This may be your first time taking out a small business loan, or perhaps you’ve done it before. Regardless of your experience, you want to have a handle on the best business loan rates in Canada. As a result, you can compare the pros and cons and choose the best lender for you and your business. Below we’ve put together a list of competitive lenders. Use this to research your options. Then you can select a lender with the lowest rates and the least amount of drawbacks.
Canada’s Best Small Business Loans
Read through this list below to compare the best small business loans (Canada) for free!
1. Merchant Growth
*Rates starting at 12.99% – Learn More!
Merchant Growth is an online lender that provides loans to various small business ventures. For example, restaurants, retail, salons and spas, e-commerce, automotive and more! On top of helping a range of industries, Merchant Growth offers a variety of loan products. From merchant cash advances to fixed loans and everything in between, you can find a loan matching your business needs. This lender also offers flexible financing repayment plans as well as e-commerce financing.
Key features:
– Loan amounts up to $500,000
– Simple online application process
– Quick qualifying decision and access to funds within 24 hours
– Variety of loan types
– No collateral required
– No minimum credit score is required
Drawbacks to consider:
You need at least $10,000 in monthly sales to take out a loan with Merchant Growth. Home-based businesses do not qualify. Your business must have a physical location, including at least six months left on a lease. Furthermore, start-ups will not qualify for small business loans. Canada-based borrowers must have a business that is more than six months old.
2. Loans Canada
*Rates starting at 6.60% – Learn More!
With Loans Canada, you can compare lenders under one easy online application process. First, fill out some information about your business. Next, add in some personal information, and you can get started! When you use the Loans Canada comparison platform, you can pick the best small business loans for you. You can apply for up to $500,000 in financing with one single application.
Key features:
– Many loan types, from instalment loans to lines of credit and more!
– Quick online application process completed in minutes
– Up to $500,000 in financing on a single loan application
– Receive quotes from multiple lenders
– Canada Loans is a free service to use without incurring fees
Drawbacks to consider:
When using Loans Canada, you’ll only receive quotes from their affiliated providers. In other words, you can only choose lenders that partner with them. This company has no physical location. Therefore, you won’t receive any in-person customer service for your small business. Loans Canada does not provide online quotes. You must speak with lenders on the phone to be considered for loan offers.
3. OnDeck
*Rates starting at 8.00% – Learn More!
OnDeck offers a wide selection of different loan options. Also, these loan options all offer different terms and repayment schedules, so you can find small business loans that suit your needs best. Traditional business loans, lines of credit and merchant cash advances are just a few of OnDeck’s products. They are one of the fastest lenders, providing access to funds in 24 hours or less. Competitive rates are based on your credit score and your business revenue.
Key features:
– Fast distribution of funds, with approval and funds access in 24 hours
– Loan amounts up to $300,000
– No collateral required
– Simple online application process, completed in minutes
– Many loan options, with flexible and fixed repayment plans
– Merchant cash advances and lines of credit
Drawbacks to consider:
OnDeck requires their businesses to bring in a minimum of $100,000 monthly. Many clients are expected to earn more. Plus, there are credit score requirements which start at 600. This credit score stands even if your business earns significant revenue. OnDeck does not offer small business loans to start-ups. To apply for their best small business loans, your company will need to have been in operation for at least six months.
4. Lending Loop
*Rates starting at 4.96% – Learn More!
Lending Loop is different than other best small business loans in Canada. This is because it’s a regulated peer-to-peer lending platform. This means that when you apply for a small business loan, you will receive offers from anonymous investors interested in financing your loan. As a result, the online application process is quick and easy. Once this is complete and you accept your loan offer, investors begin to fund your loan on Lending Loop’s marketplace. Your loan gets transferred to your bank account once it receives complete funding.
Key features:
– Funds from anonymous investors ready to finance your business
– Cash advances ranging from $1,000 to $500,000
– Smooth online application process completed in minutes
– Low-interest rates beginning at 4.96%
– Flexible repayment options
Drawbacks to consider:
Unlike other small business loans in Canada, Lending Loop does not list its fees and charges online. In addition, your business must earn at least $100,000 in revenue annually to apply. Also, if you’re looking for customer support, this company provides very limited assistance.
5. SharpShooter Funding
*Rates starting at 6.33% – Learn More!
Sharpshooter is an excellent option for young companies because it offers loans to applicants who have been in business for less than six months. Alternatively, Sharpshooter requires businesses to have been in operation for at least one hundred days before applying and puts its focus on your monthly income. Your business must earn at least $9,666 monthly to apply for one of their small business loans. Canada borrowers can choose from a selection of different loans with Sharpshooter. These include traditional business loans as well as merchant cash advances.
