Small business loans in Ontario: where to get one

This guide covers Ontario and the routes that its sources say operate there or across Canada. It is a map of where to look, not a ranking, and it does not tell you which lender or loan to pick or whether a business will qualify. It also does not describe a general provincial loan program, because none of the sources read for this page says Ontario’s government has one or lacks one. The routes below are a shared federal program, the Business Development Bank of Canada, a youth-focused lender, and two federal agencies that support local lenders in different parts of the province. Terms change, so treat each section as a starting point for a conversation with the lender.

Start with a lender that offers a CSBFP loan

The federal government describes the Canada Small Business Financing Program as making it easier for small businesses to get loans from financial institutions by sharing the risk with lenders. The program’s own page tells you to contact a lender near you. Its loan-finder page says to present your business plan directly to any bank, credit union or caisse populaire. The Act that creates the program also lets the Minister designate other organizations as lenders, so the list is not limited to those three types. In practice that means the first step in Ontario is an application to a lender, not to a government office. The program’s guidelines explain that the Act aims to increase the availability of financing to establish, expand and modernize Canadian small businesses.

BDC’s Small Business Loan

The Business Development Bank of Canada offers a Small Business Loan. Its page lists buying inventory, expanding into new markets, hiring and training employees, and paying suppliers among the uses of that loan. BDC’s site menu also shows a Working Capital Loan, described as protecting business cash flow, as a separate product, so ask BDC which product fits your purpose. The Small Business Loan page also lists a business located in Canada among its criteria. BDC’s own page is the place to read its current terms. If you are comparing it with a bank loan, our guide to government loans for small businesses in Canada explains the national picture.

Futurpreneur for younger founders

Futurpreneur, which calls itself a national organization, describes its Startup Program as providing loan financing and mentorship. It describes the program as aimed at aspiring young entrepreneurs, and its page states who qualifies and how much it lends, so read those details there rather than relying on a summary. What the page says is Futurpreneur’s own description of its own program, not a government statement. If you fit its profile, ask what the loan can be used for, whether it can sit alongside another lender’s financing, and what the mentorship involves.

Community Futures lenders in Northern Ontario

FedNor, the federal agency for Northern Ontario, says its Community Futures Program supports Community Futures Development Corporations located throughout Northern Ontario. Among what these corporations provide, FedNor lists access to capital for small and medium-sized businesses and social enterprises. FedNor’s page is dated 2019, so it tells you what the program funds, not the current terms of any local loan. To find your local corporation, the page points to the Community Futures Development Corporations in Ontario website, and then you ask that corporation what it lends for. For the province’s separate Northern Ontario program, read what the Northern Ontario Heritage Fund’s Invest North funds.

Community Futures lenders in rural eastern and southern Ontario

FedDev Ontario describes the Community Futures Program as a community-driven economic development initiative designed to assist communities in Canada’s rural areas. It lists access to capital for small and medium-sized businesses and social enterprises among what Community Futures organizations offer. The agency says it supports Community Futures organizations located within rural eastern and southern Ontario. That wording is about rural areas, so a business in a large city should not assume this route applies to it. FedDev’s page is dated 2016, so use it to learn who the lenders are and then confirm any current loan terms with the local organization.

Questions to ask any of these lenders

The routes above differ in who they lend to and what they will finance, so the same few questions help with each. Ask them in writing where you can, and keep the answers with your application file. If you are buying a business rather than funding day-to-day needs, our CSBFP guide for buyers covers that case.

• Is my business and its location one this lender or program says it serves, and is the purpose I have in mind an eligible use?
• What does the lender need from me to start: a business plan, financial statements, or something else?
• Is the loan secured, and does the lender ask for a personal guarantee or other security?
• What fees and what interest rate apply, and are they fixed or variable?
• If a federal program is involved, does this lender offer it, and what does the lender say about how the program works?