Business Loans Toronto

How do I get a business loan in Toronto?

There are several options to choose from when obtaining a business loan in Toronto.

One way to get a business loan in Toronto is by going to a bank. At the bank, you can apply for a traditional business loan, a line of credit, and even business credit cards with fair limits. Banks may offer some of the more competitive rates, but the application process may be slower due to rigid criteria for loan eligibility.

If you are not eligible for a bank loan due to your credit history or other reasons, an alternative lender might be your next best option. Even though their rates could be higher than those of the banks, alternative lenders are much faster at getting you approved; they also have less strict eligibility criteria and work with borrowers with imperfect credit. Similar to the banks, alternative lenders offer specialized loans for your business, including equipment loans, merchant cash advances, working capital loans and more.

Before taking on debt with a business lender, see if you can find other options to fund your operation. Federal loans and grants are available to business owners, but in Toronto you can also find a variety of provincial and municipal business funding options. It’s worth investing some time in proper research to determine all the options that are available to you.

Are there any grants and incentives for Toronto-based businesses?

Yes, government grants and incentives are available to Toronto-based businesses. Here are a few examples of such programs:

• You may qualify for Brownfield Remediation Tax Assistance (BRTA). The program encourages investment in properties that have been rendered vacant or unsafe due to contamination. Restoring and developing these properties can result in an increased assessment of value. To offset the restoration costs for the property owners, the City of Toronto will cancel all or a portion of the tax increase on the property’s increased value.
• Toronto’s Imagination, Manufacturing, Innovation and Technology (IMIT) business incentive can help reduce business costs and financing. The IMIT Program supports new construction and expansion in targeted areas across the city.

How to apply for a business loan in Toronto?

Whether you need a small business loan for a marketing campaign or for hiring new employees or for buying/upgrading equipment, applying for a business loan with most business loan providers in Toronto involves the following steps:

1. Select a lender (bank, alternative lender, government grant, etc.)
2. Submit a pre-approval application
3. Receive & review your business loan offer when you’re approved
4. Submit a full application
5. Receive the loan and repay the lender according to the terms agreed.

What are the eligibility criteria for a business loan in Toronto?

All lenders have specific requirements that must be met to get approved for a business loan. However, here are some common documents all lenders are going to want to see:

• A government ID
• Financial documents of your business (bank statements, invoices, etc.)
• Your personal credit score
• Proof of annual revenue of $75,000 or more

Some lenders only offer loans to businesses operating in specific industries such as real estate investors or brokerage firms. It helps to be aware of lenders working with companies in your industry before applying for a loan. Although not common, the following documents may also be required with some lenders and in some cases:

• A business plan
• Capital business assets: Lenders also want to secure business collateral to protect themselves. In the event that you have difficulty repaying the loan, some lenders ask for specific collateral or assets, while others accept a general lien on your business.
• Financial statements: Lenders want to know that your business is in good shape financially, and financial statements and cash flow projections show lenders your business growth and your likelihood of repaying the business loan. Lenders want to see a business that’s been operational for at least 12 months and has monthly sales of $5,000 or more
• Professional resume: Providing a resume to the lender shows that you have a good history of being successful in your prior business ventures.

How fast can I get a business loan in Toronto?

How fast you receive your business loan depends on the lender you choose.

Although government loans have the lowest interest rates, they tend to take the longest amount of time to be approved. You can expect a wait period of 2-3 months or more.

Receiving approval and a business loan from a bank takes less time than government loans. A loan from the bank can typically be approved and disbursed within 4-8 weeks. In some cases, banks can take longer to process your application and approve funds.

Alternative business lenders usually take the shortest amount of time to approve and provide your business loan. Most lenders will approve your application within a few days and send your funds within the next business day. Some lenders provide an even faster turnaround. Generally, alternative business lenders take anywhere from 1-5 business days to get your funds ready for you.

How big of a business loan can you get in Toronto?

Lenders offer business loans ranging from $3,000 to $500,000. Lenders determine the size of a business loan based on several factors including your income, credit, debts, and whether the loan is secured or unsecured against your business. If your credit score is high enough (good to excellent) you can get approved for a loan on better terms.

Can I get a business loan with bad credit in Toronto?

Yes, you can get a business loan in Toronto even if you have bad credit.

If you have bad credit applying with an alternative lender will likely be the best option for you. Alternative lenders work with a wide range of borrowers, including those with less than perfect credit score. Please review our wide list of alternative lenders that can work with your case and get a loan for your business fast and easy.