How to Get a Business Loan from BDC in Canada

The path in one paragraph

BDC, the Business Development Bank of Canada, is a federal Crown corporation whose sole shareholder is the Government of Canada. It describes itself as Canada's bank for entrepreneurs. It lends to Canadian businesses that banks consider too young, too small, or too risky, and it complements the role of private-sector banks rather than replacing them. The route has five moves. Pick the loan that matches how long you have been operating. Check the eligibility list for that loan. Gather the documents. Apply online through a Client Space account. Then wait for a BDC advisor to review the file and contact you. Every dollar is repayable with interest. This is a loan, not a grant.

Step 1: Know what BDC is — and what it is not

BDC is the Business Development Bank of Canada, a financially sustainable Crown corporation operating at arm's length from its sole shareholder, the Government of Canada, and it has been serving Canadian entrepreneurs since 1944. Its own pages put it plainly: "As Canada's bank for entrepreneurs, we complement the role of other banks. We take on more risk, offer flexible financing and provide sound advice."

Three facts shape everything that follows:

• It is a loan, not a grant. BDC's FAQ states it directly: "BDC is a commercial bank offering long-term business financing, which must be repaid with interest." Government-backed financing through BDC means a loan supported by the federal government, not free money. If you want grants, BDC points you to the Government of Canada's Business Benefits Finder.
• No down payment is required for a business loan. Collateral depends on the type of loan you select. If your business has solid cash flow but no assets, BDC says there are still options.
• There is a credit check. BDC runs a credit check on all loan guarantors and on members of the board of directors. A good credit history improves your chances, but BDC says it looks at your business's overall potential, cash flow, and management, not just your credit score.

BDC also excludes some businesses outright: charities, religious and fraternal organizations, unions and political or lobbying organizations, government-owned businesses, private schools, medical and personal care centres, residential-property businesses, cannabis and related products, virtual currency and NFTs, financial services, bars and lounges, and gambling operations. Check the FAQ's exclusion list before you spend time on an application.

Step 2: Pick the right BDC door

BDC's loans range from $10,000 up to several million dollars for large growth projects. For most small businesses, one of three doors fits:

The Small Business Loan covers everyday growth spending: buying inventory, developing new products, enhancing energy efficiency, launching a marketing campaign, paying suppliers, hiring or training employees, getting industry-specific certifications, and expanding into new markets. Start-up financing covers buying assets, paying start-up fees, buying a franchise, investing in marketing, creating a website, and hiring a consultant.

If your business has been operating for less than 12 months, BDC does not offer start-up financing directly. Its FAQ says to reach out to one of its partners instead. Futurpreneur, for example, lends up to $75,000 to founders aged 18 to 39. Do not apply to BDC for a business younger than 12 months and expect a yes.

Step 3: Check the eligibility list for your loan before applying

BDC publishes the criteria it is "more likely to qualify" on. Meeting them does not guarantee approval: all applications are subject to a full review of the business and its owners. Check yourself against the list for your amount before you start the form.

A Small Business Loan up to $100,000 comes with faster approval and minimal paperwork:

• At least $100,000 in annual revenue
• Personal credit score of 600 or higher
• Currently generating profits
• In business for at least 24 months
• Business located in Canada

A Small Business Loan over $100,000 and up to $350,000 offers flexible terms and tailored support:

• At least $250,000 in annual revenue
• Personal credit score of 600 or higher
• Currently generating profits
• Financial statements of the last 24 months
• Business located in Canada

Start-up financing up to $150,000 has four requirements:

• Based in Canada
• In business for 12 months or more
• Generating revenue
• Good credit track record

One nuance worth knowing: BDC notes that if your business has been operating for 12 to 24 months, approval timelines may be longer, additional fees may apply, and some eligibility criteria may differ. If you are in that window, expect a slower, more hands-on process than the headline timelines suggest.