Key features:
– Loan approvals within 24 hours
– Funds deposited in less than 3 days
– No collateral required
– Flexible repayment plans with terms of up to two years
– Competitive interest rates starting at 6.33%
– Accepts a minimum credit score of 416
Drawbacks to consider:
Sharpshooter small business loans come with high administration fees. These fees are based on credit score and history, business type and annual earnings. Also, Sharpshooter’s interest rates on its longer terms are high. Your company must have been in business for at least twelve months to qualify for long-term business loans.
6. CIBC
*Rates N/A – Learn More!
CIBC offers small business loans to borrowers who can meet their criteria. For example, you must have experience in your business’s industry and be able to provide a detailed business plan. You’ll also need to show a high credit score and have personal collateral to connect to your loan. On top of this, you must also be able to show that your business continues to generate positive revenue and has for at least twelve months. As a result, it makes more sense for established companies to apply for a CIBC business loan; they may be the only businesses that qualify.
Key features:
– Loan amounts starting at $10,000
– Many borrowing options, including lines of credit
– Flexible options, secured and unsecured, as well as fixed or variable rates
– Amortization periods of up to 15 years
Drawbacks to consider:
With CIBC, you can’t apply for a business loan online. Instead, you must visit a branch to begin the application process for their best small business loans. Also, you can’t take out a loan for less than $10,000. Additionally, CIBC doesn’t list their interest rates online. This is another reason you’ll have to visit a CIBC branch to see what rate you qualify for.
7. Shopify
*Rates N/A – Learn More!
For businesses already using Shopify as their storefront and point of sale, Shopify’s Merchant Cash Advance loans could be a great option. Shopify doesn’t offer traditional business loans with inflexible terms. Alternatively, you repay your cash advance with a percentage of your daily sales. As a result, your repayments fluctuate as they depend on your sales for that day. This can be really helpful as your revenue fluctuates from month to month. If you need to keep your cash flow open for operational purposes, this repayment method will also help support your business.
Key features:
– Shopify offers cash advance amounts up to $2,000,000
– They don’t require a credit check. Instead, they review your business’s earnings and sales before offering funds
– No collateral required
– Pre-qualification for Shopify businesses with different options for merchant cash advances
– Repayment is based on a percentage of daily sales
– No set deadlines for when loans need to be paid in entirety
– Early repayment options for businesses that repay 25% of their cash advance
Drawbacks to consider:
While repayment plans that fluctuate with sales are great, Shopify’s merchant cash advances won’t help your business build a credit history. Plus, there is a daily remittance that Shopify automatically deducts from your sales until your cash advance, and fees are paid. Shopify also doesn’t list its range of fees. You will pay a charge for your cash advance, and this fee is added to the total amount your business will need to repay. Most importantly, these are only one of the best small business loans for Shopify users. This is because you must be a Shopify user to see your merchant cash advance offers and receive a cash advance.
8. Scotiabank
*Rates N/A – Learn More!
Scotiabank offers some of the best business loans to borrowers purchasing real estate or business equipment. This is because their loans are installment based. This means you can use a Scotiabank loan to purchase fixed assets. Also, you can use your loan to finance future purchases or assets you may buy within six months of your loan application date. Borrowers can also qualify for Scotiabank small business loan protection. This is a form of insurance that will protect your loan payments. In addition, something to note is that Scotiabank business loans can be backed by Scotiabank or the Canadian government. This will depend on what type of financing you require.
Key features:
– Unlike other big banks, you can apply for a Scotiabank loan online
– Repayment terms of up to 10 years
– Varied financing options, including lines of credit and overdraft protection
– Loan amounts of up to $1,000,000
– Custom loans with fixed and variable interest rates
Drawbacks to consider:
With Scotiabank, your loan is secured by the asset you purchase. As a result, you’ll be required to forfeit your asset if you can’t repay the loan. Scotiabank also doesn’t list interest rates online, so you must visit a branch to find out what your qualifying interest rate will be. In addition, you will not qualify for a loan if you have bad credit. That is unless you can find a guarantor to co-sign or secure your loan with a personal asset. Finally, Scotiabank’s business loans only apply to fixed assets. As a result, you can’t use a Scotiabank loan to supplement cash flow or consolidate business debts.
9. Canada Small Business Financing Program (CSBFP)
*Rates N/A – Learn More!
