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How to Get a Small Business Loan in Canada

For many small business owners in Canada, applying for a small business loan is a necessary part of managing a successful business. Whether for the purpose of cash flow, growth, expansion or consolidating debt, there are a number of borrowing options available to you as a Canadian small business operator.

To start, carefully consider the various options based on your specific business needs.

Traditional bank loans were once the leading choice, the reality is that borrowing from one of Canada’s “big five” can be a long and tedious process. While a good option for some, these loans are not ideal for small business owners needing capital quickly.  Applying requires much preparation, including obtaining documents, providing financial statements, and of course in-person visits to your local branch. Banks are highly regulated and risk averse, meaning small businesses are often underserved within the current operating model.

A line of credit can also be difficult for a small business to obtain because it requires a good credit score, steady income, and proof of repayment. In cases where small businesses are starting out and looking to gain traction, it can be difficult to meet these requirements.

Whether seeking a line of credit or a small business loan from your bank, waiting for approval can be problematic if a business is operating according to a timeline or looking to get funds quickly.

To prepare for a traditional loan or line of credit application, the following is a list of documents you may be required to present to your bank

  • Income statements, for your business and personal earnings. E.g. a copy of T1 General and Notice of Assessment
  • Copy of Investments/Deposits statements
  • Copies of Business Registration/Registration of Incorporation documents Copy of MPAC and/or mortgage statements for real estate holdings in your personal (not business) name
  • Copy of current financial statements
  • If purchasing a business asset (i.e. vehicle, equipment, property), you may require a copy of a Bill of Sale/Purchase Agreement detailing price, serial number and description
  • For those in business less than 2 years you may need to present a business plan, (including a copy of Opening Balance Sheet and/or Cash Flow Projections)
  • A copy of bank account statements

Online small business loans are the best option for small business owners seeking a fast, simple and convenient loan. Seek out online lenders such as Lendified that specialize in lending to small business owners, tailoring their products and credit model specifically to the small business sector. Many online lenders offer same-day approval of your application, the option of applying online, and the option to access your funds as early as the next business day.

Applying for a Small Business Loan Online

The process of applying for a small business loan online couldn’t be any simpler. For instance here at Lendified, we use a proprietary algorithm to assess business and factor in characteristics such as reputation, hard work and potential. On our site, you simply use our small business loan calculator to adjust the amount you need and your preferred terms for repayment.

To prepare for applying for a small business loan online through Lendified, simply have your SIN number and Business Number ready – our identity verification process is quite streamlined and involves answering a few basic questions about yourself and your business.

Still not convinced? Read what our customers have to say about Lendified.

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About the Author: Lendified

Lendified is Canada's premier online lender for small businesses. The company was founded by former bank executives dedicated to provide businesses with fast, easy, and affordable financing. The Lendified team regularly produces blogs and guides to help small business owners succeed.