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Best Small Business Loans
in Canada

A guide to the Best Canadian Small Business Loans

If you’re looking to start and run a business in Canada, you’ll need money & funding provided by a Small Business Funder. But oftentimes, small business owners do not necessarily have the funding & Business Loan approvals readily available to pour into their business ventures.

That’s where Small Business Loans provided by SharpShooter Funding® come into the picture. By getting access to funds from a funder or lender in Canada, small business owners can get their businesses starting from the ground up, or can expand their current businesses to experience true growth & potential.

Read on to find out all you need to know about Small Business Loans in Canada.

Small business loan benefits and challenges

Deciding how to finance your small business through a loan can be a challenging task for many entrepreneurs. There are many equity and debt funding options that can be used to get started, and all of them have pros and cons. 

Consider the following list when deciding if a particular loan is right for you.

Small business loan benefits 

Retaining equity

Your goal should always be to maintain as much equity as possible in your company. After all, it’s your blood, sweat, and tears that will build it. A major perk of getting capital via a loan is you don’t have to give away part of your company ownership, as is required with equity financing.

Autonomy

Small business loans generally allow you to call the shots. Your lender will ask what you plan on doing with the money. However, they won’t always be concerned with the specific details of how the loan is being used.

Preferable terms

Small business loans tend to offer more preferable terms, like a lower interest rate and higher business credit limit. Other financing tools, such as credit cards, will often have high-interest rates and a lower credit limit, which can limit flexibility and long-term payoffs.

Small business loan challenges

Personal guarantee

If your company has a poor or limited financial history, a bank or government official may ask you to put a personal guarantee on your loan. This personal guarantee is collateral in the form of a car, real estate or other valuable assets you own. If you default on the loan, you may lose this asset.

Credit history

If your business credit history isn’t in good standing, it could limit your available loan options. For example, you may not be eligible for preferable terms of the loan of your choice.

Higher debt-to-equity ratio

Having a small business loan means you’ll have a higher amount of debt on your balance sheet, which will increase your debt-to-equity ratio. It’s a measure of your company’s financial leverage.

Economy impact

Getting a small business loan can be influenced by the state of the economy, which is something over which you don’t have any control. So, if the economy is in a credit crisis, and there is a reduction in the availability of loans and credit, banks may be very cautious in lending to a small business owner. There’s always a high risk associated with startups.

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How Do You Apply For a Small Business Loan in Canada?

In order to apply for a Small Business Loan in Canada, consider the following:

Look at your lender options. While you can always approach your bank or credit union for a Small Business Loan, there are many other lenders available in Canada. If you’re turned down by one lender, try with another. If your credit score is standing in the way of getting a loan, consider either waiting to apply and take steps to increase your score, or consider alternative business lenders.

Here’s how you can get a Small Business Loan with no credit check.

Come up with a business plan. You shouldn’t go into a meeting with a lender without a plan in place for why you need a Small Business Loan and what you’ll be spending the funds on. Having a solid business plan in place can increase your chances of getting approved. Without a plan, you probably won’t even know how much money you truly need or how quickly you can pay it back.

Business plans usually contain things such as a few years of past and anticipated financial statements for your business, a statement of collateral an assessment of the market that your business serves, and a statement of your experience in the industry. Lenders in Canada will typically want to know that you will be using the money for and how it will improve your chances of being successful.

Get your personal credit history in order. If your business is new or is less than three years old, the lender will look at your personal credit history & credit report. Take some time to get your personal credit history in order before applying for a Small Business Loan. If there are any errors on your credit report, have them investigated and fixed.

Find out your credit score. Your credit score plays an important role in whether or not you can secure a Small Business Loan in Canada, as well as what interest rate you would be offered if you were approved. A score of at least 660 is considered healthy enough to get approved.

Look and Click Here to find out how funders & lenders set their cost of working capital for Small Business Loans.

What Types of Industries Can Small Business Loans Help With?

There are countless industries in Canada that would be well served by Small Business Loans, including:

This list can literally go on and on. If you’re planning to start a business based on your passions or want to expand the business you currently run, a Small Business Loan may serve you well.

What Types of Business Loans & Financing Options are Available in Canada?

When it comes to business financing, there are several options for you to choose from depending on what you require the funds for and the industry that you serve. Consider the following options:

Interested in applying for any of these business financing options? If so, apply now

How to Use a Small Business Loan in Canada

There are several different uses for a Small Business Loan in Canada, including the following:

Marketing – With all the competition out there in Canada, you’ll likely need to advertise your business. Advertising can costs a lot of money, which you might not have readily available. A Small Business Loan can provide you with the funds needed to get the word out there about your company to help you experience real growth.

Upgrade equipment – Tools and equipment can become obsolete after a while, and in order to remain competitive, you may need to spend some money upgrading your equipment from time to time.

Hire new employees – Unless you’re a solo entrepreneur, odds are you’ll need to hire some help for your business, who not only need to be paid but also require payroll duties and tools to be managed.

