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With so many challenges in traditional employment settings today, an increasing number of people are choosing to go their own way and start a business. And, regardless of how long you've been in business - a brand-new entrepreneur or an established owner of a family company that's been passed down for generations - you'll probably need a loan at some stage of your growth. You may need to cover an unanticipated gap between your profits and expenses in order to make payroll, or you might need a little extra to meet a welcome surge in customer demand.
Where should you turn when you need a business loan? Your first thought might be to use the financial institution where you already have accounts, either personal or business. That may be your most convenient option but not the best one. Why? Your local bank has little incentive to offer you the lowest rates. Also, if it's a smaller bank, it may not have the resources to approve a larger loan if you're really going for something big.
Monday, October 25th
Thinking Capital emerged as an early leader in the Canadian fintech industry and has provided funds to more than 16,000 small- and medium-sized businesses since its start in 2006. The lender offers both fixed and flexible funding types, with repayment options including daily, weekly, and bi-weekly terms.
Easy to qualify for a loan
A big reason to consider Thinking Capital for your business loan is their easy-to-meet requirements to be eligible for funding: just 6 months or more in business and an average credit/debit card sales amount of at least $7000. (Yes, that does mean that if your business doesn't accept credit and debit cards, you wouldn't qualify - but in this day and age, who doesn't take credit cards?)
Funds available as soon as 48 hours
To apply for a business loan with Thinking Capital, you'll need to complete the online application - expect that to take you about 10 minutes. Start by creating an account on the site and clicking the verification link in the email you receive. Once you've confirmed your account, you'll provide basic information about your business, your contact information, and your financing needs. Be prepared to upload a copy of your government-issued photo ID and a void cheque from your business bank account. Depending on the amount of financing you're requesting, Thinking Capital may require additional documentation. After your application is received, expect an email confirmation or a phone call from a representative within 24 hours. Once your application is approved, your funds may be available within 48 hours.
No rating from the Better Business Bureau?
Our only hesitation with Thinking Capital is their lack of a rating from the Better Business Bureau. That doesn't necessarily mean anything bad - and it's definitely better than some lenders who have a bad rating or numerous customer complaints! - but in an industry as sensitive as finance, it's always more reassuring to see a solid track record with the BBB too. We couldn't find anything on record there for Thinking Capital or its parent company, Purpose Financial.
Ample praise from clients
But, when you're talking about a lending service that has partnerships with some of the biggest names in finance - CIBC, National Bank of Canada, and Equifax, just to name a few - and that has been featured in The Globe and Mail, Betakit, and The Financial Post, it's easy to see that there are zero issues with reliability or trustworthiness when it comes to Thinking Capital. Out of more than 750 client reviews, this lender earned a 4- or 5-star rating from 93% of them. Clients describe the process of applying for a business loan and making the repayments as "easy" , "efficient" , and "straightforward" . Thinking Capital's customer service team also gets plenty of praise for being friendly, knowledgeable and professional.
Best choice for business loans in Canada
For all of these reasons, Thinking Capital earns our strongest recommendation for business owners in Canada who are looking for a loan. This service offers funding to many companies that wouldn't qualify to borrow money from some of the other lenders in the industry, and they make the entire experience hassle-free and easy to understand. Thinking Capital should be the first resource you turn to when looking for a business loan in Canada.
Merchant Growth is on a mission to deliver the most accessible, convenient financing to business owners throughout Canada. With solutions that include funding for e-commerce companies, flexible and fixed financing options, and lines of credit, you're sure to find an option here that works for your business needs.
Loan funds may be deposited within 24 hours
In order to qualify for any of Merchant Growth's small business products, you'll need to have at least $10,000 in monthly revenue and at least 6 months in business. Assuming you're applying for a fixed financing business loan, this lender can offer funding ranging from $5000 to $500,000 - and your funds could be deposited as fast as 24 hours after your application is completed and accepted!
Straightforward application process
The application process should only take about five minutes to complete. And, there are no surprises: enter your name and contact information, business industry, annual revenue range, home and business address, and amount of funding requested. You'll also be asked to give Merchant Growth access to your business bank account to process your application (which we don't love) - but you can proceed without connecting, especially if your business' financial institution isn't listed (which we do like). The upside of authenticating your business account is that you'll get an instant loan quote; otherwise, you'll be contacted by a Merchant Growth representative within two business hours and he or she will tell you how to submit paper bank statements instead. To finalize your application, expect to provide copies of a government-issued photo ID, a void cheque, and 6 months of recent business bank statements.
Strong positive reputation
How about Merchant Growth's reputation? No worries there: 98% of reviews left by clients give them a 4- or 5-star rating, which is impressive. We're always happy to see comments left by repeat customers, and Merchant Growth has that too: one business owner said that both times their company used this lender for their funding, everything went smoothly, all documents were easily signed online, and the money was in their account quickly. No complaints against Merchant Growth were filed with the BBB in the last three years, and very few services can make that claim!
Higher interest rates than other lenders?
