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Best small business loans in Canada

Explore the best small business loans for Canadian entrepreneurs.

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

Best private business loan

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.

Journey Capital Business Loan

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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 16%, but you can get a lower rate if your credit and business are strong.

Best fast small business loan

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.

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. Get quick access to funds within 24 hours.

Best startup business loan

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.

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.

Best flexible business financing

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.

SharpShooter Funding Business Loan

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 $4,166 /month. It offers a number of different loans based on the needs of your business, including traditional business loans and merchant cash advances.

Best business term loan

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.

Driven Business Loan

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 2 - 24 months.

Best bad credit business loan

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.

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.

Best merchant cash advance

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.

2M7 Merchant Cash Advance

2M7 Financial Solutions is a business lender that offers Merchant Cash Advances as an alternative to traditional business term loans. It specializes in helping businesses that can't get standard business loans receive cash before they actually earn it. 2M7 assess you against your anticipated future credit and debit card sales in order to determine funding. It's a good option for businesses that haven't been operating for very long since they focus less on your credit history and instead emphasizes your company's future sales.

Best Canadian bank for a small business loan

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.

CIBC Business Loan

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.

Best bank for a long-term business loan

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.

TD Small Business Loan

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. For comparison, BMO offers 15 years, CIBC offers 15 years, RBC offers 25 years and Scotiabank offers 20 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.

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.

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 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:

BankBusiness loan featuresOther sample business financing
TD
  • 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
Scotiabank
  • 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
CIBC
  • 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
RBC
  • 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
BMO
  • 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
BDC
  • 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

Canada Small Business Financing Program

If you need money to establish or expand your small business, the Canada Small Business Financing Program (CSBFP) is one 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. You can get the CSBFP loan from a participating financial institution.

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:

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.

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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.

Bottom line

There is no one “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 about Canadian small business loans

Written by

Carmen Chai

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 profile

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