term	3 - 12 months

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Loans Canada Business Loan

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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 up to a hand-picked list of lenders that will reach out to you to discuss your loan options. Using the Loans Canada comparison platform lets you pick the best small business loan for your personal situation.

• Pros and Cons

  Pros

  • Easy online application process you can complete within a matter of minutes.
  • You'll get quotes from multiple lenders to give you as many options as possible so you can find the best loan for your needs.
  • You can apply for as much as $500,000 in financing with a single application.
  • Free service so you can use the Loans Canada platform without incurring any charges.
  • You can consider many loan types, including instalment loans, lines of credit, commercial mortgages and merchant cash advances.

  Cons

  • Your business must make at least $120,000 in annual revenue.
  • Quotes come from affiliated providers so you'll only get to choose from lenders that are partnered with Loans Canada.
  • No physical locations so you won't get any in-person customer service.
  • No online quotes
  • instead you'll need to speak to lenders over the phone to consider your loan offers.

• More details

  Interest Rate	6.60% - 29.00%
  Loan Amount	$4,000 - $500,000
  Loan Term	3 - 60 months
  Fees	Wire / EFT Fee up to $99.95
  Turnaround Time	48 Hours
  Loans Offered	Unsecured Term
  Serviced Provinces/Territories	All Provinces
  Minimum Revenue	over $10,000/month
  Min. Credit Score	410
  Minimum Time in Business	100 days

Interest Rate	6.60% - 29.00%
Loan Amount	$4,000 - $500,000
Loan Term	3 - 60 months

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SharpShooter Funding Business Loan

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SharpShooter is one of the best small business loan options for young companies because it considers applicants who have been in business for at least 100 days, instead of 6 months which is a more common eligibility requirement. Instead, its emphasis is on your monthly income – your business must pull in at least $9,666 /month. It offers a number of different loans based on the needs of your business, including traditional business loans and merchant cash advances.

• Pros and Cons

  Pros

  • Receive a decision on your loan application in less than 24 hours with funds deposited into your account in less than 3 days.
  • Terms of up to 2 years, providing businesses with flexibility on repayment options.
  • Decent interest rates, starting at as low as 6.33%.
  • No collateral required so you don't need to put up an asset to secure your loan.
  • Low minimum credit score of 416.

  Cons

  • High interest rates for longer loan terms.
  • Administration fees, which will vary depending on factors like your credit history, type of business and how much you make each year.
  • Stricter criteria for long term loans. If you are aiming for a long-term business loan, you'll need to be in operation for 12 months to qualify.

• More details

  Interest Rate	Fee based, prime starting at 6.33%
  Loan Amount	$4,160 - $150,000
  Loan Term	3 - 24 months
  Fees	$35 NSF fee $45 incoming wire fee
  Turnaround Time	48-72 hours
  Loans Offered	Unsecured Term, Merchant Cash Advance, Invoice Factoring
  Serviced Provinces/Territories	All of Canada
  Minimum Revenue	$9,666 /month
  Min. Credit Score	416
  Minimum Time in Business	100 days

Interest Rate	Fee based, prime starting at 6.33%
Loan Amount	$4,160 - $150,000
Loan Term	3 - 24 months

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Lending Loop Business Loan

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Lending Loop is unique on our list of best small business loans, because it is Canada's first regulated peer-to-peer lending platform. Complete an online application in as quickly as 5 minutes to receive loan offers from anonymous investors interested in financing your business loan. 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.

• Pros and Cons

  Pros

  • Easy online application process you can complete within 5 minutes.
  • Receive funding from anonymous investors interested in financing your business loan.
  • Low interest rates starting at 4.96%.
  • Wide range of cash advance amounts ranging from $1,000 to $500,000.
  • Flexible repayment options from 3 months to 5 years.

  Cons

  • Your business must make at least $100,000 in annual revenue.
  • Lending Loop does not list its fees and charges online.
  • Limited customer support if you need assistance with your business loan.

• More details

  Interest Rate	Starting at 4.96%
  Loan Amount	$1,000 - $500,000
  Loan Term	3 - 60 months
  Fees	Establishment Fee: 1.00% - 6.00%
  Turnaround Time	2 - 14 days
  Loans Offered	P2P
  Serviced Provinces/Territories	All of Canada
  Minimum Revenue	$8,500 /month
  Min. Credit Score	640
  Minimum Time in Business	12 months

Interest Rate	Starting at 4.96%
Loan Amount	$1,000 - $500,000
Loan Term	3 - 60 months

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Shopify Capital Merchant Cash Advance

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If you're one of the many business owners using Shopify to manage your storefront and point of sale, its Merchant Cash Advance is a great option to inject capital into your company. Instead of a traditional business loan which comes with rigid terms, Shopify offers an alternative solution. Your repayments for your cash advance will be a percentage of your daily sales. That means repayments will fluctuate based on your sales for the day, which is helpful if your business is having a slow month or you need to keep cash flow open for other operational uses.

