RBC Business Loan Review

What is RBC?

RBC (also known as the Royal Bank of Canada) is Canada’s largest multinational bank. It serves over 16 million clients and is recognized as an industry leader in the financial sector. It provides small business financing to millions of Canadians, with a focus on long-term and government-backed loans.

What types of business loans are available through RBC?

There are 2 main types of business loans available through RBC:

1. Short-term and operating loans. These are suited for businesses with everyday borrowing needs – for example, if you want to cover short-term gaps in your cash flow, make large purchases or improvements to your business, or get easy access to operating funds.
2. Mid-term and long-term loans. These are suited for businesses with significant financing needs – for example, if you want to buy equipment or property, expand your operations, or set up a new company or location.

• Short-term and operating loans

  These loans can help to cover gaps in your cash flow and give you the money you need to purchase equipment, materials or inventory when you need them.

  1. Overdraft protection. RBC’s overdraft protection allows you to dip below zero and avoid paying non-sufficient fund (NSF) fees for negative balances.

  • Overdraft limit available up to $10,000 on most Business Deposit Accounts

  2. Royal Business Operating Line. This line of credit automatically injects money into your account when there’s a shortfall and takes the money back when there’s a surplus.

  • Credit lines start at $10,000

  3. CreditLine for Small Business. This type of financing lets you spend money on your line of credit as if it were a credit card.

  • No annual fee
  • Competitive interest rates
  • Earn 1 RBC Rewards point for every $2 you spend on your card
  • Use points to make purchases for your business, reward yourself or incentivize your employees

  4. Asset-based lending. Asset-based lending allows you to use the assets in your business or personal life to secure financing for higher amounts of money.

  • Committed financing for 2 to 5 years with no annual renegotiation of terms and conditions
  • Asset-based lending starts at $2 million

• Mid- and long-term loans

  Long-term loans are usually for large one-off purchases and can be for much bigger amounts than short-term loans. They’re typically used to purchase equipment or real estate or to pay for renovations or other forms of business expansion.

  1. Term loans. Term loans let you borrow large amounts of cash that you’ll then need to pay back in regular installments. These loans are typically secured business loans.

  • Available at fixed or variable annual interest rates
  • Fixed loans started at $10,000, while variable loans start at $5,000
  • Amortization or the term of your loan is in line with the life of the asset
  • Term up to 7 years, up to 25 when financing real estate

  2. Equipment leasing. Gives you the liquidity you need to upgrade your equipment, purchase an asset or perform maintenance at a moment’s notice.

  • Get up to 100% financing for the equipment your business needs
  • Financing for equipment includes taxes and installation
  • Lease payments can be tax deductible

  3. Equipment PurchaseLine. This revolving line of credit automatically regenerates funds when you make payments.

  • Both lease and term borrowing options are available
  • Continue to purchase equipment as your line of credit is paid down
  • Flexibility to move from a variable to fixed rate at your discretion

  4. Agricultural loans. These are term loans, lines of credit and commercial mortgages dedicated specifically to farmers.

  • Select a combination of financing loan products that are best suited to the needs of your farm

  5. Commercial mortgage. You can use this type of loan to lease or purchase multi-residential, industrial, office or retail properties.

  • Financing available for real estate properties over $1,000,000
  • Variable and fixed rate options

  6. Canada Small Business Financing Loan. These loans are backed by the Canadian government, and you can borrow up to $1 million to purchase or improve business assets.

  • Purchases made within the past 6 months are eligible for financing
  • 85% of the loan is guaranteed by the federal government
  • Maximum loan of $1 million (or $350,000 for equipment and leasehold improvements).

What makes RBC Business Loans unique?

RBC business loans are unique because they’re financed by a big Canadian bank. This means that there’s a certain level of convenience you’ll get when dealing with your loan in-person. You can simply book an appointment at the branch nearest you to sit down with an advisor.

As a big bank, RBC is also well-versed in dealing with unique financial situations that require more flexible financing options. This can include offering easy prepayment options and customized loan products that are designed to fit your business needs.

What are the benefits of an RBC Business Loan?

• Fixed or variable interest rates. You can choose a fixed or variable rate loan, depending on your preferences.
• Competitive rates. As a big bank, RBC can offer some of the lowest rates.
• Easy prepayment. You’ll be able to prepay your loan without penalty if you have a floating rate or a prepayment of up to 10% per year if you have a fixed rate.
• Low minimum amounts. You’ll be able to take out a variable-rate business loan for as little as $5,000 (which is low by industry standards).
• Convenient service. You can go into one of thousands of RBC branches to speak to an advisor directly about your loan.
• Many financing options. You’ll be able to finance your business using a business loan, line of credit or overdraft protection.

