Where can you apply for small business loans?
The Canada Small Business Financing Program
If you’re a small business owner in Canada, one of the first places you can look into is The Canada Small Business Financing Program. This program offers funding for small businesses that meet certain requirements.
For example, companies that have a gross annual revenue of $10 million or less may be eligible for a small business loan. Under this program, small business owners can work with local financial institutions to get a loan of up to a million dollars, though restrictions may apply.
A loan through this program, however, does have limitations on what you can use the funding for. For example, loans can be used for purchasing land, buildings, and equipment; and buying vehicles and technology software. You can’t, however, use this loan for working capital, inventory, or research and development.
If this is a good fit, then there will be either a variable or fixed interest rate, depending on the financial institution. Eighty-five percent of the loan is backed by the Canadian government, and there are different rates and repayment options that you may be eligible for.
An Online Lender
What if you need funding for working capital? If this is the case, you’ll likely need to seek another type of small business loan. While going straight to the bank may be your first inclination, banks often have strict eligibility requirements, as well as limits as to what you can do with the funding. What if you need something with a little more flexibility?
If you need capital quickly for your business – without as many hoops to jump through – consider small business loans from online lenders.
At LendingArch, we provide small business loans that can offer the capital you need whether it’s for renovations, marketing, inventory, or expanding your business. The good news is you can compare various options in a matter of minutes and get funding straight into your bank account. Not only that, but there’s an easy application process and no collateral required upfront either. On top of that, LendingArch has flexible repayment terms that can meet your business needs.
So, if you’re looking for an alternative small business loan that’s more accessible to you, check out these options.
There are also smaller-scale microloans that you may be eligible for. For example, some microloans are offered to specific types of small businesses based in certain regions. Community Micro Lending, for instance, offers a startup loan of up to $5,000 and an expansion loan for up to $10,000.
On top of microloans, small business loans from banks and funding through online lenders like LendingArch, you may want to consider crowdfunding, borrowing from relatives and credit cards to get additional financing.
Of course, these other options may not be ideal. Credit cards, for instance, often have high interest rates, whereas borrowing money from friends and family can come with its own issues.
As a small business owner, it’s up to you to look at all the financing options available. From there, you can decide which small business loan is the best fit for your business goals.
What you need to apply for a small business loan
Now that you know where to look for small business loans, now it’s time to apply for one.
In order to prepare for your small business loan application, it’s important to note that each financial institution or lender may have different eligibility requirements. With this said, you can generally expect to provide lenders with the same basic information in order to qualify for a small business loan.
Here’s what you’ll typically need in order to be eligible for a small business bank loan:
- You operate a Canadian business
- You have good credit, with no serious issues
- You are the age of majority
- You are profitable and have proof of revenue
- Your gross revenue meets any minimum or maximum requirements
- Your business is not religious in nature or based on charity
- You plan on using the loan for specific purposes that are approved by the lender
To make the process easier, you can gather your basic information and paperwork prior to applying. It’s also a good idea to have your business plan ready, tax information handy, and information available on your revenue, current debt, and any other financials. Essentially, any lender will want to verify your personal information and check out your current financial situation to make sure you’re creditworthy and on the right path to pay back a small business loan.
As you prepare your paperwork, be aware that some lenders will want to know how long you’ve been in business.
Here’s a pro tip for applying…
Applying for a traditional small business loan through a bank may require a lot of paperwork with no promise of getting approved. You’ll generally have a better chance of immediate approval through an online lender.
At LendingArch, for example, small business loans are available through one easy online application. To apply, you can create a business profile, fill out your personal information, and then see which small business loan options are a best match for your needs. The loans offer competitive rates, flexible repayment terms and no upfront collateral. Plus, LendingArch doesn’t have any hidden fees or surprise costs.