BDC business loans review
- APR Range
- Undisclosed
- Loan Amount
- Up to $100,000
- Loan Term
- Up to 5 years
Our verdict
Choose from a wide range of business loan types and large loan amounts, but take note that you'll typically need good credit to get funding.
The BDC is a crown corporation owned by the Canadian government. Much like the Big Five banks, you'll need to meet a strict set of eligibility requirements. Interest rates are not disclosed online, but through the BDC you can look forward to some relief—such as postponed principal payments—if your business is eligible for available benefits.
Best for: Business owners or entrepreneurs looking for financing to upgrade their businesses.
Pros
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Wide range of loan types
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Small business loans of up to $100,000 are available
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Option to defer principal payments for the first six months
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Offers consulting services to help you grow your business
Cons
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Interest rates not listed online
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No lines of credit offered
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Watch out for loan fees
What is the BDC?
The Business Development Bank of Canada offers business financing solutions for many purposes, including small projects, commercial real estate, working capital, business acquisitions or transfers, equipment purchases, purchase orders and more. Loan amounts and loan terms vary based on the type of financing you apply for.
Is the BDC legit?
It is. The BDC is a crown corporation owned by the federal government. Established in 1944, its mission is to provide financing and consulting services for entrepreneurs running small and medium businesses across Canada. The BDC’s mandate is set out in the Business Development Bank of Canada Act, which was passed in July 1995, and the bank is also a certified B Corporation.
Types of BDC business loans
The BDC offers the following types of financing:
| Financing solution | Loan amount | Loan term |
|---|---|---|
Small business loan | Up to $100,000 | 5 years |
Commercial real estate loan | Up to 100% financing | Up to 25 years |
Working capital loan | Not specified | Up to 8 years |
Purchase order financing | Up to 90% financing | Up to 18 months |
Equipment loan | Up to 125% of the purchase price | Up to 12 years |
Business purchase or transfer loan | Tailored to your needs | Not specified |
Loan for tech companies | Not specified | Not specified |
Loan for tech equipment | Up to 100% financing | Not specified |
Startup financing | Up to $250,000 | Up to 12 months |
Inclusive entrepreneurship loan | Up to $350,000 | Not specified |
What we like about BDC business loans
- Different types of financing. You can choose from a wide range of BDC business loan options.
- No application fees. There are no application fees to worry about when applying for a small business loan from the BDC.
- Easy online application process. Fill out an application and get a customized offer online.
- No prepayment penalties. There are no fees for paying off your small business loan early.
- Advisory services. The BDC has a nationwide network of over 500 business consultants across Canada to help you grow your business.
- Postpone principal payments. Depending on the type of financing, you can postpone principal payments for up to the first 6–36 months after taking out a loan.
What to watch out for
- Rates are not posted online. You’ll need to apply to find out what rates you’re eligible for.
- No business lines of credit. The BDC does not offer business lines of credit, so consider another lender if you’re looking for this specific product.
- Fees. A BDC small business loan comes with administration fees and an annual loan management fee of $150.
- No grants or subsidies. BDC is a commercial bank and does not offer government grants or subsidies.
Compare business loans
Finder Score for business loans
To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 10+ business loans are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.
Summary of BDC reviews
There are limited BDC reviews available online. However, those we could find were mixed, with some people complaining about high interest rates and poor customer service.
| Site | Details |
|---|---|
Google | 3.5 out of 5 based on 20 reviews (Montreal headquarters) |
Trustpilot | No BDC reviews available |
Better Business Bureau | No BDC reviews available |
Better Business Bureau accredited | No |
Better Business Bureau rating | C+ |
Customer reviews last verified on September 18, 2024.
Am I eligible for a BDC business loan?
The criteria for BDC business loans depend on the type of financing you’re applying for, but you’ll generally need to meet the following requirements:
- Run a Canada-based business
- Have been operating for at least 24 months and generating revenue
- The age of maturity in your province or territory
- Your business complies with the BDC’s legal and ethical criteria (for example, you’ll need to specify that your business does not promote or incite violence and that it doesn’t participate in specific industries like gambling and marijuana/cannabis)
You’ll also need to meet credit score requirements. For all businesses except those located in Quebec, a credit inquiry is done for:
- All shareholders who own 25% or more of the business
- Members of the board of directors
For businesses located in Quebec, all shareholders owning 25% or more of the business and the president of the board of directors will need to undergo a credit check.
How to apply for BDC business loans
To apply online for a BDC business loan, follow these steps:
- Visit the BDC website and select Apply now.
- You will be asked if you have a Client Space account. Client Space is a secure platform for financial services, but it is not required to proceed.
- Specify what type of loan you’re looking for.
- Enter the amount you want to borrow.
- Describe your project in 1,000 characters or less.
- Answer a few questions about what your business does to ensure your eligibility for a loan.
- Provide your name, address and contact information to create an account.
- Submit a loan application.
- Confirm your identity. You and your other shareholders or key business partners will need to verify your identity online.
What documents do I need to apply?
You’ll need to supply the following when applying for a business loan:
- Government-issued photo ID
- Unfrozen access to your credit file
- Business information as listed in your business registry
- Business GST number
- Bank account information
- Names, contact details and proof of ID for the company’s president, shareholders and members of the board of directors
- Year-end financial statements or notice of assessment and income tax returns
- A void cheque for your business bank account
How much does a BDC business loan cost?
The cost of a BDC business loan depends on factors like your personal and business credit history as well as your business revenue. You’ll need to apply with the BDC to find out exactly what sort of interest rate you qualify for.
You’ll also need to be aware of any loan fees that apply. With a BDC small business loan, you’ll need to pay administration fees and an annual loan management fee of $150. However, there are no application fees or prepayment penalties to worry about.
Bottom line
If you’re looking for a small business loan, equipment financing or a wide range of other types of business financing, the BDC is well worth checking out. There are several loan options available and flexible terms, but you’ll generally need good credit to qualify. Check out our business loans guide and compare a range of lenders to find the right loan for your business.
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