Small Business Loans in Canada: Your Options Explained

The short answer

Canadian small businesses borrow from four broad places: the big banks and credit unions, the Business Development Bank of Canada (BDC), government-supported programs like the Canada Small Business Financing Program (CSBFP), and online or alternative funders. Each trades off cost, speed, and how established your business needs to be. This guide walks through all of them so you can match the option to your situation — and if you want the fundamentals of how business loans work in general, start with our main hub.

BluLoans is an education and comparison platform, not a lender; the goal here is to lay out the real landscape, downsides included.

Big banks and credit unions

RBC, TD, Scotiabank, BMO, CIBC, and National Bank all lend to small businesses, as do credit unions like Vancity, Meridian, and Desjardins-affiliated caisses. Bank term loans and lines of credit are usually the cheapest money available to an established Canadian business — and the hardest to get.

Expect banks to want:

• Two or more years in business, ideally with filed corporate tax returns
• Financial statements — a profit-and-loss and balance sheet, not just bank statements
• Strong personal credit from the owner, plus a personal guarantee
• Often collateral or a general security agreement over business assets

Credit unions underwrite similarly but are sometimes more flexible with local businesses and member relationships. The trade-off across both: applications take longer, documentation runs deeper, and newer or thin-credit businesses are frequently declined.

BDC — the Business Development Bank of Canada

BDC is a Crown corporation whose mandate is specifically Canadian entrepreneurs. It offers term loans, working capital financing, equipment and commercial real estate loans, and advisory services. Because of its mandate, BDC will sometimes finance businesses and projects a commercial bank considers too risky — including younger companies — though it still underwrites seriously and its pricing generally reflects the added risk rather than beating bank pricing.

BDC is worth a look when you have a credible plan and some traction but keep hearing "not yet" from your bank. Details on BDC and other public options are in our guide to government business loans in Canada.

The Canada Small Business Financing Program (CSBFP), briefly

The CSBFP is a federal program under which the government shares the lender's risk on loans made through ordinary banks and credit unions — you apply at a participating financial institution, not to the government. According to Innovation, Science and Economic Development Canada, the program supports financing for equipment, leasehold improvements, real property, and — following program changes — certain intangible assets and working capital, with combined maximums that can reach roughly $1.15 million for some purposes, though the sub-limits differ by asset class and should be confirmed before you plan around them {{VERIFY: current CSBFP maximums and eligible purposes, ised-isde.canada.ca CSBFP page}}.

The full mechanics — fees, rate caps, and what qualifies — are covered in our dedicated government business loans in Canada guide.

Online and alternative lenders

A growing set of online lenders and fintech funders serve Canadian businesses that banks turn away or that simply need money faster. Typical shape:

• Speed: decisions in days, sometimes hours, based largely on recent business bank statements
• Lighter documentation: bank statements and ID often carry the application
• Higher cost: convenience and looser criteria are priced in — always compare the total repayment amount, not just the headline figure
• Shorter terms: repayment often runs months to a few years rather than five to ten

This category is legitimate and useful, but read agreements carefully: fee structures vary widely, and some products quote costs in ways that are hard to compare against an annual interest rate.

Revenue-based funding (not a loan)

Some funders advance capital against your future sales and collect a fixed percentage of revenue or card receipts until a set amount is repaid. This is a purchase of future receivables, not a loan — there is no interest rate in the conventional sense, and the effective cost can be high if you repay quickly. It suits businesses with strong, steady deposits that need working capital fast and can absorb the cost; it suits nobody as a long-term financing strategy.

What Canadian lenders actually look for

Across nearly every category, three things drive decisions:

1. Time in business. Six to twelve months is a common floor for online funders; banks prefer two years or more. Brand-new? See startup business loans in Canada.
2. Monthly deposits. Underwriters count money that actually lands in your business bank account, in CAD. Many online programs look for consistent five-figure monthly deposits — commonly somewhere around $10,000–$15,000 per month as a working floor, though every provider sets its own threshold.
3. Credit. Personal credit matters for almost all small business borrowing in Canada because personal guarantees are standard; business credit (via Equifax and TransUnion business files) matters more as you scale.

What to do next

Match the option to your profile: established and patient, start with your bank or credit union and ask about the CSBFP; growing with steady deposits but short on time or paperwork, compare online offers carefully; early-stage, read the startup guide above before applying anywhere. If your business has steady monthly deposits and you want to see what you may qualify for, you can check your options — BluLoans' funding partner serves businesses across Canada, in all provinces, as well as the US.