Business loans in Toronto: a field guide for owners

One note before we start: this page does not list Toronto-specific statistics, programs or lenders, because we only publish facts we can source. The national figures below come from Statistics Canada and the Competition Bureau, and the registry information comes from the Government of Ontario, which applies to Toronto businesses like any other Ontario business.

Step 1: Know who you are comparing

Toronto owners usually end up looking at some mix of the four options below. They are not interchangeable, and the right first call depends on how long you have been operating, what the money is for and what you already have with your current bank.

For a sense of scale across the country, according to Statistics Canada, the largest share of SME debt financing in 2023 was provided by Canadian chartered banks (68.5%), followed by credit unions (20.6%), government institutions (9.4%) and online alternative lenders (2.2%). That is a national survey result for all SMEs that asked, not a picture of Toronto, and it says nothing about any one business’s odds.

Statistics Canada also reports that one-quarter (25.7%) of SMEs requested debt financing in 2023, and the most common forms requested were business credit cards (12.1%), lines of credit (10.2%), term loans (7.3%) and non-residential mortgages (3.2%). If you searched for “commercial loans Toronto” because you are buying or refinancing a building, that last category is a different conversation from working capital, so it helps to say clearly which one you need.

Step 2: Decide whether to look beyond your own bank

Many owners only ever ask the bank they already use. Studies cited by the Competition Bureau report that between 2019 and 2022, only 1 in 10 business owners surveyed switched banks, while another 1 in 5 said they would like to switch but had not. Staying with your bank can be perfectly sensible. The useful thing is to make it a choice rather than a default, by seeing at least one alternative in writing before you sign.

Step 3: Build your loan folder

Whoever you apply to, the same handful of documents come up again and again. Getting them together first saves back-and-forth later.

On the business number: the Canada Revenue Agency explains that a BN is used as a standard identifier for a business or legal entity, and that not all businesses need one. An unincorporated business only needs a BN when it registers for program accounts with the CRA. If you are a sole proprietor without one, that is not necessarily a problem, but expect a lender to ask how to identify the business.

On credit: the Financial Consumer Agency of Canada describes a credit score as a 3-digit number from your credit report that shows how likely you are to repay, usually ranging from 300 to 900, with higher being better. It also notes that credit bureaus and lenders use different formulas. Our guide to business credit in Canada explains how lenders read the owner’s file and the business’s own record together.

Step 4: Check what is registered against your business

Toronto businesses fall under Ontario’s registry. The Government of Ontario describes its Personal Property Security Registration system as a public database where searches can be made against an individual debtor, a business debtor or a motor vehicle. Lenders that take security over a business’s personal property should register a financing statement there. The same page explains that a notice of security interest is also called a lien. A new lender may search the register, so it is worth knowing what it shows before they do, especially if you have paid off an older loan and are not sure the registration was discharged. Our PPSA registration guide walks through how to look.

Step 5: Apply, then compare in writing

Here is how an application through Northway Funding works for a Toronto business. Northway Funding serves businesses across Canada, including Toronto, through its online application; its head office is in Vancouver.

1. Apply once. Applying uses a soft credit pull, and the Northway Funding site says there is no impact to your credit score to apply or compare offers. Only the final acceptance step requires a brief credit unlock for the lender, and a lender may run its own checks before funding.
2. Share your bank activity. Connect a bank account securely through Plaid, which Northway Funding uses so it never stores your bank login, or upload your last four months of bank statements through the secure portal. Lenders may ask for more documents during their review.
3. Matching. Northway Funding shares your application with lenders it believes match your profile and presents offers from lenders whose configured criteria fit. There is no set number of offers, and an application may not produce one.
4. Compare. Offers you receive are shown side by side in the portal with term details, total payback and effective APR. An advisor can walk you through the trade-offs between options.
5. Decide. Offers are non-binding until you electronically sign a funding agreement directly with the lender you choose.

As a rough guide to fit, Northway Funding’s FAQ lists $10K+ monthly revenue, 6+ months operating and a 500+ credit score as a typical floor for its small business loan and revenue-based financing products. That is a starting point lenders look at, not a promise: meeting it does not mean approval, and lenders decide.

The part that does not change by city

Northway Funding is not a lender. It operates a platform that matches Canadian small and medium businesses with funding offers from independent third-party lenders, and those lenders decide approval, rates and terms. Each offer, and any funding agreement you sign, is a separate contract directly between your business and that lender, and the funding agreement governs the loan, fees and repayment terms.

Northway Funding does not charge the business a fee. Lenders pay Northway Funding a referral fee on funded deals, and it is not compensated based on the rate or fees of any specific offer. Lender fees can still apply, so include them when you compare. Northway Funding does not guarantee an offer, that an offer will be accepted or that funding will close within any particular timeframe, and it does not provide financial, legal or tax advice. Learn how Northway Funding works, or start an application once your folder is together.

This guide is general information for Canadian business owners, not financial, legal or tax advice. Northway Funding is not a lender. It matches businesses with offers from independent third-party lenders, and those lenders decide approval, rates and terms. Nothing here guarantees an offer, an amount or a timeline. Any examples are illustrative. The actual lender written terms govern any offer you receive.