Methodology for rating business loans

Since choosing a business loan is a big commitment, our editors objectively compare business loans and rank them on several different benefits and features to give you an overall rating of how useful each loan might be.

We consider 11 key factors in our ratings:

What factors do we take into account?

Our ratings

We rate business loans using a system of one to five stars. While our ratings are designed to help you assess a business loan’s strengths and weaknesses, the best way to inform your decision is to read our full business loan reviews for an in-depth breakdown of fees, features, pros and cons.

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Keep in mind, however, that our ratings may not indicate the best loan for your needs or your business’ needs. Based on your situation, you may find certain features to be more or less important, so compare all options available on the market before you apply for a loan. While we looked at a range of business loans available for our ratings, we did not compare all the products available in the market.

How we rate minimum loan amounts

Typically, business loans start around $1,000. We consider any starting amount of $500 or under to be the most competitive and worthy of 5 stars, since it provides the most flexibility for borrowers.

★★★★★ — $500 and under

★★★★★ — $501 to $1,000

★★★★★ — $1,001 to $2,000

★★★★★ — $2,001+

How we rate maximum loan amounts

Many business loan lenders cap out around $500,000, but a few offer loans up to $5,000,000. We gave the highest rating to any lender that offers loans at or above the $2,500,000 range. The lowest rating goes to lenders that offer loans under $100,000, since that meets fewer needs.

★★★★★ — $2,500,000+

★★★★★ — $1,000,000 to $2,499,999

★★★★★ — $300,000 to $999,999

★★★★★ — $299,999 or less

How we rate turnaround time

Turnaround time is how long it takes to get a loan from the moment you start an application to the moment the money appears in your bank account.

The most common turnaround time for a business loan provider with an online application is one or two business days. Lenders that beat that with same-day financing earn a perfect score. Those that lag behind didn’t do as well.

★★★★★ — Same day

★★★★★ — 1 to 2 business days

★★★★★ — 3 to 5 business days

★★★★★ — Over 5 business days

How we rate fees

Lenders that charge no fees at all — including prepayment, origination and wiring — earn 5 stars. We did not take late or NSF fees into account since these are common fees among lenders.

★★★★★ — No prepayment, origination or wiring fees

★★★★★ — No origination fees, but prepayment fee or wiring fee charged

★★★★★ — Origination fee or wiring fee charged, no prepayment fee charged

★★★★★ — Charge origination, prepayment and wiring fees

How we rate minimum APRs

The most competitive starting APRs clock in somewhere under 4.25%.

★★★★★ — Below 4.25%

★★★★★ — 4.26% to 6.00%

★★★★★ — 6.01% to 9.00%

★★★★★ — Over 9.01%

How we rate maximum APRs

Chances are you’re not going to get the lowest rate a lender offers, which is why we consider the entire range. Any lender with an APR cap above 19.99% is considered to be a bad deal — your credit card probably offers a better rate.

★★★★★ — Below 11.99%

★★★★★ — 12.00% to 19.98%

★★★★★ — Over 19.99%

How we rate minimum loan terms

A shorter loan term can provide more flexibility to the borrower – and means a cheaper loan.

★★★★★ — 3 – 5 months

★★★★★ — 6 months

★★★★★ — 7 – 9 months

★★★★★ — 10+ months

How we rate maximum loan terms

A lengthier loan term can also provide more flexibility to the borrower – but it can increase the amount of money you’ll pay in interest. That said, we reward providers higher for this flexibility, especially if they offer longer loan terms of 5+ years.

★★★★★ — 60+ months

★★★★★ — 60 months

★★★★★ — Less than 60 months

Products offered

Some business loan providers will specialize in certain types of financing such as cash advances, while others may offer a variety of products. Having access to multiple product types provides more flexibility for borrowers.

★★★★★ — Offers 5 or more products

★★★★★ — Offers 4 products

★★★★★ — Offers 3 products

★★★★★ — Offers 2 products

★★★★★ — Offers only 1 product

How we rate customer support

The quality of customer support can make or break the customer experience. We evaluate the ways in which you can get help should you need timely assistance. We consider online chat, phone, email and in-person assistance as ways to get in touch.

★★★★★ — At least 3 ways to get help, with timely customer service

★★★★★ — At least 2 ways to get help, timely customer service

★★★★★ — At least 1 way to get help

★★★★★ — Slow customer service, only 1 way to get help

★★★★★ — Difficult to find out how to get in touch with customer support

How we rate the online application

If a lender has an online application that is quick and easy to fill out, it earns 5 stars. If you can’t apply online or have to visit a branch to finish your application, it earns 1 star. Ratings in between take into account how lengthy and user friendly the online application is.

★★★★★ — Application takes less than 10 minutes and is user friendly.

★★★★★ — Application takes more than 10 minutes but is user friendly.

★★★★★ — Application takes more than 15 minutes but is user friendly.

★★★★★ — Application takes more than 15 minutes and is difficult to fill out.

★★★★★ — No online application available.

How do we decide which features are more important?

Each factor in our scoring methodology is carefully considered. Our experts base this on user and market research to ensure it reflects what’s important to you. For instance, we weigh APR and fees more heavily than any other category.

Here is the breakdown of weighting for each category:

What we don’t consider

Our star ratings can tell you how a lender stands up to the competition. But what it can’t tell you is if it’s the right loan for your specific needs. In addition to our star rating, you might also want to look at the following factors before you fill out an application:

• Availability. Some lenders don’t operate in all provinces and territories, meaning they might not be available to you.
• Products offered. Some lenders will only offer merchant cash advances or unsecured term loans, while others will offer an array of products like secured loans, lines of credit and invoice factoring.
• Credit requirements. Some lenders might be better for applicants with different types of credit scores. Most require good credit at a minimum, but some might specialize in loans for fair- or bad-credit borrowers. When applying for a business loan, a lender will likely consider your personal credit score at minimum – and will consider your business credit score if it has one.
• Other eligibility requirements. Business lenders have minimum revenue requirements, minimum time in business, and other requirements that can affect how easy it is to qualify for a loan.

Does Finder compare all business loans in the market?

We review most of Canada’s popular and well-regarded business loan providers, including direct providers and brokers – and we’re adding more all the time.

Written by

Emma Balmforth

Producer

Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog. See full bio