Business Loans in Ontario
Ontario is home to over 470,000 small businesses. Apply online in minutes for a business loan tailored to Ontario's market, with a fast and simple process from start to funding.
Written by Uriel Manseau, B.Eng., M.Sc. Applied MathematicsStep 1 of 3
What do you need?
What are business loans in Ontario?
Ontario is home to over 470,000 small businesses, the largest concentration in Canada. Business loans in Ontario come from a mix of the five major banks, Ontario-based credit unions (Meridian, DUCA, Alterna, FirstOntario), the Business Development Bank of Canada (BDC), and alternative lenders. Ontario businesses can also access the Canada Small Business Financing Program (CSBFP), which guarantees loans up to $1 million for equipment, leasehold improvements, and property. Ontario typically receives 35% to 40% of all CSBFP loans nationally, reflecting the province's dominant share of Canadian business activity. The Financial Services Regulatory Authority of Ontario (FSRA) regulates Ontario credit unions, while banks fall under federal oversight.
How it works
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Complete a simple application with your business details, financial history, and funding needs. No commitment required.
AI-powered review
Our AI agents analyze your application using alternative data and financial signals beyond traditional credit scores, giving more businesses a fair chance.
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Receive your approved funds directly into your business account. The process is designed to be as quick and straightforward as possible.
Types of business loans available in Ontario
- CSBFP loans (up to $1 million) for equipment, leaseholds, and commercial property through any participating Ontario lender
- BDC term loans ($25,000 to $100,000+) available through BDC offices in Toronto, Ottawa, London, Hamilton, Kitchener-Waterloo, and 10+ other Ontario cities
- Ontario credit union commercial loans from Meridian, DUCA, Alterna, and FirstOntario with flexible terms for local businesses
- Community Futures loans ($5,000 to $150,000) for businesses in rural and northern Ontario through 61 Community Futures organizations
- Futurpreneur loans (up to $60,000 including BDC co-lending) for Ontario entrepreneurs aged 18 to 39
- Starter Company Plus grants (up to $5,000) for new Ontario businesses, administered through local SBECs
- Equipment financing secured by the asset itself, available from Ontario credit unions and specialty lenders
- Lines of credit for ongoing working capital, offered by all major banks and Ontario credit unions
Eligibility for business loans in Ontario
- ✓Ontario-registered business (sole proprietorship, partnership, or corporation registered through the Ontario Business Registry)
- ✓Minimum 6 to 12 months in operation for most lenders (startups qualify for Futurpreneur and Starter Company Plus)
- ✓Annual revenue of $50,000+ for conventional loans (lower for microlenders and Community Futures)
- ✓Personal credit score of 600+ for the business owner (some alternative lenders accept lower)
- ✓Business plan required for CSBFP, BDC, and Community Futures applications
- ✓Valid Ontario photo ID and proof of business address in Ontario
How much can you borrow for a business in Ontario?
Ontario business loan amounts depend on the program and lender. CSBFP loans cover up to $350,000 for equipment and leasehold improvements, plus up to $1 million total when including commercial property. BDC offers term loans starting at $25,000 with no strict upper limit for established businesses. Ontario credit unions like Meridian offer commercial loans from $50,000 into the millions for qualified businesses. Community Futures organizations in rural and northern Ontario provide microloans from $5,000 to $150,000 (some up to $250,000). Interest rates range from prime + 1% to prime + 5% depending on your risk profile, with CSBFP loans capped at the lender's prime rate plus 3%. Ontario businesses benefit from the province's deep lender competition. Toronto alone has every major bank headquarters, dozens of BDC-backed lenders, and a growing alternative lending sector.
Pros and cons of business loans in Ontario
Pros
- + Ontario has the most diverse lending ecosystem in Canada, with hundreds of options from banks, credit unions, BDC, and fintechs
- + CSBFP guarantees reduce lender risk, making approval easier for Ontario small businesses
- + 54 SBECs provide free business plan help and connect you with local financing
- + Ontario-specific tax credits (OITC, OIDMTC, Regional Investment) can offset borrowing costs
- + FedDev Ontario and Community Futures provide non-bank financing for underserved regions
Cons
- - Ontario's 13% HST adds to the cost of equipment and assets purchased with loan proceeds (recoverable through Input Tax Credits for HST-registered businesses)
- - Higher operating costs in the GTA (rent, wages) mean Ontario businesses may need to borrow more for working capital
- - Competition for CSBFP loans is high given Ontario's 40% national share
- - Northern and rural Ontario businesses face fewer in-person lending options despite Community Futures support
Comparing business lenders in Ontario
| Feature | Ontario Credit Union | Major Bank | BDC | Community Futures |
|---|---|---|---|---|
| Typical loan range | $50K - $5M | $25K - $10M+ | $25K - $100M+ | $5K - $150K |
| Interest rates | Prime + 1% to 4% | Prime + 1.5% to 5% | Prime + 2% to 4% | 6% - 12% |
| CSBFP eligible | Yes | Yes | No (BDC has own programs) | Some locations |
| Ontario-specific focus | Yes (Meridian, DUCA, etc.) | National coverage | 15+ Ontario offices | Rural/northern Ontario |
| Startup friendly | Some programs | Limited | Yes (startup loans) | Yes |
| Application speed | 1 - 3 weeks | 2 - 4 weeks | 2 - 6 weeks | 2 - 4 weeks |
Tips for getting a business loan in Ontario
- 1.Visit your local SBEC first. Ontario's 54 Small Business Enterprise Centres offer free business plan reviews and connect you with lenders. This is the single most underused resource for Ontario business owners.
