Types of financing, top lenders, qualification requirements, and how to get approved
Access to capital is one of the most critical factors in small business growth. Whether you're launching a new venture, buying equipment, or managing cash flow gaps, there are more small business loan options available to Canadian entrepreneurs in 2025 than ever before — from government-backed programs to alternative online lenders. This guide covers them all.
A lump sum you repay over a fixed period with regular payments. Best for equipment purchases, renovations, or expansion. Terms typically range from 1 to 10 years. Interest rates vary from prime + 1% (at major banks) to 20%+ at alternative lenders, depending on your credit profile.
Revolving credit you can draw on and repay as needed — similar to a credit card but with higher limits and lower rates. Ideal for managing seasonal cash flow or covering short-term operating expenses. Interest is only charged on the amount drawn.
The Canada Small Business Financing Program (CSBFP) allows the federal government to share loan risk with lenders, making it easier for startups and small businesses to qualify. Available through most major banks and credit unions.
The Business Development Bank of Canada (BDC) is a Crown corporation that provides flexible business loans, often to businesses that don't qualify for traditional bank financing. See our BDC Loan Review for details.
An advance against future sales revenue, repaid automatically as a percentage of daily card transactions. Fast and easy to qualify for, but effective interest rates are very high (often 40–100%+ APR). Use only for short-term bridge financing.
Borrow against outstanding invoices to improve cash flow. A lender advances 70–90% of invoice value, then collects directly from your customers. Fees range from 1–5% of invoice value per month.
The CSBFP is one of the best loan options for qualifying Canadian small businesses. The government guarantees up to 85% of the loan, significantly reducing lender risk and making it far easier to get approved than with a conventional business loan.
| Feature | Details |
|---|---|
| Maximum loan amount | $1,150,000 total ($1M for equipment/leasehold; $150K for intangible assets/working capital) |
| Eligible uses | Real property, leasehold improvements, equipment, intangible assets, working capital (since 2022) |
| Interest rate | Variable: lender's prime + 3% | Fixed: lender's residential mortgage rate + 3% |
| Registration fee | 2% of loan amount (can be financed) |
| Term | Up to 15 years (real property), 10 years (equipment/other) |
| Eligible businesses | Canadian businesses with annual gross revenue under $10M |
| Lender | Loan Type | Amount | Best For |
|---|---|---|---|
| BDC | Term loans, working capital | $10K–$10M+ | Growth-stage businesses |
| RBC | CSBFP, term loans, LOC | Up to $1.15M (CSBFP) | Established businesses |
| TD | CSBFP, term loans | Up to $1.15M (CSBFP) | Full-service clients |
| Futurpreneur | Startup loans (under 40) | Up to $20,000 | Young entrepreneurs |
| Clearco | Revenue-based financing | $10K–$10M | E-commerce, SaaS |
| OnDeck Canada | Term loans, LOC | $5K–$300K | Fast approvals |
| Kabbage (via RBC) | Line of credit | Up to $150K | Online businesses |
Lenders evaluate several factors when reviewing a business loan application:
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