Small Business Loan Canada 2026

Compare Canadian small business loan options — CSBFP, BDC, bank term loans, and alternative lenders. Calculate your payments with our interactive business loan calculator.

💼 Separate Personal & Business Finances

KOHO is popular with Canadian freelancers and sole proprietors as a no-fee account for tracking business income. Keep your finances clean — open a free account today.

Get KOHO Free — Code 45ET55JSYA

Business Loan Payment Calculator

Loan Amount ($)

Annual Interest Rate (%)

Loan Term (years)

Small Business Loan Options in Canada

Program	Max Amount	Rate	Best For
Canada Small Business Financing Program (CSBFP)	$1.15M	Prime + up to 3%	Equipment, leasehold, intangibles
BDC Term Loan	$35M+	Varies (competitive)	Growth capital, startups
Big 5 Bank Term Loan	Negotiated	Prime + 1–4%	Established businesses
Credit Union Loan	Varies	Competitive local rates	Community businesses
Export Development Canada (EDC)	Unlimited	Negotiated	Export-focused businesses
OnDeck / Clearco	$300K	Higher (factor rates)	Fast cash, short-term

Canada Small Business Financing Program (CSBFP)

The CSBFP is a federal government loan guarantee program that makes it easier for small businesses to access bank financing. The government guarantees 85% of the loan — reducing bank risk and making approval more accessible:

Eligible uses: Equipment purchase, leasehold improvements, software/patents/trademarks/licenses (up to $150K for intangibles)
Maximum loan: $1.15 million (up to $1M for real property; $500K for equipment/leaseholds; $150K for intangibles)
Business eligibility: Canadian small businesses with revenues under $10 million
Registration fee: 2% of the loan amount (can be financed into the loan)
Annual administration fee: 1.25% on outstanding balance
Apply through: Any participating financial institution (all Big 5, most credit unions)

CSBFP tip: The program cannot be used for working capital or inventory. It's specifically for purchasing assets (equipment, vehicles, fixtures) and making permanent leasehold improvements to a business premises.

How to Apply for a Small Business Loan in Canada

Step 1 — Prepare financials: 2–3 years of business financial statements, personal and corporate tax returns, current accounts receivable/payable aging reports
Step 2 — Write a business plan: Lenders want to see projected revenue, expense assumptions, and repayment strategy
Step 3 — Gather business documents: Certificate of Incorporation, CRA Business Number, articles of incorporation
Step 4 — Approach lenders: Start with your existing business bank, then BDC, then alternative lenders
Step 5 — Negotiate terms: Rate, amortization, prepayment terms, and covenants are all negotiable

Frequently Asked Questions

What is the easiest small business loan to get in Canada?

The Canada Small Business Financing Program (CSBFP) has the highest approval rate because the government backs 85% of the loan. BDC is also known for working with businesses that traditional banks decline. Alternative lenders (OnDeck, Clearco) approve quickly but charge higher rates.

How much can a small business borrow in Canada?

Under the CSBFP, up to $1.15 million. BDC loans can exceed $35 million for growing companies. Big 5 bank term loans are negotiated based on business revenue, assets, and creditworthiness.

Can a startup get a business loan in Canada?

Startups under 1 year old struggle with traditional bank loans. Options include: BDC's startup financing, CSBFP (if purchasing equipment or making leasehold improvements), NRC IRAP for tech startups, and CDAP digital adoption grants.

Is business loan interest tax deductible in Canada?

Yes. Interest paid on money borrowed for business purposes is a deductible business expense in Canada. This reduces your effective cost of borrowing by your marginal tax rate.