- 2.Look into the CSBFP before borrowing. The Canada Small Business Financing Program guarantees loans up to $1 million for equipment, leaseholds, and property. Ontario receives 35% to 40% of all CSBFP loans nationally, so the program is well-established here.
- 3.If you are 18 to 39, apply through Futurpreneur before a traditional lender. The program offers up to $60,000 (including BDC co-lending) plus 2 years of mentorship.
- 4.Check Ontario-specific tax credits before borrowing. The Ontario Innovation Tax Credit (10% on R&D), OIDMTC (40% on digital media), and the Regional Opportunities Investment Tax Credit (10% outside the GTA) can reduce your effective cost.
- 5.Compare Ontario credit unions against the Big Five. Meridian, DUCA, Alterna, and FirstOntario often offer lower rates and more flexible terms for Ontario-based businesses.
- 6.For rural or northern Ontario businesses, contact your local Community Futures organization. Ontario has 61 of them, and they provide loans and business support where banks have limited presence.
Responsible business borrowing in Ontario
Borrow only what your business can repay from operating cash flow. Before signing, calculate the total cost of borrowing including interest and fees. Ontario businesses can access free financial guidance through their local SBEC (ontario.ca/page/small-business-enterprise-centre-locations) or through the Ontario Chamber of Commerce (occ.ca). If your business is struggling with debt, contact Credit Counselling Canada (creditcounsellingcanada.ca) or speak with a Licensed Insolvency Trustee about restructuring options. The Financial Services Regulatory Authority of Ontario (FSRA) regulates credit union lending practices. File complaints at fsrao.ca.
Frequently asked questions
How do I get a small business loan in Ontario?
Start at your local Small Business Enterprise Centre (SBEC). Ontario has 54 across the province. They help you prepare a business plan and connect you with financing options including the CSBFP. You can also apply online through Sphera Credit for a fast, AI-powered decision.
What is FedDev Ontario and does it fund businesses?
FedDev Ontario is the federal economic development agency for southern Ontario. It funds businesses through programs like the Business Scale-up and Productivity program (repayable contributions up to $10 million) and the Community Economic Development and Diversification program. Northern Ontario is served by FedNor.
Can a startup get a business loan in Ontario?
Yes. Ontario startups can access Futurpreneur loans (up to $60,000 for ages 18 to 39), Starter Company Plus grants (up to $5,000 through SBECs), Community Futures loans (for rural and northern Ontario), and BDC startup loans. Traditional banks and credit unions are less likely to lend without 6 to 12 months of revenue.
What Ontario-specific tax credits can reduce my borrowing costs?
Ontario offers several business tax credits: the Ontario Innovation Tax Credit (10% on R&D), the Ontario Interactive Digital Media Tax Credit (40%), the Ontario Made Manufacturing Investment Tax Credit (10%), and the Regional Opportunities Investment Tax Credit (10% for investments outside the GTA). These credits can offset the cost of investments financed by a business loan.
What is the difference between FedDev Ontario and FedNor?
FedDev Ontario serves southern Ontario (roughly south of Parry Sound). FedNor serves northern Ontario (from Parry Sound north). Both are federal agencies that fund businesses and community organizations, but through different programs tailored to their regions.
Which Ontario credit unions offer business loans?
The largest Ontario credit unions offering business loans are Meridian (Ontario's biggest, $28B+ in assets), DUCA (Toronto-based, $6B), Alterna (Ottawa-based, $10B), FirstOntario (Hamilton, $7B), and Libro (southwestern Ontario, $5B). All are regulated by FSRA and offer commercial mortgages, term loans, and lines of credit.
How does HST affect business loans in Ontario?
Ontario's 13% HST applies to equipment and assets you buy with loan proceeds. However, HST-registered businesses can claim Input Tax Credits (ITCs) to recover the HST paid on eligible business purchases. Loan interest payments are HST-exempt. Factor the HST into your loan amount calculation, knowing you can recover it through ITCs.
What are Community Futures organizations in Ontario?
Ontario has 61 Community Futures Development Corporations, concentrated in rural and northern regions. They provide business loans from $5,000 to $150,000 (some up to $250,000), business planning assistance, and community economic development. They are funded by FedDev Ontario (south) and FedNor (north).
Can I get a business loan with bad credit in Ontario?
Yes, but options are more limited. Community Futures organizations consider the overall business case, not just credit score. BDC is more flexible than traditional banks. Some alternative lenders in Ontario approve businesses with lower credit but charge higher rates (12% to 25%+). Improving your personal credit above 600 significantly expands your options.
What is the Starter Company Plus program?
Starter Company Plus provides grants of up to $5,000 to new Ontario businesses. It is administered through local SBECs and includes business training and mentorship. You must be 18+, an Ontario resident, and starting or expanding a full-time business. This is a grant, not a loan, so you do not repay it.
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