• Pros and Cons

  Pros

  • Shopify pre-qualifies your business and provides merchant cash advance offers you can choose from.
  • No credit check required because Shopify reviews your business's revenue, profit and daily sales before it offers funding.
  • No collateral required so you don't need to secure your loan with business assets.
  • Wide range of cash advance amounts ranging from to $2,000,000.
  • Remittance is a percentage of your daily sales instead of a set monthly payment regardless of how your business is faring.
  • Early repayment option once you repay 25% of your cash advance.
  • No set deadline for when you need to repay the entirety of your cash advance.

  Cons

  • Merchant cash advances do not help you build credit history for your business.
  • A daily remittance is automatically deducted from your sales until your cash advance and fees are repaid.
  • Shopify doesn't list its range of fees, but you will pay a charge for your MCA. The fee is worked into the total amount you need to repay.
  • Your business must use Shopify. Users receive and review MCA offers via their Shopify account.

• More details

  Interest Rate	N/A
  Loan Amount	up to $2,000,000
  Loan Term	Open-ended
  Fees	There is a fixed fee for your MCA, but Shopify does not disclose what the fee is online.
  Turnaround Time	2 to 5 business days after submitting your loan request.
  Serviced Provinces/Territories	Available across Canada
  Minimum Revenue	Shopify does not list eligibility criteria online other than being a seller on Shopify for at least 90 days. It will contact businesses if they qualify.
  Minimum Time in Business	Shopify does not list eligibility criteria online other than being a seller on Shopify for at least 90 days. It will contact businesses if they qualify.

Interest Rate	N/A
Loan Amount	up to $2,000,000
Loan Term	Open-ended

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CIBC Business Loan

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Businesses may be able to qualify for a CIBC bank business loan if they can prove that they meet certain eligibility criteria, including having a significant amount of industry experience, a detailed business plan, a high credit score and a personal financial stake in your business. You'll need to prove that your business generates positive revenue, meaning your inflows exceed your outflows for at least 12 to 24 months. For this reason, established companies may be more likely to qualify for a CIBC small business loan. You'll also need to be able to show that your business has the capacity to earn enough money to allow you to pay back your loan on time.

• Pros and Cons

  Pros

  • Flexible loan options, including secured and unsecured business loans with fixed or variable interest rates.
  • Loan amounts starting at a $10,000.
  • Long amortization periods of up to 15 years.
  • Other borrowing options, including overdraft protection or a line of credit.

  Cons

  • You can't apply for a CIBC business loan online
  • you must visit a branch to get your application started.
  • No loans for less than $10,000, which may be too much for some small businesses.
  • Interest rates aren't listed online so you'll have to visit CIBC in person to see what rate you qualify for.

• More details

  Loan Amount	starts at $10,000
  Loan Term	Up to 15 years
  Fees	No monthly fee, $150 to $1,000 setup fee, $50 to 150 renewal fee, no prepayment fees for variable rate loans,  $150 amendment fee
  Turnaround Time	Not disclosed online
  Minimum Revenue	Not disclosed online
  Minimum Time in Business	You’ll need to prove that your business generates positive revenue, meaning your inflows exceed your outflows for at least 12 to 24 months.

Loan Amount	starts at $10,000
Loan Term	Up to 15 years

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Scotiabank Business Loan

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Scotiabank small business loans are instalment-based loans that you can use to purchase fixed assets, such as real estate or business equipment. You can use your loan to finance future purchases or assets you've bought within 6 months from the loan application date. You may also be able to pay a little bit more to qualify for Scotiabank small business loan protection, which is a form of insurance that protects your payments. These loans may be backed by Scotiabank or the Canadian government, depending on what type of financing you need.

• Pros and Cons

  Pros

  • Easy online application process.
  • Other big banks typically don't allow online applications for a business loan.
  • Flexibility with customizing your loan with fixed or variable interest rates.
  • Lengthy terms for as long as 10 years.
  • High loan amounts of up to $1,000,000.
  • Other financing options available, including a line of credit or overdraft protection.

  Cons

  • Financing only applies to fixed assets, so you can't use the funds to supplement your cash flow or consolidate your business debts.
  • Interest rates aren't listed online, so you'll need to fill out an application to find out what type of interest rate you'll get.
  • Your loan must be secured by the asset you purchase, which means you'll have to forfeit that asset if you can't make your payments.
  • Bad credit isn't accepted unless you can get a guarantor or you secure your loan with a personal asset, such as your home.

• More details

  Loan Amount	$1,000,000
  Loan Term	3 to 10 years
  Turnaround Time	Not listed online
  Minimum Revenue	Not listed online
  Minimum Time in Business	Not listed online

Loan Amount	$1,000,000
Loan Term	3 to 10 years

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HSBC Small Business Loans

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With an HSBC small business loan, you'll have to decide if you want a fixed or variable interest rate on your loan and then agree to make repayments on any amount you borrow according to a set schedule. You can take out an HSBC small business loan for up to $250,000 if you don't want to put up any collateral. You can also qualify for up to $1.25 million towards the purchase of owner-occupied commercial property. Your business must not generate more than $5 million each year.

