Smarter Loans Inc. is not a lender. Smarter.loans is an independent comparison website that provides information on lending and financial companies in Canada. We work hard to give you the information you need to make smarter decisions about a financial company or product that you might be considering. We may receive compensation from companies that we work with for placement of their products or services on our site. While compensation arrangements may affect the order, position or placement of products & companies listed on our website, it does not influence our evaluation of those products. Please do not interpret the order in which products appear on Smarter Loans as an endorsement or recommendation from us. Our website does not feature every loan provider or financial product available in Canada. We try our best to bring you up-to-date, educational information to help you decide the best solution for your individual situation. The information and tools that we provide are free to you and should merely be used as guidance. You should always review the terms, fees, and conditions for any loan or financial product that you are considering.
Small business loans can be a great way to borrow money when you need to purchase equipment, fund a marketing campaign, or open a new location. At Smarter Loans, our panel of 50+ industry experts have reviewed and qualified Canada’s most trusted lenders. We make it easy to find the business financing you need quickly, with the best rates and flexible repayment terms.
Current interest rates for businesses range from about 7.99% to 10%. A good rate, however, is one you can comfortably afford when making your monthly repayments.
If you’ve been operating for at least 6-12 months—and have a minimum of $10,000 in monthly sales—Smarter Loans can connect you with the financial resources you need.
Pre-apply online (right corner), or check out our roster of reputable Canadian lenders below to find the best rate for you.
Let Smarter Loans connect you with the top business loan providers in Canada.
Financial support is a key to success for small businesses. That’s why business credit has grown in popularity in recent years.
Value of business credit disbursed in Canada from first half 2018 to first half 2022, by type of supplier (in billion Canadian dollars)
With a small business loan, you can borrow a fixed amount of money, invest it in your company’s growth, and pay it back by instalments over a period of time.
By saving your cash to run your business–instead of spending it on large expenses or lump sum payments–financing solutions can help you grow faster.
Get the working capital new businesses need to buy inventory, execute marketing plans, or finance an equipment purchase.
Grow your small business by borrowing money to hire staff, develop new products, or upgrade machinery, equipment or tools.
Improve cash flow management by financing small projects and covering emergency or short-term expenses like rent and payroll during seasonal downtimes.
When it’s time to renovate your premises, fund an acquisition, or purchase commercial property, Smarter Loans can help connect you with advances of up to $1,000,000+.
Here are just some of the financial solutions we can help you access when you connect with one of our partner lenders or pre-apply online:
With so many lenders in Canada, using Smarter Loans to compare and choose the right small business loan for your situation is a smart idea.
Here are some important factors to consider when comparing services:
The amount you can qualify for is largely determined by your income, credit, debts, and whether or not the funds you borrow are secured against your business.
Repayment terms dictate how much your monthly payments will be and how long they’ll continue until you’ve repaid your loan (plus interest) in full.
While interest rates determine the cost of borrowing, you can often get a lower rate by putting up a business asset (like real estate, for example) as collateral.
It’s important to find out if the financing you’re considering comes with any upfront or ongoing fees.
Since all businesses are different, loan sizes for entrepreneurs range from a few hundred dollars to $500,000 and more.
The key to taking the right amount is having a plan to use your financial advance to fuel revenue growth. This will help you comfortably pay back what you owe within the agreed terms.
Here’s a simple example:
Let’s say you want to borrow $5,000 at an interest rate of 10% over 2 years.
If the repayment frequency is monthly, your payment amount would be $230.72 per month.
Use the calculator below to get an estimate of what your monthly payment will look like when you apply to a lender through Smarter Loans.
Banks and other lenders consider a number of factors before approving a company for funding. Since each application counts towards your credit score (even if it’s declined), it’s good advice to know the qualification criteria before you apply.
In addition to your personal income and resume, here’s what entrepreneurs often need to show to get approved for financing:
For a secured loan, most lenders will request an asset appraisal to ensure your collateral is sufficient should you have trouble making your repayments in full.
Monthly revenue numbers and cash flow projections go a long way to showing lenders the health of your finances and your ability to repay what you owe.
A bank or financing company will usually look at both your personal and business credit approval scores as part of their application process.
Most lenders will want to see a detailed business plan outlining your objectives and how you intend to use any borrowed resources.
While there is no one magic number that enables businesses to receive the financial resources they need, a higher credit score works to the benefit of the borrower. As a general rule, higher credit rating (either the business, or the business owner) will increase the chances of getting approved for a business loan.
