32+ business loans for small to large businesses in Canada

There are many types of small business loans in Canada that you can choose from based on your business needs. Find out more about where you can shop for business loans, and the features you can expect to find with each loan type. Compare lenders and learn more about how to apply and qualify for a business loan in Canada.

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Compare small business loans in Canada

Compare various types of short- and long-term financing for small businesses.

Lender	Key features	Eligibility requirements
	Borrow $5,000 - $300,000 Terms of 4 - 24 months APR of 8% – 29%	At least 6+ months in business $100,000/year minimum revenue 600 minimum credit score	Go to siteRead review
	Borrow $5,000 – $800,000 Terms of 6 – 24 months APR of 12.99% – 39.99%	In business for at least 6 months Minimum revenue of $10,000 /month	Go to siteRead review
	Borrow $500 - $500,000 Terms of 3 - 60 months APR of 6.99% - 46.96%	Operational for at least 9 months Minimum revenue of over $10,000/month 410 minimum credit score	Go to siteRead review
	Borrow up to $300,000 Terms of 12 - 60 months APR: 5.49% - 22.79%	In business for at least 100 days Minimum revenue of $4,166 /month minimum credit score	Read review
	Borrow $10,000 - $250,000 Terms of 3 - 6 months APR varies	In business for at least 90 days Minimum monthly revenue of $15,000	Read review
	Borrow $5,000 - $300,000 Terms of 3 - 24 months APR not specified	At least 6 months in business Minimum revenue of $120,000 per year Dedicated business bank account	Read review
	Borrow $15,000 – $1,500,000 Terms of 6 - 36 months APR not specified	An annual revenue of $120,000+ for your business Business established for at least 1 year 8+ business account deposits per month Total business ownership must equal 80%	Read review
	Borrow up to $250,000 Terms of 3 - 24 months APR: From 9.99%	Business operations for at least 6 months Minimum monthly sales of $10,000 No open bankruptcies
	Borrow up to Terms up to 18 months APR not specifed	In business more than 2 years Annual sales over $100,000 Regular deposits into your business bank account
	Borrow $5,000 - $150,000 Terms of 6 - 24 months APR from 15% for a 6-month term, longer terms come with higher rates	In business for at least 1 year Annual revenue of at least $100,000 Minimum average bank balance of $3,000 Majority owner(s) must provide personal guarantee
	Borrow $5,000 – $250,000 APR and term not specified	No eligibility criteria specified

Featured picks

Go to site

$5,000 – $300,000
Loan amount

16% – 25%
APR

4 - 24 months
Term

• Key Facts
• Pros + Cons
• Details

Journey Capital is an online business loan provider that offers fast business loans in Canada ranging from $5,000 to $300,000. It also offers lines of credit up to $50,000. You can apply entirely online or by phone. Full Review

• High loan amounts
• funds disbursed in as little as 24 hours.

• High revenue and credit score requirements
• startups aren't eligible.

Loan amount	$5,000 – $300,000
APR	16% – 25%
Term	4 - 24 months
Interest Rate Type	Fixed
Min. Credit Score	600
Fees	No additional fees
Turnaround Time	in as little as 24 hours
Serviced Provinces	All provinces and territories

Go to site

$5,000 – $800,000
Loan amount

12.99% – 39.99%
APR

6 – 24 months
Term

• Key Facts
• Pros + Cons
• Details

Merchant Growth provides alternative financing solutions for small businesses, including business loans, lines of credit and merchant cash advances. Business owners can borrow up to $800,000, and once approved, funds are usually released within 24 hours. Full Review

• High loan amounts
• multiple loan types
• loans approved quickly
• reasonable interest rates.

• Requires monthly sales of $10,000
• credit score of at least 550
• not suitable for startups.

Loan amount	$5,000 – $800,000
APR	12.99% – 39.99%
Term	6 – 24 months
Interest Rate Type	Fixed
Min. Credit Score	550
Fees	No application fees.
Turnaround Time	24 hours
Serviced Provinces	All of Canada

• About our promoted products

  Our ‘promoted’ products are presented as a result of a commercial advertising arrangement or to highlight a particular feature. Promoted products are not a recommendation, an indication a product is the best in its category, nor represent all products in the market. It is important to compare your options and find the right product for you.

Features of small business loans in Canada

• Purpose. Lump sum amount that can be used for many purposes, including expansion, equipment purchases, working capital, and debt refinancing.
• Loan amount. Varies by lender. Many lenders offer between $500 and $500,000, but some will lend over $1 million.
• Term. Terms usually range from 1 to 5 years, but you may get longer to repay with larger loans.
• APR. Varies by lender. Choose from fixed or variable rates, typically ranging from 4% to 39.99%.
• Collateral. Some lenders require collateral, some don’t. You’ll usually get lower interest rates if you secure your loan with business assets.
• Eligibility. Whether you qualify usually depends on factors such as business size, financial history, credit score, and the purpose of the loan.

