A complete guide to current business loan rates in Canada. Compare options from banks, credit unions, and alternative lenders to find the best rate for your business.
Understanding business loan rates is crucial for any Canadian entrepreneur seeking financing. Rates vary dramatically depending on the lender, your credit profile, and the type of financing you need. This guide breaks down everything you need to know about business loan rates in Canada in 2026.
Business loan rates in Canada typically range from 3% to 30%+ APR, depending on the type of lender and your qualification profile:
| Lender Type | Typical Rates (APR) | Best For |
|---|---|---|
| Big Banks (TD, BMO, Scotiabank) | 5% - 12% | Established businesses with strong credit |
| Credit Unions | 4% - 10% | Member-owned, flexible terms |
| Online Alternative Lenders | 8% - 25% | Fast approval, less strict requirements |
| Merchant Cash Advances | 15% - 40%+ (factor rate) | Short-term, revenue-based repayment |
| SBA Government Loans | Prime + 2.25% - 2.75% | Long-term, lower rates with government guarantee |
Lenders consider multiple factors when determining your interest rate:
Your personal and business credit scores are the primary factors. Higher scores = lower rates.
Lenders prefer businesses with consistent revenue. Higher revenue often means better rates.
Older businesses with track records qualify for better rates than startups.
Secured loans with collateral typically have lower interest rates.
As of early 2026, the Bank of Canada's prime rate remains competitive for business borrowers. Variable-rate business loans are priced at prime plus a markup, while fixed-rate loans lock in a rate at the time of approval. Many businesses are currently benefiting from the relatively low rate environment compared to the rate hikes of previous years.
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