Business Loans in Prince Edward Island

PEI Small Business Loans FAQs

How do I get a business loan in PEI?

Getting a business loan in Prince Edward Island starts with understanding your business’s needs and circumstances. PEI business loans are available for lots of different uses, from financing a startup business to expanding an existing business. The type of loan you apply for will be dictated by your business type and the financial circumstances of the business owners. To get a business loan, you’ll need to be in business for at least 12 months and have monthly revenue of $10,000. Your options for loans include government-sponsored entrepreneur loan programs, banks, credit unions, online loan providers and traditional private lenders.

Do I qualify for a business loan in PEI?

To qualify for a small business loan for your business in PEI, you must meet all of your chosen lender’s eligibility criteria. Traditional and online lenders have fairly standard requirements: a reasonable credit score, a clean financial history, and financial data for the business. However, PEI-specific lending programs have slightly different requirements for business loan eligibility, as well as restrictions on loan use. Under the Small Business Assistance program, borrowers may take out long term loans, under better terms and with fewer financial requirements than with a private lender, but the loan can only be used for acquisition or consolidation purposes.

How do I apply for a business loan in PEI?

Applying for a business loan in PEI is not as tough as you might think; there are a wealth of business funding sources to choose from. As a starting point, business owners need to choose the right lender. Different lenders have different terms, as well as different borrowing requirements, so it’s important to find one that works for you. If applying online you will need to fill out and application form with personal information, and business registration information, as well as provide your financial statements for the last 6 months.

What business loan terms should I expect in PEI?

Prince Edward Island’s small business community is a thriving one, and local entrepreneurs are able to access traditional short term private loans, as well as intermediate and long term loans. Longer loan terms can be 2-7 years. Shorter Loan terms are 3 months to 12 months. Loan terms vary according to the amount borrowed.

Can I get a business loan if I have bad credit in PEI?

Obtaining a bad credit business loan in PEI is possible, as long as you use the right lender. Banks and credit unions will not approve bad credit customers. However, you might be eligible for Prince Edward Island’s business loan terms for private lenders and online lenders, who usually rely on the borrower providing collateral or paying a higher interest rate.

What are the right uses for a business loan?

A business loan can be used for many purposes, but the origin of the loan may dictate what you are and are not allowed to do with it. Private lenders tend to be less strict on loan use than government programs, so it’s always worth double checking your loan terms. Business loans most commonly finance the following business costs:

• Debt consolidation
• Business acquisition
• New construction
• New equipment purchase or equipment repair
• Buying or leasing property or land
• Buying inventory
• Buying or leasing commercial vehicles
• Business expenses

Prince Edward Island Business Loan Facts

Despite being Canada’s smallest province, PEI is home to a diverse range of businesses. Here are some quick facts:

• There are around 10,000 small businesses on PEI.
• Small and medium sized businesses employ a massive 92% of the island’s private sector workforce.
• Over the past 10 years, small businesses across Canada have borrowed over $9.5 billion and taken out over 63,000 loans.
• Median income for households in PEI is $78,900 per year.
• The average household has $22,131 in consumer debt.
• PEI’s debt-to-income ratio is 107%, one of the lowest levels in the country.