Top Small Business Loan in Canada
Small businesses are the backbone of Canada’s economy. With 98% small and 24% interested in starting or running a business, it can be challenging to find financing for your company – especially when there are 1 million Canadian enterprises less than 100 employees; but we’re here at Prime lending with resources like loans between $5k-$500m available now!
Looking for the best business loans in Canada? You’re not alone. Many players have stepped up to meet a growing need with competitive rates and terms, including online lenders that offer financing options just as stringent or stricter than those available from traditional banks! We’ve found these five companies- Pick your poison below:
1) Lending Club
4.) Under 1905 Finance Incorporated
5 ) Earnest Money Lenders.
Which one will work out best for you?”
Best Business Loan Search Platform
When you’re looking for a loan, it’s important to do your research. There are many websites out there that can help with this process and one is Loans Canada! They have great customer service as well so if they don’t offer the best option then contact them because their team will work hard on finding what suits YOU best instead of just selling something quick like some other companies might try too much
The online search platform Helping Canadians Find Loans was launched in 2012 to help people easily find loans and other financial products that meet their needs. With a full suite of lenders on the site, it’s quite easy for anyone looking for some assistance – making this service an extremely flexible way to get what you need!
Interest Rate: 5.49% – 25%
Eligibility: Varies depending on the lender you choose
Loan Terms: up to $300K for up to 60 months
Repayment Terms: Vary depending on the lender you choose
You’ll never need to spend hours searching for the best business loan again! Just visit this site and you can get your desired information in seconds. Simply select “Business Loans,” pick a province from below (or type it if needed), then choose between Commercial or Personal loans on their easy-to-use chart with all of these qualities displayed: size/term comparison; annual percentage rate offered as well as monthly payments required over time; user reviews mentioning anything negative including how fast they got approval which means less risk when applying; and finally the company’s contact info to get the ball rolling.
Best for New Businesses
SharpShooter is a relatively new lender on the Canadian market, having been established in 2015 and offering commercial loans with rates as low as 5.49
Interest Rate: 5.49% – 18.29%
Eligibility: Less than 6 months operational (100 days or more)
Loan Terms: up to $300,000 for up to 60 months
Repayment Terms: Flexible (daily, weekly, bi-weekly, or monthly)
Accreditation: Canadian Lenders Association
SharpShooter’s eligibility criteria are what set it apart from the competition. Most lenders demand that commercial borrowers have been in operation for at least 6 months
SharpShooter will offer small business loans to firms with less than a year of operations who have been making monthly deposits of at least $10,000, or who accept credit or debit card payments. Although longer-term loans usually come with stricter conditions and higher interest rates, if you require immediate cash, SharpShooter might be your best bet.
Best Peer-to-Peer Loans
Lending Loop is one of the most reliable peer-to-peer online marketplaces to lend money. It has been in operation since 2014, and it can be tough for small businesses because they don’t offer as much funding compared with other sites on this list (but there are still large amounts available).
Interest Rate: 5.6% – 29.9%
Eligibility: 1 year operational, $100K annual revenue, 600+ personal credit score
Loan Terms: up to $500,000 for up to 60 months
Repayment Terms: Flexible (no early payment fees)
Accreditation: Canadian Lenders Association & Better Business Bureau
Greedy is the world of digital lending. With no financial institution taking a cut, peer-to-peer loan interest rates can be quite favorable! Lending Loop will assign your business a grade based on what information you provide them and this plays into connecting with lenders that may suit needs best for each company (or person).
Lending Loop is a peer-to-peer lending platform that can help you get the best rates on your credit. For example, if an applicant gets A+ ratings through this service they could qualify for rates between 5.9 and 7%. The worse of their available scores means 24% APR up to 25%, but these are only offered in cases where it would otherwise not be possible because businesses lack strong standing or if there are easy access eligible requirements which Lending Loop meets 100%.
Best for Short-Term Loans
Company Capital is a well-established small business that has been serving Canadian businesses for over 20 years. The company’s goal? To keep the control in your hands by allowing you to choose between different repayment terms, which they call “pay as you can afford.” With only one form and application process – two pages together!
Interest Rate: 6.87% and up
Eligibility: 6 months operational, $5,000/months minimum income
Loan Terms: up to $100,000 for up to 18 months
Repayment Terms: Short (3-18 months)
Accreditation: Canadian Lenders Association
If you need quick cash and are willing to take the shorter term, then Company Capital is an excellent option. They offer loans up on 3 months or 18-month terms with rates that can be as low as 6%. The only downside might be their higher APR (Interest Rate). But it’s worth looking into if your business needs some extra funds ASAP!
Best for Established Businesses
Founded in 2006, OnDeck is a global small business lending behemoth that has been able to grow under difficult conditions with five U.S offices and one each for Australia and Canada (Toronto). It also offers great terms for loans up to USD 1 million at competitive rates- perfect if you’re looking into expanding your company or purchasing new equipment!
Interest Rate: 8% – 29%
Eligibility: 1 year operational, $100K/year annual revenue, 550+ personal credit score
Loan Terms: up to $300,000 for up to 18 months
Repayment Terms: Flexible (daily/weekly payments)
Accreditation: Canadian Lenders Association & an A+ rating from the Better Business Bureau
This online lender has been around for a long time and can provide businesses with competitive rates.