What to watch out for

• No online application. There’s no option to apply online so you’ll have to book an appointment at a branch to determine your eligibility.
• Interest rates aren’t listed online. There are no interest rates listed online which makes it difficult to compare quotes from several providers.
• Loan may need to be secured. You may need to put up your home, vehicle or business assets to secure financing.
• Bad credit not accepted. You likely won’t be accepted if you have bad credit unless you can secure your loan or get a guarantor.

Compare other business loans

1 - 3 of 3

Name	Product	APR Range	Loan Amount	Loan Term	Minimum Revenue	Minimum Time in Business	Loans Offered	Broker Compliance
Journey Capital Business Loan		16.00% – 25.00%	$5,000 - $300,000	4 - 24 months	$100,000/year	6+ months	Term Loan, 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. Journey Capital 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 siteMore Info Compare	loading Fetching your data...
Merchant Growth Business Loan		12.99% – 39.99%	$5,000 – $800,000	6 – 24 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 siteMore 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	Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.	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 siteMore Info Compare	loading Fetching your data...

loading

How much will my loan cost me?

The cost of your loan will depend on a number of different factors. These can include your personal credit score, the term of your loan, the type of loan you take out and the type of interest rates you choose (fixed or variable).

RBC doesn’t list its interest rates on its website which can make it difficult to estimate how much you’ll have to pay over the course of your loan. Your best bet would be to book an appointment with an RBC advisor to find out more about your potential costs.

Applicable fees

You’ll likely need to pay certain fees to set up a business loan with RBC. This is because there are overhead costs that the bank needs to pay to get your loan up and running (which are then passed on to you).

That said, these fees aren’t outlined transparently on the RBC website. You’ll likely want to book an appointment with an RBC advisor to get a better understanding about any extra costs that may be associated with your loan.

Do I qualify for an RBC Business Loan?

Though it’s not listed on the RBC website, you may need to meet certain requirements for your business to be eligible for an RBC Business Loan. Before you apply, you should make sure that you have a good to excellent credit score. It’s also important that your business be owned and operated in Canada.

RBC will also likely require you to show that you earn enough money to be able to pay your loan back on time. You may also need to meet additional eligibility based on the amount you plan to borrow and how you intend to use your funds. You should speak with an RBC advisor to find out more about what you’ll need to qualify.

How do I apply for an RBC Business Loan?

If you’re interested in applying for an RBC Business Loan, you’ll need to book an appointment to speak to an RBC advisor in person. At this appointment, you’ll usually be required to show documentation that proves your eligibility for a loan.

This can include paperwork that highlights how long you’ve been in business, how much your company makes, how you intend to spend the money you borrow and what your credit score looks like.

What happens after I apply?

RBC will review your application and make a decision. Since it doesn’t accept online applications, it may take multiple weeks for RBC to fully process your information.

Is RBC legit?

RBC is an industry leader in the banking industry and it has a wealth of experience dealing with clients from all around the world. As a client, you’ll benefit from well-established systems that allow you to open accounts or qualify for financing with as little hassle as possible. You can also rest assured that you’ll pay reasonable interest rates, and your personal data and accounts will be protected from fraudulent activity using advanced security measures.

I got the RBC Business Loan. Now what?

You can use your loan to purchase just about anything you need for your business. From there, you’ll have to start paying back your loan with monthly payments. You may also be eligible to prepay your loan early without penalty, depending on what type of loan you have.

Once you decide how long you want to take your loan out for, you’ll make your repayments using automatic withdrawals from your bank account. You should be sure to factor your interest rates and additional fees into your total amount to make sure you can budget appropriately when this time comes.

Bottom line

RBC is a strong contender if you’re looking for competitive interest rates and loan flexibility that only a major bank can offer. RBC doesn’t publish its rates online so you’ll need to fill out its application to find out what rates you qualify for. Before signing on the dotted line, be sure to compare business loans to find the right financing for your business.

Frequently asked questions

• Why doesn't RBC post its interest rates on its website?

  RBC likely doesn’t post its interest rates on its website because they often depend on personal variables unique to your loan decision. These can include what your credit score looks like, how long you take to repay your loan, how much income you make and how much debt you already have.

• What does RBC base its variable rate on?

  The floating interest rate is based on the RBC prime rate, which is the bank’s lending rate that’s based on the prime rate of Canada.

• What's the difference between a fixed and variable rate loan?

  The main difference between a fixed and variable rate loan boils down to predictability. A fixed rate loan has a more stable payment schedule. This means your interest rates and loan repayment amounts won’t fluctuate month-to-month, so you can easily fit your payments into a budget. A variable rate loan is less stable, but it also allows you to take advantage of better interest rates when the prime rate goes down.

• Can I apply for an RBC small business loan online?

  Unfortunately, you won’t be able to apply for an RBC Business Loan online. To fill out an application, you’ll have to book an appointment with a loan advisor at the bank. From there, they’ll assess your financial situation and help you fill out your application if they believe you might qualify.