Expanding the business – If you already have a successful business up and running, perhaps you have dreams of expanding and growing it. But in order to do that, you need money to spend on a bigger unit, hire more employees, buy more inventory, and so forth.

Move/upgrade locations – Whether you need a bigger space, are looking to change locations in Canada, or your current space is no longer working for you, money will be needed to make such a change.

Want to know more about Small Business Loans for equipment? Check this out for your business

Open a second location – If you’re looking to grow your business, perhaps opening up another location is on the agenda. Again, such an endeavor requires working capital and a Small Business Loan from a direct funder or lender.

Expand your online retail store – If you’re dabbling in e-commerce, you’ll need money to host a website and hire the pros to keep it up to date.

Click here if you need help with both Good and Bad Credit that can help your small business grow.

This list is by no means exhaustive. There are seemingly endless ways that a Small Business Loan in Canada can serve you well.

Frequently Asked Questions

CAN I GET A SMALL BUSINESS LOAN USING MY PERSONAL CREDIT SCORE?

Yes, if you’re a new business who hasn’t yet built a business credit score, you can still get a Small Business Loan using your personal credit score. In fact, many lenders in Canada use both your personal credit score and business credit score when determining your creditworthiness.

CAN I USE A SMALL BUSINESS LOAN TO CONSOLIDATE DEBTS?

In general, yes, you can use a Small Business Loan to consolidate debts. In fact, you can use your Small Business Loan for any business expense such as marketing, equipment, payroll and more. However, many lenders in Canada require you to disclose why you need the loan. Depending on your rationale, your lender will either approve or reject your application.

WHAT CREDIT SCORE DO I NEED TO GET A SMALL BUSINESS LOAN?

The credit score required for a Small Business Loan depends on the lender you apply with. While banks often require a high credit score, many alternative lenders have a lower threshold. However, in general, the higher your personal and business credit score the higher your chances of being approved for a Small Business Loan.

Have more questions on how to obtain and get your small business approved for a business loan? Check out our FAQ Page here.

Need Financial Help to Start or Grow Your Business in Canada?

If you’re looking to turn your passion or experience into a successful business or are looking to grow a company you’re already running, a Small Business Loan in Canada can come in handy. If you’ve assessed your finances and determined where you need the borrowed funds to be allocated, get in touch with SharpShooter Funding® to help you find the right Small Business Loan for you.

How to apply with SharpShooter Funding® in Canada?

Step 1: Tell Us About Your Business

Fill out our online application by quickly entering basic information about your business and financing needs. Some of the business information that we ask for includes your monthly revenue and how long your business has been operating. By evaluating your business, we’ll be able to review your company’s objectives, sustainability, and how your borrowed funds will be allocated.

While other financial institutions require more than a personal guarantee or increase interest rates simply based on credit history, SharpShooter Funding® evaluates every aspect of your business as part of the process. By having a clear picture of your business plan and aspirations, we can help you get the type of loan you need.

Step 2: Get Qualified and Approved 

After you complete an online application, one of our expert advisors will contact you to get you qualified and approved for a loan. They will ask you some additional questions to collect the information they need to qualify you. 

Some Canadian lenders will want to use your capital business assets as collateral or use a general lien. At SharpShooter Funding®, we know healthy businesses that might not have adequate collateral can still make payments on borrowed capital. 

Financial statements showing your business cash flow and your daily business transactions will support the financial condition of your business. By measuring your cash expenditures against your income, we can gain an understanding of how much cash you have available to service debt and make repayments.

Some financial institutions may also require the principal owners of the company to provide professional resumes. When you demonstrate past businesses or relationships with lenders, we can get a better idea of your leadership and lending reputation and the best type of loan for you.

Step 3: Receive your Funding

Once you’ve been approved for financing, you can expect to receive your funding in as little as 72 hours. Your funding will be deposited directly into your business bank account. You can use the funds right away to improve your cash flow, purchase additional inventory, make repairs and renovations, and more. 

Are you eligible?

  • Canadian-based business
  • In operation for at least 24 months and generating revenues
  • Good credit history
  • You’ve reached the age of maturity in the province or territory where you live

Testimonials

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Ashlie S.

Fast and easy

SharpShooter Funding® was amazingly easy to use and we were funded in less than 2 business days. Thank you.

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SharpShooter Funding® application process

Quick and relatively easy. This may be a start to a long & valuable partnership.

Roger H.

SharpShooter Funding® my business in 2 days!

So far it’s been great. I applied online and was contacted by SharpShooter Funding® immediately on a Saturday morning, quite impressive. I did not know what to expect, as my bank declined me and it took them 24 days to do so. But SharpShooter Funding®, not only worked on my file over the weekend, but was able to fund my business in 2 days. What a relief! I did not even know companies like SharpShooter even existed until I heard about them on the radio. Thank you SharpShooter Funding®. I will be sure to tell all of my clients about your funding process.

Quinn H.

Different types of Loans In Canada

Its best to explore all financing options, contact SharpShooter Funding®® to find out what funding your business qualifies for.

Our Canadian Funding Programs Include:

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