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Types of small business loans in Canada
- Government-backed loans (CSBFP) — the Canada Small Business Financing Program shares risk with lenders, with loans up to $1.15M.
- Bank & credit union term loans — competitive rates for established businesses.
- Online business loans — fast approval and funding, ideal for working capital.
- Lines of credit — flexible, revolving access to funds.
- Equipment financing — the equipment itself serves as collateral.
- Merchant cash advances — repaid from future sales (higher cost).
The Canada Small Business Financing Program (CSBFP)
The CSBFP is one of the most popular options for new businesses. The government shares the lending risk, making banks more willing to approve. Key facts:
- Loans up to $1.15M, with rates around prime + 3%.
- Available to businesses with gross annual revenue of $10M or less.
- Startups receive the majority of program loans.
- You apply through any bank, credit union or caisse populaire.
Eligibility requirements
Most lenders will want to see:
- A solid business plan with financial projections
- Good personal credit (typically 650+)
- Proof of business revenue or realistic projections
- A business operating in Canada
How to apply
- Decide how much you need and what it’s for.
- Prepare your business plan and financial statements.
- Compare lenders — bank, online and government-backed.
- Submit your application with supporting documents.
- Review the offer, rate and repayment terms before signing.
Approval can take a few weeks for bank and CSBFP loans, or as little as 24–48 hours with some online lenders.
Tips to strengthen your application
Keep your business and personal finances separate, maintain clean bookkeeping, build your business credit, and apply for an amount your cash flow can comfortably support. Lenders fund businesses that show they can repay.
Frequently asked questions
Can a brand-new business get a loan? Yes — the CSBFP and many online lenders fund startups, often based on projections and personal credit.
How much can I borrow? From a few thousand dollars up to $1.15M under the CSBFP.
Do I need collateral? Some loans require it; others (like online working-capital loans) may not.
Ready to fund your business? Compare business loan offers →
Disclaimer: LoanWave.ca is an affiliate / comparison website. We are not a lender and do not provide loans. We may earn a commission from partners. Rates and terms are set by lenders. Informational content only, not financial advice.