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 from 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.
Private business loans are a solid option if you’re looking for alternatives to bank business loans. Direct private lenders generally have easier eligibility criteria and faster approvals than banks. Rather than having strict requirements for your credit score or revenue, they take a more holistic approach and look at your overall financial situation.
| Interest Rate | 8.00% – 29.00% |
|---|---|
| Loan Amount | $5,000 - $300,000 |
| Loan Term | 6 - 18 months |
Online lenders are faster at approvals and funding than banks because they require less paperwork and don’t need to conduct any in-person interviews. You can get a business loan from alternative lenders within 24 to 72 hours, but their rates will be less competitive than banks.
| Interest Rate | 12.99% - 39.99% |
|---|---|
| Loan Amount | $5,000 - $800,000 |
| Loan Term | 6 - 24 months |
When you’re a startup it can be more difficult to get a business loan than established businesses with years of revenue. Applying to loan search platforms will help because they can match you with offers based on your unique profile. These platforms typically work with a large network of lenders and can help narrow down financing for you.
| Interest Rate | 6.60% - 29.00% |
|---|---|
| Loan Amount | $4,000 - $500,000 |
| Loan Term | 3 - 60 months |
Lenders with flexible financing can offer small to large loan amounts, short to long loan terms, fixed term or revolving credit, and unsecured or secured options. Applying to a lender with flexible loan options helps if your needs are unique and you’re looking for a tailored solution.
| Interest Rate | Fee based, prime starting at 6.33% |
|---|---|
| Loan Amount | $1,000 - $300,000 |
| Loan Term | 3 - 24 months |
A P2P business loan involves a large group of investors funding your loan. It’s an option to consider if you’re looking for a non-bank business loan with competitive rates. The stronger your business, the more competitive your interest rate. If your business is not in an ideal place right now, be prepared to be offered a higher rate and to wait longer to get funded. It can take more time to find investors willing to lend to riskier applications.
| Interest Rate | Starting at 4.96% |
|---|---|
| Loan Amount | $1,000 - $500,000 |
| Loan Term | 3 - 60 months |
With business term loans, you receive a lump sum that you’ll repay in installments over time. With alternative lenders, the longest loan term you can get is typically 24 months, though some may offer up to 60 months. Banks usually offer terms of up to 60 months.
| Interest Rate | Starting at 4.00% |
|---|---|
| Loan Amount | $500 - $500,000 |
| Loan Term | 2 - 24 months |
If you have bad credit and need a loan for your business, it can be difficult to find a lender who’s willing to take on the risk of financing you. This is why it can be helpful to apply to a business loan broker or loan search platform that’s partnered with various lenders. By filling out one application, you can get matched with lenders who are open to giving you a bad credit business loan.
| Interest Rate | 6.60% - 29.00% |
|---|---|
| Loan Amount | $4,000 - $500,000 |
| Loan Term | 3 - 60 months |
Merchant cash advances are an alternative to traditional business loans. They are generally easier to get. With this type of financing, you get a lump sum upfront and repay it based on a percentage of your future sales (via credit card receipts). You’ll repay daily, weekly or monthly, and the cost of getting the loan is included in these payments.
| Interest Rate | Varies |
|---|---|
| Loan Amount | $5,000 - $350,000 |
| Loan Term | 3 - 6 months |
The major banks are a popular option for small businesses. They’ll work with you to customize a financing solution suited for your needs. They can offer better rates than alternative lenders, but they have stricter eligibility requirements and need more paperwork. You will also need to visit a branch for an interview.
| Loan Amount | starts at $10,000 |
|---|---|
| Loan Term | Up to 15 years |
Banks offer the best solutions when you need to make large purchases, such as equipment and real estate. Compared to alternative lenders, they offer larger amounts and longer loan terms at better rates. Banks are a strong option when you have good credit and positive revenue.
| Loan Amount | $25,000 - $500,000 |
|---|---|
| Loan Term | 1 to 5 years |
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.
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 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 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 search platforms are sometimes confused with peer-to-peer lenders, but they’re not quite the same. Rather than matching you with investors, online loan search platforms match you with lenders. It’s an easy way to see a wide selection of lenders and narrow down options for the best business loans in Canada. But you’re typically limited to the platform’s partners, and therefore, not exposed to all possible lenders and loan options.
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.
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:
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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:
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:
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.
When you apply for one of the best small business loans in Canada, you may be asked to provide the following information:
You may also need financial and legal documentation, including:
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.
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Compare the best business loans| Principal | $ |
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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.
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:
Click on one of the following loans to find out which type of financing might work best for your small business.
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.
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