Scotia business loans review

What is Scotiabank?

Scotiabank is one of Canada’s Big Five, so it’s one of the five largest banks in the country. Its history can be traced back to the founding of the Bank of Nova Scotia in 1832. As of October 2024, its assets total approximately $1.4 trillion.

Scotiabank has over 900 branches across the country and a nationwide network of almost 3,600 ABMs. It offers a full range of personal and business banking services. Additionally, Scotiabank trades on the Toronto Stock Exchange and New York Stock Exchange.

What are the types of Scotia business loans?

Small business owners can choose from the following types of Scotia business loans.

Scotia Term Loan for Business

The Scotia Term Loan for Business provides funds for purchasing fixed business assets. You can choose a fixed or variable interest rate and use the loan to finance purchases made in the last six months from the loan application date.

Loan amortization depends on the life of the asset you purchase, and you can begin the application process by contacting Scotiabank to arrange an appointment.

Canada Small Business Financing Program (CSBFP) loans

The Canada Small Business Financing Program (CSBFP) is designed to make it easier for small businesses to access funding. CSBFP term loans are 85% backed by the federal government and provide funds to:

• Purchase leasehold improvements or improve leased property
• Purchase or improve new or used equipment
• Pay for intangible assets and working capital costs

Business loan rates can be fixed or floating and are tied to Scotiabank’s prime rate. You’ll usually have to personally guarantee a portion of the amount you borrow, but the fact that loans are government-backed means you may be able to qualify for a larger loan amount than you would normally.

Scotia Flex for Business

The Flex for Business program allows you to use the equity in your home or commercial property to access credit to buy assets and manage cash flow. Under the program, you can hold multiple products under a single credit limit, including a Scotia Term Loan for Business, Credit Line for Business and a business credit card. You'll need to have been in business for at least two years to qualify for funding.

Pros of Scotia business loans

• Competitive rates. As a major bank, Scotiabank is able to offer competitive rates on Scotia business loans.
• Fixed or variable interest rates. You have the flexibility of choosing the type of interest rate that makes the most sense for your business budget.
• Convenient service. You can go into one of hundreds of Scotiabank branches across the country to speak to an adviser directly about your loan.
• Big Five Bank. You get the security and peace of mind of dealing with an established financial institution.
• Other financing options. You may be able to qualify for other forms of financing, such as a line of credit or overdraft protection, if you’re not sure about a business loan. Plus, if you want to manage all your business banking with a single financial institution, Scotiabank’s wide range of business banking services means you can do exactly that.

Cons

• Interest rates aren’t listed online. You won’t find out the type of interest rate you’ll get until you fill out your online application or speak to an adviser.
• Bad credit not accepted. You likely won’t be accepted if you have bad credit, unless you can get a guarantor or you secure your loan with a personal asset.
• Strict eligibility criteria. You’ll typically need to meet fairly stringent criteria to qualify for a Scotia business loan.
• Can’t submit an online application. You’ll need to make an appointment with a Scotiabank business advisor to begin the application process.

What are the interest rates for Scotia business loans?

Scotia business loan interest rates for the Term Loan for Business are not listed online. However, as you’re dealing with a major bank, you can expect a competitive fixed or variable rate for your business financing—provided you have good to excellent credit.

If you take out a term loan under the Canada Small Business Financing Program, the program rules dictate the maximum rate available:

How to qualify

You’ll need to meet certain requirements to be eligible for a Scotia business loan, although there are no specific criteria listed on the Scotiabank website. For example, you’ll likely need to have a good credit score. You may also need to show that you can afford the loan and have the necessary revenue coming in to make your monthly payments.

You’ll also typically have to meet additional criteria based on how much you want to borrow as well as the type of asset you’re looking to purchase. Speak with a Scotiabank adviser to find out more about what you’ll need to qualify.

How to apply

If you want to apply for a Scotia business loan, you’ll need to book an appointment with a Scotiabank business adviser to discuss your borrowing needs.

The exact documentation you need to provide will vary depending on your business structure, but you may need to supply:

• Proof of ID
• Trade name registration
• Business financial statements
• Latest income tax notice of assessment
• Bank account statements
• Bill of sale/purchase agreement for the asset being funded

What to expect once you receive your business loan

Now that you have your loan, you can use it to purchase the business assets you’ve outlined in your loan agreement. From there, you’ll need to start making repayments on your loan for the length of the term you’ve chosen.

You’ll typically pay back your money using automatic withdrawals from your bank account. Be sure to factor in your interest rates and additional fees to your total amount to make sure you can budget appropriately for repayments.

Bottom line

Scotia business loans offer competitive rates along with the security and convenience of dealing with a Big Five bank. Contact Scotiabank if you’d like more info about your funding options, but be sure to compare business loans from a range of lenders before deciding where to borrow.