• Pros and Cons

  Pros

  • Fixed and variable interest rates available.
  • Quick online application and swift decision.
  • Range of funds available up to $250,000

  Cons

  • Set-up fees that are equal to a maximum of 1% of the loan amount.
  • You must have an HSBC chequing account.

• More details

  Interest Rate	N/A
  Loan Amount	up to $250,000
  Fees	On-time set up fee up to 1% of the loan amount
  Turnaround Time	Not listed online
  Minimum Revenue	below $5 million
  Minimum Time in Business	Not listed online

Interest Rate	N/A
Loan Amount	up to $250,000

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Canada Small Business Financing Program (CSBFP) Loan

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If you need money to establish or expand your small business, the Canada Small Business Financing Program (CSBFP) is on of the best business loan options to consider. These loans are backed by the government, so you can get access to funding you might not be able to qualify for on your own. They also come with some of the most competitive interest rates on the market. Any small businesses or start-ups operating for profit in Canada are eligible as long as they have gross annual revenues of $10 million or less. The funds can be used to buy or improve land, buy or improve new or used equipment, or to take out a lease or pay for renovations made to a leased property.

• Pros and Cons

  Pros

  • Funds can be used to purchase assets for your franchise, including equipment, software, or property as prime examples.
  • With a government-backed guarantee, CSBFP loans offer some of the best interest rates on the market.
  • Interest rates can be variable or fixed. For a variable rate, the maximum chargeable rate is the lender's prime + 3%. For a fixed rate, the maximum is the lenders' single family residential mortgage rate + 3%.
  • Apply for up to $1,000,000, depending on what you need the money for.

  Cons

  • You won't be able to use the term loan to fund day-to-day operations like payroll, inventory or other expenses.
  • You'll have to pay a 2% registration fee, plus the lender may charge any fees that they would typically charge for a conventional loan of the same amount.

• More details

  Loan Amount	Up to $1 million
  Loan Term	up to 15 years
  Fees	2% registration fee, plus the lender may charge any fees that they would typically charge for a conventional loan of the same amount.
  Turnaround Time	Not listed online
  Minimum Revenue	$10 million per year
  Minimum Time in Business	Not listed online

Loan Amount	Up to $1 million
Loan Term	up to 15 years

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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 have become increasingly popular among businesses in recent years, especially as banks have stricter eligibility requirements. Online lenders might come with higher interest rates and fees, but they also have higher acceptance rates and faster turnaround times. These lenders can sometimes provide the best small business loans 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. 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 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 lender and narrow down options for the best business loans in Canada. But you’re typically limited to the marketplace’s partners, and therefore, not exposed to all possible lenders and loan options.

Banks

Bank small business 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.

What banks offer business loans in Canada?

All big banks in Canada offer business loans and other business financing options. Choosing the best bank for small business loans in Canada will depend on your financing needs and on both your business and personal financial situation. There won’t be one best option for every business. To help narrow down your options, here is 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
	Up to $1,000,000 Variable and fixed interest rates Loan terms from 3 to 10 years Amortization for real estate up to 20 years	Scotiabank business credit cards Income Property Lending Program Scotia Flex for business Credit Line for business Black-Led Business Financing Program 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 15 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 $100,000 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 instalments 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 small 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 you to book an appointment to apply for a loan while others allow you to apply online at any hour of the day. Follow your lender’s application instructions and reach out to customer service if you have any questions. Before you submit your application, review it a few times to make sure all the information is accurate.
3. Get approved. Once again, the waiting game will vary depending on the lender you’re working with. Some online lenders provide an instant decision on your loan application and won’t keep you waiting for longer than one business day while others may take a week to provide an update on your application. Once you’re approved, you can proceed with verifying your identity and your business’s revenues before you 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?

Business financing is complex, with many moving parts feeding into the equation. 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. Learn more about the factors that can affect the cost of your business loan here.

How much can I borrow with a small business loan?

Small business loans range from as low as $200 for a merchant cash advance to as much as a couple million dollars via a secured loan with your assets on the line. The amount you can borrow will depend on the lender you choose, and personal factors such as your credit score, debt-to-income ratio and business revenue.

Across the board, you’ll be able to access 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 be able to borrow less if you’re just starting out or if you have a poor credit history.

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?

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.

  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.

  What to expect from business microfinancing

• 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.

Compare business loans in Canada

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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	$100,000/year	6+ months	Secured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000. 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.	Go to site More Info	Compare	loading Fetching your data...
Merchant Growth Business Loan		12.99% - 39.99%	$5,000 - $500,000	3 - 12 months	$10,000 /month	6 months	Unsecured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales. Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.	Go to site More Info	Compare	loading Fetching your data...
Loans Canada Business Loan		6.60% - 29.00%	$4,000 - $500,000	3 - 60 months	over $10,000/month	100 days	Unsecured Term	To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year). Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.	Go to site More Info	Compare	loading Fetching your data...

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Bottom line

There is no one “best” small business loan for everyone, but some lenders and loan types are better fits for specific companies and business needs. Understanding the type of loan you need is the first step toward getting a business loan that fits your unique business requirements. Check out our guide to learn more about business financing and find lenders that you and your business qualify for.

Frequently asked questions about small business loans

• 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.