Ways For Small Businesses To Get Funded In Canada

small business owner in front of store

Capital is key for any company, and it doesn’t matter whether your brand is big or small, finding the right funding can be a ‘make or break’ moment. Businesses often find themselves searching for additional capital when looking to invest in new equipment, open a new office, expand their operations, or simply when starting out and trying to make a name for themselves.

With Canada becoming a real haven for start-ups, more and more entrepreneurs are launching their own companies on Canadian soil. In the vast majority of cases, new business owners have a distinct lack of initial capital, relying on funding sources like loans and lines of credit to get the help they need to bring their ideas to life.

So what kinds of options do you have, as a small business owner in Canada, when it comes to funding? Well, while classic business loan is the obvious option, there are plenty of other choices out there, including credit options, alternative lenders, and even tax incentive programs that could make all the difference to your brand’s chances of success. Here are some examples.

Small Business Loans

Often, the simplest option for any start-up or small business in Canada in need of additional funding is to pursue a simple small business loan. Finding a loan for a small business is relatively simple, and all start-ups operating in Canada with annual revenues of under $10 million can qualify, applying quickly and simply with a local bank, credit union, or Caisse Populaire.

The funds obtained in a small business loan can be used to purchase additional land or buildings for your business, fund the improvement or renovation of an existing location, or buy new or used equipment to carry out your day to day operations.

Tax Incentives

The Canadian government has also established a range of tax breaks and tax incentive programs for certain small businesses, depending on their field of work. One example is the Scientific Research and Experimental Development tax incentive program, which can offer tax deductions and even cash refunds to companies investing in research and development. 

The SR&ED program is a great option for companies that are carrying out scientific or technological research, with thousands of businesses benefiting from this initiative each and every year. There are plenty of other tax write-offs and tax advantages you can learn about as a small business owner, and it’s wise to undertake the necessary research and learn about all of your options.

Alternative Lenders

It’s important to note that not every small business in Canada will necessarily be able to qualify for a small business loan via conventional means like banks and credit unions. Often, these institutions will have quite strict requirements regarding things like credit score, annual revenue, and how long the business has been operating.

If you aren’t able to qualify, don’t despair. There are other options out there in the form of alternative lenders. Online, you can find countless lenders across Canada who will be willing to be more flexible in regard to eligibility requirements, looking past poor credit scores and other issues in order to help businesses in need. Be warned, however, that these lenders may impose higher interest rates and fees.

Lines of Credit

Another option a small business owner might consider when looking for funding, especially for those urgent situations that can arise now and then, is setting up a line of credit. This is another popular option among small Canadian businesses, and it can be acquired from both banks and alternative online lenders, depending on your situation.

A line of credit works a lot like a credit card; it gives you a credit pool you can tap into as needed, and you can use the money as you wish for anything from buying a new piece of equipment to covering the monthly utility bills at your working location. You only have to pay interest on the credit you actually use, so this is a good option as a back-up, emergency fund for those unexpected occurrences.


Setting up a small business can feel like a big challenge, and it’s true that a lot of start-ups can struggle in their early years. However, finding funding doesn’t have to be so difficult; there are a lot of options out there, from tax incentives to loans, and it’s important to be aware of all of the options available to you in order to make the right choice for your company.

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