Business Loans in Canada

Obtaining business loans Canada can be a frustrating process. The majority of financial institutions are leery of loaning out money for new businesses simply due to the gamble they know they're taking should they agree to finance a loan for a business that might go under. After all, most business fail in the first five years and large loans that can't be repaid mean money the banking institutions won't ever be able to recover.

However if you're an established business and can prove you're bringing in a decent yearly revenue, banks are more apt to grant you a loan as you're less of a risk.

The Canada Small Business Financing Program

Whether you are planning to launch a start-up business or already have an established one, the Canada Small Business Financing Program will allow you to take out up to $1,000,000. In order to qualify you have to be earning $10 million or less in revenue and can't be a farm, religious, or non-profit organization.

If you qualify, you can choose to use the money to purchase property, buy equipment, or improve leased or recently acquired property.

Any assets you or your business has will be used as collateral in order to obtain the loan. You will also be required to pay a registration fee that's 2% of the loan. The interest on your loan will be determined by whatever banking institution you choose to go with but generally speaking it should never be over 3% of your bank's prime lending rate.

Market Expansion Loan

Provided exclusively through the Business Development Bank of Canada, you can obtain a loan amount of $100,000 if your business meets all of the qualifications. Use the funds to expand your market locally or globally, invest your money into new technologies, start up a new marketing campaign, purchase new licenses, or even hire and train new employees. The choice is yours.

In order to qualify you won't need any personal assets and what makes this loan the best is that whatever you've already repaid on the loan, BDC can re-advance you right back in $10,000 installments.

Micro Loans

If you need money for a small business you may be eligible for a $15,000 micro loan from a local banking institution. Whether or not you qualify depends on certain factors such as credit, revenue accrued each year, etc. These loans were intended for small businesses that had or have trouble acquiring a traditional loan from a large banking institution. Western Economic Diversification Canada (WD) is one such lender that offers loans for businesses in certain areas of Canada. These areas include: Vancouver, Winnipeg, Victoria, Edmonton, Regina, and Saskatoon.

Community Loans

If you can't get a traditional business loan for your small business you might want to consider a community loan. These non-profit organizations can grant a loan between $2,000 to $150,000 for eligible small businesses.

Canadian Youth Business Foundation

If you are a young entrepreneur with a big dream and fall between the ages of 18 and 34, getting a small business loan is easy through the Canadian Youth Business Foundation. You can get a loan up to $15,000 and put it toward what you need to get your business off the ground. The Youth Strategy Program CED-CFDC in Quebec might issue a personal loan to qualifying individuals. Loans range between $5,000 - $15,000 and can be used on any expense to launch a start-up business or modify small business needs.

There are many options regarding business loans in Canada. If you need funding to get your business started or to make some serious changes within your existing business, these loan options are an excellent way to help you get what you need when you need it.
 

This project is made possible through funding from the Government of Canada and the Government of New Brunswick.

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