This depends on the type of loan being obtained. For unsecured (no collateral) loans, cash flow is very important, because that’s how the lender evaluates the business’s ability to repay the loan. Daily and monthly sales numbers, especially through debit and credit cards, are a critical factor for business loan approval. For secured loans, where business assets such as equipment or real estate is used, the cash flow may be slightly less important.
For businesses that have a track record of operations in Ontario and across Canada, the Small Business Administration (SBA) provides funding programs through SBA-approved lenders. While the lender (mainly banks and financial institutions) provides the capital, the SBA guarantees up to 85% of the loan amount, which helps the business owner obtain a lower interest rate.
Depending on each individual business profile, the owner can gain up to $5 MM of SBA-backed financing with loan terms from 5 up to 25 years. However, an emphasis is placed upon credit scores and established histories when evaluating businesses for qualification.
In a nutshell, yes. However, there are some nuances. When obtaining business financing, lenders generally require the borrower to explain the purposes and rationale for where the funds will be deployed. Therefore, it is important to notify the lender at the outset whether these funds would go for marketing, capital expenditures, technology purposes or debt refinancing.
While it is ultimately the owner’s discretion and/or company policy that determines how the capital structure is formed, best practices for debt management include being vigilant with it particularly in cases where the business is in trouble. For example, it is not advised to use a business loan to pay overdue bills and employee salaries when the business is not profitable. Business loans should be used to increase revenue and grow a business, so that the there is a positive return on investment after the funds are used up. A great example of this is purchasing inventory that is expected to sell during a busy season, or investing to open a patio for a restaurant, which will bring in extra revenue.
Small business loans are relatively easy to obtain as long as a business has been operational for at least a year and generates at least $10,000 in monthly revenue. To apply and receive funding, business owners need simply to complete an application (online or at specialist lenders) and provide access to their business’s registration details and financial statements, as well as credit profile. While size is not a direct consideration, lenders will want to look at a consistent history of revenue generation, so they can feel confident in a business’s ability to repay the loan.
No, the personal credit score in Canadian provinces and territories is a number between 300 and 900. While there is no equivalent score for a business in Canada, different credit bureaus have adapted a scoring system to rank creditworthiness by evaluating certain behaviours of businesses.
This depends on the type of loan being obtained. While most small business lending companies will want to see how the small business will deploy the funds, a well-formulated business plan may not be a requirement. In the case that it is necessary though, it is important to answer the following questions:
a) What the small business loan will be used for (additional funding “cushions”, expansion, equipment/technology purchases, working capital, funds for supplier/employee payments, capital expenditures, cash flow purposes etc.)
b) Expected business and economic conditions over the next 2-5 years
c) How they will impact profitability and financial strength
If you are currently exporting or considering exporting outside of Canada, you need to carefully consider your strategy. Thankfully, there are great resources available to you.
General Inquiries:
Smarter Loans has teamed up with Export Development Canada to help Canadian businesses navigate global opportunities. Their unique suite of solutions can help you offset the risks of doing business abroad, finance your deal and access the working capital you need.
Want to learn more about how EDC can help? Send your inquiry to an EDC Trade Advisor today
Credit Insurance:
To keep your financial situation secure, consider talking to an Export Development Canada (EDC) Trade Advisor. EDC has solutions that can protect you against the risk of not getting paid when doing business beyond our borders and help you get more cash to grow your exporting business.
Learn more about EDC’s Solutions Here.
When looking at different lenders for small business financing, it is important to consider a broad list of items before committing to one lending option. While it is tempting to take the offer with the best rate, a lender should be viewed through the lens of a business partner. In the same way that a great business partner can improve the company, a great lender can provide your business with the resources to take it to the next level. As such, the following should be considered, weighed, and decided upon:
a) Their policy frameworks (application processes, information requirements, and ALL fees)
b) Ancillary services they offer (e.g. transaction banking solutions)
c) Term of the loan (measured in years or months)
d) Variable or fixed rates (possibly adjusted to real rates to account for inflation)
e) Funding amount offered and how it matches with the capital that is needed.
Absolutely. If the business is registered and meets the other qualifications of the lender, the business can be located out of a residential living arrangement.
Private business loans in Canada include all loans made to businesses by non-bank lenders. Loans from online lenders, private lending businesses, family members or friends, venture capitalists, or brick-and-mortar financial businesses all count as private loans. Private loans are an option when a business prefers not to deal with a bank, or when a business fails to meet the bank’s strict lending criteria. There are many different types of private lenders, ranging in competitiveness and reputability, so it’s important to find one you trust.
Applying for small business loans online is extremely common, and thanks to streamlined and convenient online application systems, it takes very little time and effort. Most lenders now have an online application option.
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