The one downside a few reviews mentioned is that Merchant Growth may have higher interest rates on their business loans, when compared with some rival lenders. It might be worth getting a quote from at least one other financial institution before signing on the dotted line with Merchant Growth, just to be sure that you get the best rates and terms for your business.
A source of business loans you can trust
Merchant Growth has very few requirements to qualify for a business loan, a fantastic reputation for customer service and quick funding, and overall seems to genuinely want to help business owners succeed. While you should double-check interest rates with a few other lenders, you can rest assured that in most aspects Merchant Growth is a solid, trustworthy option for business loans in Canada.
OnDeck got its start in 2007 with the goal of supporting and empowering small businesses. Throughout Canada, the US and Australia, this lender has helped more than 100,000 companies to access funding totaling over US$12 billion. Operating in Canada since 2015, OnDeck partners with Evolocity Financial Group to offer business loans throughout all provinces and territories across 700 different industries.
Three pre-qualification questions
When you click the "apply now" button, you'll answer three questions: to determine if you meet OnDeck's minimum requirements of at least 6 months in business and annual sales of $100,000 or more, as well as which type of financial product you're considering (i.e. fixed term loan, flex funds, line of credit, or "not sure" ). If you meet OnDeck's criteria, the next page will tell you that you've been pre-qualified. From there, the real application process begins. You'll enter your name, business name and contact information, then specifics like your average monthly card and cash sales, months of ownership, and number of business locations.
Can get loan quotes without verifying business info
What we love about using OnDeck is that business owners don't have to verify their credit score in order to receive preliminary loan quotes: while the more accurate and thorough your application is, the more likely you'll get a quote that fits your needs, it's still possible to get a ballpark without using your social insurance number. And, even those estimates are customizable: click on the details button and you can enter a more specific loan amount and term, choose daily or weekly repayment frequency, and see exactly how much your payments will be.
Interest rates: not the best, not the worst
OnDeck doesn't publish their interest rates on business loans, so you'll want to run that calculation when you see your total repayment amount. For example, on a 10-month term loan of $10,000 with daily repayments of $57, we had a total repayment of $11,803.68. That works out to be just over 18% in interest and fees. That's not fantastic, but it's not the highest interest rate out there either.
Same day funding possible
To finish your application and accept your funding, you'll have to choose the payment processor or sales platform that processes the majority of your sales transactions and verify your business bank account OR upload 12 consecutive months of bank statements in PDF format. You also have the option of selecting "I am unable to submit my bank statement at this time" ; in that case, a representative will contact you to follow up, but you can still proceed with the application. Once your application is complete and has been accepted, OnDeck will deposit the funds to your business account - possibly as quickly as that same day! That's one of the fastest funding times among all providers of business loans in Canada.
Excellent reputation, especially in Canada
OnDeck has a very positive reputation. The Better Business Bureau gives the company an "A+" rating and accreditation; although there were more than two dozen complaints filed with the BBB in the three years prior to this review, they were all resolved in a professional and timely manner. And, out of 75 customer reviews specifically regarding OnDeck's operations in Canada, all of them gave the lender a 4- or 5-star rating. Business owners describe their experience as being fast, honest, and straightforward: no unpleasant surprises or delays.
Stricter eligibility requirements than many lenders
The only reason OnDeck doesn't earn our first-place ranking is because their minimum requirements are a little higher than most. Not only do you have to be in business for at least 6 months (which is typical) and have gross annual revenue of at least $100K (also fairly common), but you also have to have a personal Beacon score of at least 600. OnDeck states that their "typical customer" actually has a Beacon score of 640-720, with annual revenues of $500K to $1MM, leaving us wondering if interest rates are considerably higher for clients on the lower end of their qualification requirements.
Good choice for business loans if you qualify
In all other aspects, OnDeck gets high marks for quick funding, an easy online application process, and for providing excellent customer service. If you can meet their minimum requirements, this lender is a great option for a business loan in Canada.
Lending Loop is the first regulated peer-to-peer lending platform in Canada that focuses on small businesses. With more than 11,000 active lenders in the network, this service has facilitated loans totaling more than $70 million since 2014.
Transparent rates - but what about fees?
We appreciate that Lending Loop is transparent with the interest rates associated with their business loans: just click on the "Rates" section of the page to see what you can expect. They clearly state what their borrowers' annual loan costs are. However, they don't explain if those annual costs include any other fees mentioned on their site, such as origination or servicing fees.
Standard application process and eligibility requirements
Applying for a business loan from this lender is, in many ways, the same as anywhere else: provide the information about your business, allow Lending Loop to verify your financials, get a loan offer and decide whether or not to accept it. You'll need to have been in business for at least a year - a little stricter than some lenders' requirements - have at least $100K in annual revenue, and have a personal credit score of at least 640.
Funding can take up to 30 days
But, because Lending Loop is a peer-to-peer platform, the rest of the process is quite different. It can take up to two business days for their team to review your application and (hopefully) approve it. From there, your business loan request will be listed on Lending Loop's investor marketplace, and you'll have to wait for lenders to choose to fund your loan. You could be funded as quickly as 24 hours - or you may be waiting for the full 30-day period that your loan is listed. And yes, that also means that your loan could go unfunded if not enough lenders choose it within that 30-day period. In other words, Lending Loop is not ideal if you need a business loan in a hurry!