List of banks offering small business loans in Canada

Features of bank business loans in Canada

• Purpose. Lump sum amount that can be used to cover operating expenses, buy or lease equipment, expand operations, pay for real estate and much more.
• Loan amount. Can range from $5,000 to $5 million or more.
• Term. Terms usually range from 1 to 5 years, with some lenders offering longer terms.
• APR. Varies by lender. Choose from fixed or variable rates, typically ranging from 4% to 20% (since bank loans are typically reserved for those with good-excellent credit).
• Collateral. You’ll usually get lower interest rates if you secure your loan with business assets.
• Eligibility. With most banks, you’ll need to be in operation for a certain period of time, or meet minimum revenue and credit score requirements.
• Prepayment penalties. Some banks may impose prepayment penalties for early repayment of a small business loan in Canada.

List of credit unions offering business loans in Canada

Features of credit union business loans in Canada

• Purpose. Some loans are open for any use, while others may be tied to specific purposes, such as funding agricultural or construction projects.
• Competitive interest rates. Credit unions usually offer competitive interest rates compared to banks and other financial institutions.
• Smaller loans. Most credit union business loans in Canada will be for smaller amounts than the bank (typically capping out at $300,000 – $500,000).
• Personalized service. Since credit unions are community-based and member-driven organizations, you’ll often get more personalized service.
• Flexible loans. Credit unions tend to put your best interests in mind, over their own bottom line, so they may offer more flexibility with repayment than other institutions.
• Membership requirements. You’ll usually need to be a member of the credit union you want to apply with (if you’re not, you can easily sign up for a small fee).
• Collateral requirements. You may be expected to provide collateral to secure your loan, especially for commercial real estate or equipment financing.

List of lenders offering equipment financing/leasing

Features of equipment financing and leasing in Canada

• Purpose. Lets you buy or lease equipment or vehicles you need for your business.
• No need to purchase equipment outright. By leasing or financing equipment, you can preserve your capital for your daily operations.
• Tax benefits. You may get tax deductions for payments you make towards your equipment lease or loan.
• Equipment and vehicle upgrades. If you lease equipment instead of buying it outright, you can stay up to date on the latest technology and upgrades.
• Frees up debt-revenue ratio. Leasing equipment can keep large purchases off your balance sheet, which will free up your debt-revenue ratio.
• No ownership responsibility. At the end of the lease, you can return your equipment and don’t need to worry about selling or upgrading it.
• Lower payments. You’ll usually pay less each month for a lease than you will for a loan.
• Credit building. Equipment financing can help build your business’s credit history and improve its credit score, making it easier to secure future financing.

List of lenders offering invoice factoring or financing

Features of invoice factoring and financing

• Purpose. Sell your outstanding invoices for a discounted price (invoice factoring) or borrow against them to generate cash flow for your business (invoice financing).
• Flexible loans. Can be used as a one-time solution or as a recurring financing method, depending on your business’s needs.
• High amounts (but high fees). Borrow up to 75% – 90% of the value of your outstanding invoices (but pay a fee worth 10% – 25% of the invoices’ value).
• Doesn’t affect credit score. The loan will be paid back as your clients pay their outstanding invoices.
• Credit risk protection. The factoring company assumes the credit risk of the invoice, reducing the risk for your business.
• No need for collateral. This type of financing is secured by your invoices, any money that comes in to repay your invoices will go to the lender.
• No impact on personal credit. Invoice financing doesn’t affect your personal credit score.

List of lenders offering business lines of credit

This list doesn’t include banks or credit unions.

Features of business lines of credit in Canada

• Purpose. A line of credit provides a source of ongoing funds that you can borrow against and repay as needed.
• Flexible access to funds. Your business can access funds whenever you need them without the hassle of reapplying for a loan each time.
• Large amounts. Apply for $10,000 to $500,000, depending on factors such as your credit score and the financing needs of your business.
• Secured or unsecured. You can get approved with or without collateral depending on the lender.
• Helps to build credit. If you use your funds responsibly, your business credit score will usually go up and you could then qualify for higher amounts.

