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What lenders check first
Business lenders lead on the business. Monthly revenue is the first filter, time in business is the second, and whether cash flow covers the payment is the third. Most online lenders on the business loans market want roughly $10,000 a month in deposits and six months of trading, and they verify both from bank statements rather than from anything you tell them. If those three hold, weak personal credit narrows your options and raises your price. It does not close the door.
That order is not a courtesy. A business with steady deposits can service a payment whatever its owner's file says, and lenders who price on revenue have built their models around exactly that.
Where credit actually enters
Personal credit enters through the guarantee. Most small-business lending in Canada asks the owner to guarantee the debt personally, and where that applies the lender pulls your file. What it moves is the price and the size, not usually the yes or no. Larger secured facilities are likelier to stand on the business alone; small fast money is likelier to lean on you.
Ask two questions before signing: is a personal guarantee required, and what rate would the same application get without one. The answers tell you what your credit is actually costing.
The products that weight revenue most
- Revenue-based advances. Repaid as a share of daily or weekly sales, priced as a factor rate rather than interest. The likeliest approval on a weak file and the dearest money in the market.
- Invoice factoring. Your customers' credit carries the decision, not yours. If you invoice solid businesses on terms, this is often the cheapest route open to a weak file.
- Equipment financing. The machine secures the loan, so the credit question shrinks. Available earlier in a business's life than almost anything else.
- Short-term online term loans. Fixed payments, decided in days, priced well above bank rates and below advance pricing.
What it costs
$50,000 over 18 months: advance against term loan
| Route | You get | When | Total cost |
| Revenue-based advance, 1.28 factor | $50,000 | Repaid daily or weekly from sales | $14,016.99 interest ($3,556.50 a month for 18 months) |
| Unsecured term loan | $50,000 | Fixed monthly payment | $12,698.57 interest ($3,483.25 a month for 18 months) |
The advance is quoted as a 1.28 factor rate, so $50,000 repays $64,000: a $14,000 cost that works out to roughly 32.9 percent APR over 18 months. Factor rates are not interest rates, and converting them is the only way to compare.
Revenue-based products approve on cash flow and price accordingly, so use them when approval is genuinely the constraint and refinance to a term loan once the file supports one.
Illustrative example, not quoted offers: $50,000 over 18 months, an advance at a 1.28 factor rate against a term loan at 29.99% APR. Your pricing depends on revenue, time in business and the lender.
That pricing sits inside a legal ceiling, and the ceiling is not the one most borrowers assume.
If you borrow as a sole proprietor you are a natural person in law, and the 35 percent criminal interest rate cap protects you the same way it protects any personal borrower. If you borrow through a corporation, that protection narrows. Business borrowing by an incorporated company between $10,000 and $500,000 can legally reach 48 percent APR, and above $500,000 there is no legal ceiling at all. None of that means your lender will charge it, and most will not. It means the law stops holding the line where you might assume it does, so the APR in your own agreement is the number that matters.
What businesses request, by province
Request sizes vary by where the business trades. Across Smarter Loans business loan applications from August 2025 to July 2026:
View as table
| Quebec | $109,849 |
| Alberta | $98,218 |
| Ontario | $81,670 |
Source: Smarter Loans business loan applications, August 2025 to July 2026.
Only three provinces clear our reporting threshold, so treat this as a partial picture rather than a national map. It also shows what businesses ask for, not what they are approved for, which on a weak credit file is the more important number and one no platform can publish honestly.
What to fix before applying
- Clean three months of bank statements. No NSFs, no negative days, no large unexplained transfers in or out. This moves decisions more than a score point ever will.
- Make deposits look like revenue. Run business income through the business account consistently; lenders reading a personal account see noise, not turnover.
- Stop stacking applications. Several lenders pulling the same bank data in a fortnight reads as distress. Apply once through one process.
- Size the ask to the deposits. Asking for more than roughly ten percent of annual revenue on an unsecured basis invites a decline whatever your credit.
Rebuilding toward better pricing
Weak-credit business borrowing is a stage, not a category. Take the smallest facility that solves the problem, repay it exactly on schedule, keep the statements clean, and reapply at twelve or eighteen months when your file shows a serviced facility and another year of trading. The difference between advance pricing and term-loan pricing on the same business is the largest saving available to you, and it is earned with time rather than negotiation.
| Lender | Amount | Rate | Revenue needed | Time in business | |
|---|---|---|---|---|---|
| CanaCap | $5,000 to $500,000 | 1.1 to 1.5% factor rate | $10,000 a month | 6 months | See if you qualify |
| BizFund | $5,000 to $500,000 | 1.1 to 1.5% factor rate | $15,000 a month | 6 months | See if you qualify |
| Bizcap | $5,000 to $5,000,000 | 9.99% APR | $20,000 a month | 12 months | See if you qualify |
| KM Capital | $5,000 to $500,000 | 9.99% APR | $10,000 a month | 6 months | See if you qualify |
| Breeze Capital | $10,000 to $1,500,000 | 7.99% APR | $10,000 a month | 6 months | See if you qualify |
One application matches your revenue and trading history against every business lender we list.
Frequently asked questions
Can I get a business loan with bad personal credit in Canada?
Usually, if the business supports it. Lenders lead on revenue, time in business and cash flow; personal credit enters through the guarantee and moves the price more than the decision. Revenue-based products weight credit least.
What credit score do you need for a business loan?
There is no fixed floor, because the business is the borrower. Bank and government-backed lending expects a strong owner file alongside two years of statements. Online revenue-based lenders approve well below that and charge for it.
What is a factor rate and how does it compare to an APR?
A factor rate is a multiple applied to the amount advanced: 1.28 on $50,000 means $64,000 repaid. It is not an interest rate and looks smaller than it is. Convert it to an APR over the repayment period before comparing it with a term loan, or you will pick the dearer option.
Sources
- Canada Gazette, SOR/2024-114, for the business exemption to the criminal interest rate. Verified 2 September 2026.
- Smarter Loans business loan applications, August 2025 to July 2026, for the provincial request figures. Provinces with fewer than 100 applications are not shown; that is a sample limit, not zero demand.
Related reading: how to qualify for a business loan and secured vs unsecured business loans.
Written by:
The Smarter Loans Editorial Team produces in-depth, original content to help Canadians navigate borrowing, credit, and personal finance with confidence.