“While it may not boast competitive interest,” says the author, “many business owners will like this website’s longevity because they know there is no risk of being cheated or taken advantage of.” The trust factor in terms of financial institutions that are traditional compared to those on today’s market makes them more appealing; plus you have access 24/7 through your mobile device!
The eligibility requirements are higher, but if you’re established and looking for a loan that will be easy to apply with repayment terms. The input is more general than we would like because it doesn’t specifically mention “loans”.
How Can I Choose the Right Business Loan for Me?
There are several things to think about while selecting a business loan:
Interest rates. Obviously, you want to get the lowest interest rate feasible to minimize borrowing costs.
Fees. Find out what applications fees, prepayment penalties, late payments, or other administrative costs you’ll need to consider.
Loan term. If you need a long time to repay your loan, choose a repayment term of up to five years. Remember that the longer the term, the more interest you will pay.
Eligibility. Some lenders want to see a long history of strong sales, while others may be more flexible with their standards.
Repayment schedule. The precise amount is determined by your credit score, which can range from $500 per month to more than $1 million. Some institutions allow you to pick the pay-in period, which can range from daily payments to weekly, biweekly, or monthly installments.
Loan Size. Some lenders are preferable to others, depending on how much you want to borrow.
Lender Reputation. Several new lenders are appearing every month, so do your homework and ensure that the lender you’re working with is trustworthy. Corporate standards and values are verified and accredited by members of the Canadian Lenders Association.
Alternatives to Business Loans
Here are a few alternatives for financing if you don’t qualify for a business loan:
Family, Friends, or Equity Investors.
If you have a limited time to quit your job and start up a business, you may try to locate someone who will provide you money in exchange for a stake in the firm and its profits. This might be beneficial because you won’t have to pay back a loan; however, you do give up some control and future earnings.
A business credit card can be a smart alternative when only a small loan is required, and the debt may be paid back quickly. Otherwise, high-interest rates charged by credit cards will return to haunt you.
Websites like Kickstarter and GoFundMe are popular for businesses seeking online fundraising from their community, generally in exchange for stock or a reward.
If you have good credit, then a personal loan might be an option for funding your business. Personal loans often come with risks because they’re tied to our reputation in case things don’t go as planned and if any payments are missed on time-frame commitments that can affect both aspects of finances: professional life (i.e., job loss) AND personal lives too!
If this does happen it’s important not only to save up some cash but also consider how filing bankruptcy will impact other areas such as student loans or car leases since these were most likely funded through one lender who may now refuse future lines based solely upon past mistakes made without warning.
How to Apply for a Business Loan
Depending on the lender you choose, the requirements for applying for a business loan will differ somewhat. Here is a basic outline of the procedures you’ll need to complete.
Make sure it’s the right fit for you. Make sure you’re eligible (nothing worse than completing a whole application only to discover that you haven’t been in business long enough), do your homework, and so on.
Fill out an online application. All of the lenders on our list allow you to apply for a loan through their websites immediately. In some cases, you may be required to submit an application in person with a bank or credit union.
Provide all requested documents. Business bank statements, accountant-prepared financial statements, pay stubs or notifications of assessment, government identification, articles of incorporation, and/or avoided cheques are all examples of required documentation. A complete business plan may also be required by banks or credit unions.
Select your repayment terms. If you pick a term, you may be able to pay off the loan once a month, bimonthly, weekly, or daily.
Once the loan has been authorized, the money will be transferred to you by direct bank transfer, wire transfer, or EFT (depending on the lender), whichever is quickest.
When Should I Apply for a Business Loan?
There are a lot of reasons to seek a business loan. Some are more evident than others, but one thing is clear: you should apply for a loan only if you truly need one for your company.
To expand your business, you’ll need cash. Business loans can help you obtain the funds you need to grow your company. Here are a handful of typical reasons to apply for a business loan:
Starting a new company is often challenging.
Increase productivity or add new locations/operations
Purchases of equipment or inventory that are critical to running the business.
Hiring fresh and skilled individuals is a key aspect of growing your business.
Investing in a known business opportunity
You can pay back the loan by setting up new credit for your business in addition to paying it off.
However, making timely and regular payments is critical.
The following are some of the most common reasons why you should not apply for a business loan.:
You have yet to start your own business.
Your company is already in debt.
Purchases that have not been planned or considered ahead
You can use this loan to pay off any other debts.
So, What’s the Bottom Line?
Business loans are a fantastic funding choice for businesses that want to preserve ownership in their company while also borrowing inexpensively.
Before applying for a business loan, shop around to see what different lenders have to offer in terms of interest rates, loan size, term, repayment schedule, costs, and eligibility requirements. Also, keep an eye on the lender’s credentials before turning to them. Before you go to a lender, look into government programs that assist small and medium businesses.
If you’re looking for financing, several platforms can help. These websites aggregate loans from across the industry to make it easier for you to find one that is right for your business. If you qualify, your company maybe just a day or two away from receiving the cash it requires to develop and flourish.