List of lenders specializing in revenue-based financing

Features of revenue-based financing in Canada

• Purpose. Borrow money that you repay with a percentage of your ongoing gross revenues.
• Repayment tied to business earnings. Your repayment amounts will be tied to a percentage of your revenue (usually 1% to 3%, but as high as 8%).
• No fixed term. You won’t repay your loan on a set term, instead your repayments will be based on your revenue, which can fluctuate over time.
• Factoring rate instead of interest. You’ll usually need to repay your loan based on a factoring rate (for example, 1.5x the amount of your original loan).
• No need for collateral. This type of financing is secured by your future sales so there’s no need to put up any other type of collateral.
• Flexible repayment. Revenue-based financing gives your business the flexibility to repay only what you can afford, based on a small percentage of your revenue.
• Best for businesses with predictable revenue. This type of financing is best for businesses with predictable revenue such as SaaS or e-commerce businesses.

List of lenders specializing in business/merchant cash advances

Features of business/merchant cash advances

• Purpose. Similar to revenue-based financing, merchant cash advances let you borrow money that you repay with a percentage of your daily credit/debit card sales.
• No fixed term. You won’t repay your loan on a set term, instead your repayments will fluctuate based on how much your business earns.
• Factoring rate instead of interest. You’ll usually need to repay your loan based on a factoring rate (for example, 1.2 – 1.5x the amount of your original loan).
• No need for collateral. This type of financing is secured by your daily sales so there’s no need to provide collateral on top of your daily repayments.
• Easy to qualify. As long as your business already makes a decent revenue, it should be relatively easy to qualify for financing through a merchant cash advance.
• Best for service-based businesses. This type of financing is ideal for service-based businesses that make high card sales (for example, retail stores and restaurants).

Where to get business loans

There are generally 3 main options where you can apply for business loans in Canada.

1. Online business loan providers

• Often easier to get than bank business loans
• Less paperwork and shorter application
• Less strict eligibility requirements (lower credit score requirements)
• More likely to fund startups

Examples of online lenders include direct lenders, peer-to-peer (p2p) platforms and business loan brokers.

• Direct lenders. Direct lenders fund your loan themselves and often handle all aspects of the application process in-house.
• Peer-to-peer (p2p) lenders. p2p platforms act as a liaison between businesses and the everyday Canadians who want to invest in them.
• Business loan brokers. Brokers are loan comparison sites that let you compare multiple lenders so you can find the best loan.

2. Bank business loans

• Best for established businesses
• Larger amounts and higher interest rates than other loans
• Strict eligibility criteria (high revenue/credit score requirements)
• In person application in most cases

3. Credit union business loans

• More flexible loans than banks
• Smaller amounts (may be capped at $100,000 – $300,000)
• Only members can typically apply
• Less strict eligibility requirements

How to compare features of small business loans in Canada

There are a number of factors that you should consider when applying for a business loan:

• Loan amounts. Some lenders offer relatively small loans while others will give you up to $5 million if you qualify. Check a lender’s minimum and maximum loan amounts before you borrow to make sure the loan will meet your needs.
• Interest rates. Rates vary by lender depending on factors such as your credit score, business size and annual revenue. Banks generally offer the most competitive rates, and their current prime rate is 5.45%. Learn more about business loan interest rates.
• Loan terms. Loan terms can range from 6 months to 25 years, depending how much you borrow and the collateral used. You’ll want to look for a term that gives you manageable repayments without charging you too much interest.
• Fees. Many small business loans come with hidden fees that can drive up the cost of your loan. Check for origination or setup fees, early repayment penalties, or late/missed payment fees.
• Repayment options. Some loans let you repay your balance in regular installments while others take a portion of your monthly sales. Pick the option that makes the most sense for your financial situation.

What are the interest rates for a small business loan in Canada?

Your interest rate will depend on a variety of factors such as your credit score, loan type, amount and term. Bank prime rate is currently 5.45%.

To qualify for lower interest rates, you’ll need to have the following:

• Good or excellent personal/business credit score
• Stable, positive cash flow (as opposed to seasonal, cyclical or negative cash flow)
• Excess net income that can comfortably cover loan payments
• In business for at least two years
• Able to provide collateral

The candidates that meet these criteria have the highest probability of repaying the loan, which is why they receive the best rates.

Small business loan calculator: Calculate your monthly payments

What do lenders look for when offering business loans?