The Canada Small Business Financing Program (CSBFP) is known as one of the country’s best small business loans. This is because loans are backed by the Canadian government. So, you will never get funding you couldn’t qualify for on your own. Plus, CSBFP’s interest rates are highly competitive. You will be eligible if you are a small business or start-up operating for profit in Canada. You just need a gross annual revenue of $10 million or less. Loan funds can also be used for a variety of different purposes. For example, buying new equipment, paying for renovations for a leased property, buying or improving land and more!
Key features:
– Varied and fixed interest rates
– For a variable rate, the maximum is the lender’s prime + 3%
– No fixed rate; the maximum is the lender’s single-family residential mortgage rate plus 3%
– Loans come with a government-backed guarantee, with some of the best interest rates in Canada
– Funds used to purchase assets
– Loans of up to $1,000,000
Drawbacks to consider:
CSBFP loans can’t be used for day-to-day operations, such as buying inventory, payroll and other daily expenses. With a CSBFP loan, you will also be charged a registration fee of 2%. On top of this, the lender may also charge any fees they would usually charge for a conventional loan of the same amount.
10. HSBC
*Rates N/A – Learn More!
HSBC small business loans work with a fixed repayment schedule. Furthermore, you’ll need to choose between a fixed or variable interest rate on your loan. If you don’t have collateral or don’t want to put any down, you can take out an HSBC loan for up to $250,000. For larger loans, it’s possible to qualify for up to $1.25 million. This is only for loans that go towards purchasing owner-occupied commercial property. To qualify for an HSBC business loan, your business can’t generate more than $5 million annually.
Key features:
– Easy online application process
– Swift qualification decision
– Fixed as well as variable interest rates
– Provides funds of up to $250,000 with no collateral
– Funds of up to $1.25 million on loans for owner-occupied commercial property
Drawbacks to consider:
With HSBC, you’ll have set-up fees equal to a maximum of 1% of the small business loan. Canada borrowers will also need to have an HSBC chequing account to qualify.
The Best Small Business Loans in Canada
Running a business in this economy (or perhaps any) comes with its own set of challenges. However, when you need a small business loan, having access to information on lenders and competitive interest rates makes it easier to find your best options.
RenovationFind is here to save you time with our curated list of comparable small business lenders. When you go through the options we provide above, it allows you to make comparisons between lending outlets. This way, you will feel more confident about your choices. Below we explain a little more about various types of small business loans in Canada work.
The most common small business lenders in Canada
First, a business with less than 100 employees is considered a small business in Canada. Small businesses make up the vast majority of Canada’s economy, and many entrepreneurs are seeking funding for their businesses. For the most part, small business lenders can be broken down into four categories:
Banks
Banks are perhaps the most well-known lenders for small business loans. This makes sense, considering banks also offer mortgages. If you have a history of borrowing, seeking funds from a bank is a likely choice. However, it can be challenging to get a bank loan. Banks require outstanding credit and often require personal assets as collateral. With bank loans, in most cases, you also can’t apply online, and the application process is lengthy.
Online direct lenders
Since banks come with much stricter lending eligibility, more and more small businesses are turning to online direct lenders. They offer some of the best small business loans in Canada. Moreover, their application process is easy and quick, and they don’t all require high credit scores and collateral.
Online Lending Marketplaces
A lending marketplace is an online marketplace engine that matches you with lenders. With this method, you fill out an online application form. Then you’ll see a variety of loan options from different lenders. This will help you narrow your search to find the best choice for your business. However, a downside with this type of lender is that you only have access to lenders who partner with the online marketplace you’re using.
Peer-to-peer lending
While a lending marketplace connects you with online lenders, peer-to-peer lending matches you with online investors. When you apply for peer-to-peer lending, your loan funds will come from investors using the online lending platform. So if you are concerned, you won’t qualify for a traditional online or bank small business loan, a peer-to-peer lender may be one of the best small business loans for you.
Find the best small business loan for your business
It’s no question that researching and deciding on the best business loan for your company can be a challenging task. There’s a lot to consider. You’ll also need to understand what type of interest rate and repayment plan will work for your business model.
Before you apply, you’ll want to be well-versed in the various types of interest rates and lending models. For example, fixed and variable interest rates, as well as traditional business loans, merchant cash advances and lines of credit, just to name a few.
The RenovationFind list above will help you get a handle on some of this. If you have more questions, don’t hesitate to contact a trusted source, such as a business advisor. This way, you can learn the intricacies of small business loans. Canada banks and some online direct lenders employ business advisors who can help you.