Lowest Cost Guarantee could save you money
On the other hand, you'll have a hard time finding a loan in Canada with interest rates that beat Lending Loop. There's no guarantee that you'll be eligible for those lower rates, but if you've got some time before you need the loan proceeds, you could save a significant amount of money in the long run. Plus, Lending Loop also offers a Lowest Cost Guarantee: if you use their service to get a business loan and receive a lower-rate offer within a month of receiving your funds, you can get a full refund of Lending Loop's origination fees. Just be sure to read the fine print for this guarantee to make sure you meet the eligibility requirements.
Limited feedback from business owners
How about reputation? Lending Loop doesn't have as much feedback as some of the other Canadian lenders in our review: the Better Business Bureau gives this platform an "A+" , and there was only one complaint filed there in the three years leading up to this review. Beyond that, there isn't much to be found with respect to the borrower experience here: most of the comments we found were from the perspective of investors/lenders and not from business owners.
More affordable business loans - if you can wait
At the end of the day, Lending Loop could be a way to get a business loan with lower-than-average interest rates - if you have the time to wait for it to be funded by Canadian investors. You will probably have a decent experience when using Lending Loop (as long as you're not in a hurry) because their reputation as a lender is solid.
More than one million Canadians have used Loans Canada to find loans to buy a car, consolidate debts, or expand their businesses. This service is a lending referral platform, connecting you with some of the top lenders nationwide. Loan Canada's business lending network includes big banks like BMO and RBC plus smaller financial institutions such as Sharpshooter Funding and BFS Capital.
Helpful information for first-time borrowers
To get started, click on the button for Business Loans. If you're just beginning the research process, you might find it helpful to follow the link under "View Guide" : you'll find plenty of information about the various types of credit available to businesses, what fees to expect during the loan process, recommendations for how to use your business loan, and a helpful glossary of terms that you might encounter. Otherwise, select the "Apply Now" button and choose Business Services as the type of financing you're seeking.
Many different types of business loans
On the Business Services page, you'll find a dozen options to choose from, including Equipment Financing, Commercial Vehicles, and Business Loans. Assuming you're going for a traditional Business Loan, here's what you can expect from the application process through Loans Canada. First, you'll need to enter your desired loan amount. The bigger the loan, the fewer partners you'll be matched with in Loan Canada's network, but many of their lenders approve business loans of up to $100,000. Next, you'll enter your postal code and the start date of your business, to determine if they have programs in your area. Once that's confirmed, you'll be asked for more details about your business, such as your industry, gross sales, and your contact information.
Confusing application process
The final page in the process is, frankly, cluttered and confusing to read through. If your experience is like ours, you'll be told to have your credit score and report ready, provided with a link to get a copy from TransUnion (with a corresponding fee there), and then asked to enter the total unsecured debt amount from your credit report to complete the application. You may also be shown which of Loan Canada's partners you were matched with - but our list only had one lender, along with two unrelated services (a secured business credit card and a credit verification platform). Finally, we got a long list of affiliate offers for everything from fraud and identity protection to financial education programs. That felt more like spam and less like help! Plus, there was nothing indicating what size or type of business loan we had qualified for: we either had to reach out to the lending partner with which we had been matched or wait for them to contact us. This puts Loans Canada below many of their competitors.
Lender's reputation has been used fraudulently
Consumers should be aware that the Loans Canada brand has been used by scammers to fraudulently access Canadians' bank accounts. Loans Canada is completely legitimate, with an "A+" rating and accreditation from the Better Business Bureau, but you should reach out to the lender directly to get a business loan rather than responding to any (unsolicited) invitations you may receive to apply.
Good for comparing lenders, but not hassle-free
So, what's the bottom line when using Loans Canada to get a business loan? It can be a great way to "shop" among multiple lenders at once. In fact, almost all of the lenders in our review are included in Loan Canada's network. That's a positive and might save you some time compared with submitting an inquiry with every single lender in the marketplace. On the other hand, you won't actually get any loan quotes or offers through this service: you'll still have to complete an application with the third-party lender (and you might have to reach out to them separately anyway). Loans Canada is a trustworthy referral platform for getting a business loan, but it's not as streamlined as our higher-rated options.
The good news is that business owners in Canada have a number of options to choose from when looking for a loan. Not only can you turn to your neighborhood bank, but you should also consider some of the most popular, trustworthy lenders who make it easy for you to apply online (and maybe even receive your loan proceeds within a business day or two!). Compare any offers you receive, both locally and from web-based lenders, to see which loan gives you the best rates and terms.
How can you tell which lender is right for your business? Here are several criteria to keep in mind:
TopConsumerReviews.com has reviewed and ranked the best Canadian Business Loan providers available today. We hope this information helps you get the funding you need for your company to grow and thrive!
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