You’ll need to provide the following information when applying for business loans in Canada:

• Business age. You have the highest chance of approval with the bank if you’ve been in business for at least 2 years. Some online lenders will let you qualify with 6 months or more in business, but you may need to look for specialized funding if you’re a startup.
• Minimum credit score. You’ll typically need a minimum credit score of 660 to qualify for a business loan at favourable rates. You can get a loan with a lower score if you’re willing to accept higher rates or put up an asset like your home or vehicle as collateral.
• Monthly or annual revenue. Your business revenue will be a key factor that lenders will use to assess how much you can borrow. The higher your revenue, the more likely you are to be approved for higher loan amounts.
• Collateral. You can use assets such as company equipment, vehicles and property as collateral to secure your loan. This will get you lower interest rates, but you risk losing your assets if you default on your loan.
• Commitment. Lenders will look at how much cash you’ve put into your own business before they fund a loan. They may also want to see a professional business plan and revenue projections to better understand the long-term sustainability of your business.

How to apply for a small business loan in Canada

Here’s what you can expect when you apply for a small business loan in Canada.

1. Know what your business needs. If you need a lump sum of cash, aim for a business loan. For working capital, try a line of credit or a merchant cash advance. For new equipment or a fleet of vehicles, look into equipment financing. Determine the purpose of the funds to help you narrow down your choices.
2. Get prequalified. Choose a few lenders that look good, and try to prequalify for funding. Fill out an application to pre-qualify online or set up a call with your chosen lenders to learn more about their options and get a feel for their customer service. Once you find the best offer, or the best overall fit for your business, submit a formal application.
3. Go through a formal application process. Once you’re pre-approved and accept an offer, you’ll usually be assigned an account manager. They can help you submit information about yourself and your business, along with any required documents. In some cases, you may also need to go through a business loan interview or allow your lender to conduct a site visit.
4. Review and sign your documents. Make sure you understand the terms and conditions of your business loan before you sign. If you don’t understand a clause or term, ask your lender — or better yet, a lawyer. That way, you won’t be hit with any surprises down the road.

What documents do I need to qualify?

You’ll need the following documents to apply for a small business loan in Canada.

• Government-issued ID. Driver’s licence or passport to show you meet age and residency requirements.
• Business bank statements. Recent business bank statements to show cash flow.
• Tax returns. Business tax returns to show your annual revenue. You may also need to provide personal tax returns if you have personally guaranteed your loan.
• Business plan. More common with banks and credit unions, some online lenders also ask for a business plan – or at least financial projections.
• Profit and loss statement. Also called an income statement, your P&L statement breaks down your company’s net revenue and helps your lender verify how much debt your business can afford to take on.

How long does it take to qualify for a small business loan?

It can take a few days to a few weeks, depending on your lender. Banks and credit unions will usually take longer, while online lenders tend to have the fastest turnaround times. The best way to speed up your application is to fill it out correctly, and have all of your documentation ready to submit when you apply.

Small business loans in Canada for bad credit

Not all lenders will lend to you if you have bad credit, but there are still plenty of small business loans in Canada for bad credit. Banks usually require good-excellent credit scores, while credit unions and online lenders will typically be more lenient. These lenders will usually look at other factors such as your monthly revenue to determine your loan.

You can usually improve your chances of getting a business loan with bad credit if you secure your loan with your business or personal assets (like your home, storefront or a fleet of vehicles). Just be aware that your lender will be able to claim these assets if you fail to pay back the loan.

Bottom line

There are many types of financing available to help you with your business. You can borrow a lump sum of money with a business loan, lease or buy assets with equipment/vehicle financing or cover your daily expenses with a line of credit or other forms of financing that you repay based on your revenue. Once you decide what type of financing you need, compare lenders to find the best deal.

Frequently asked questions

• How hard is it to get a small business loan in Canada?

  It depends on the type of financing you're looking for. Bank loans can be more difficult to qualify for, especially if you have poor credit or a less established business. Online lenders and credit unions tend to have less strict eligibility requirements.

• How long will it take to process my application?

  That depends on your lender. Online lenders will typically approve you in a matter of hours or days. Banks may need a few weeks to go through your application details and supporting documents. An easy way to find out how long it will take to process your business loan in Canada is to ask your lender directly.

• How do I refinance a business loan?

  Refinancing your business loan comes in different shapes and sizes. Your options include extending the terms of your current loan, applying for a brand new loan to pay off existing debts or choosing a different loan product altogether, such as a business line of credit.

• Do I need to have a business credit score to apply?

  Not necessarily, but it can help build a case for your business. You can use it to complement your personal credit score, which most lenders will also review when determining your eligibility. Many lenders will want you to sign a personal guarantee that you'll repay your loan, which is based on your personal score, and your personal score will go down if you default.

• Can I get a business loan without collateral?

  Definitely! If you don't have assets to put up or you would rather not use them as collateral to secure your loan, you can apply for unsecured business loans in Canada. This type of loan uses your credit score to determine if you qualify. The downside is that you'll usually pay higher interest rates than with secured loans, and your credit score will go down if you default.