Step 4: Gather the package

BDC's FAQ tells you to have your financial statements, business plan, and cash-flow projections ready before you start. The online application itself asks for:

• Business information: complete and up-to-date business information as listed in your business registry. Having a copy of your up-to-date business registry may help. You also provide the names, email addresses, home addresses, and mobile phone numbers for the company's president, members of the board of directors, and shareholders.
• A business void cheque.
• Personal information: one piece of government-issued photo ID.

The form lets you save your work at various points in case you need to obtain details and return later to complete it. Gather the package first anyway: a loan request under $100,000 moves faster partly because fewer documents are required, and an incomplete file is the most common reason a timeline slips. After you submit, BDC may ask for more, depending on the loan: company financial statements, a purchase offer, a Phase I environmental report, an assessment report of asset or structure value, or a list of leases.

Step 5: Apply online through a Client Space account

The application runs online, and a Client Space account is required to complete it. If you do not have one, you create it during the application. The form walks you through it step by step.

For the Small Business Loan, the process BDC describes is three moves: check eligibility in a few clicks, apply online with information about you, your business, its leadership, and shareholders, and then receive funds in a few days after approval. For start-up financing, the flow is: submit a loan request online, then talk to a representative. BDC calls you to discuss your project in detail, including the documents needed for its analysis. Then you receive a tailored loan offer if approved.

Inside Client Space you upload or provide the required business and personal information, and provide consents from your business partners if applicable. If the business qualifies, you accept the loan offer and sign the related documents. If your loan is approved and you accept the offer, you can track the loan from your Client Space account at any time.

Step 6: The advisor review and the loan offer

After you submit, a BDC advisor reviews everything and contacts you to discuss options. That review is the real decision point: BDC states plainly that applicants are not guaranteed approval, and all applications undergo a due-diligence review before any loan offer is made. For start-up financing, the representative's call is part of the same review. Expect questions about the project, the business plan, and your experience, since BDC says it looks beyond banking ratios at the plan's overall potential.

If you are approved, BDC sends you a loan offer based on your financial needs and capabilities. Read the offer, including the rate, the repayment schedule, and any fees, before accepting it in Client Space. For a Small Business Loan, funds can be available in less than a week after approval.

Step 7: Repayment — what to expect

Repayment terms vary by loan type, and your offer governs. What BDC publishes:

• A Small Business Loan up to $100,000 brings approval in less than 10 days, no application or prepayment fees, up to 6 months of interest-only payments, and a 5-year amortization period.
• A Small Business Loan over $100,000 and up to $350,000 brings approval in less than 30 days, with certain fees applying, up to 12 months of interest-only payments, and up to an 8-year amortization period. Repayment terms overall run from 5 to 8 years.
• With start-up financing, you pay only interest for up to the first 12 months of the loan.
• BDC's FAQ works through a 60-month Small Business Loan as its example. The first 6 months you pay interest only and principal payments are deferred. From month 7 onward you make regular monthly payments until the loan is fully repaid.

On the interest rate itself, BDC states the formula and nothing more: current floating base rate plus a variance based on your personal and business information equals the interest rate, so the rate varies from client to client. No rate is stated in this guide because BDC publishes no single rate to state. Some BDC loans are non-blended, which means your monthly principal payment stays the same while interest is calculated on the remaining balance, so payments get smaller over time. Early repayment options are available but depend on your specific product and loan agreement.

Before you go: the checks that save a second application

First, you have picked the right door: Small Business Loan up to $350,000 if you have been generating revenue for more than 24 months and are profitable, start-up financing up to $150,000 if you have 12 months or more behind you, and a partner route if you have less than 12 months. Second, your business is not on BDC's exclusion list. Third, you meet the eligibility list for your amount: revenue, credit score of 600 or higher for the Small Business Loan, profits, and financial statements for the larger tier. Fourth, your package is ready: financial statements, business plan, cash-flow projections, up-to-date registry details, a business void cheque, and one piece of government-issued photo ID. Fifth, you know a Client Space account is required and that you can create one during the application. Sixth, you know the rate is set per client and no figure is promised here. Read the rate, fees, and repayment schedule in your actual loan offer before accepting it. Seventh, if BDC's phone line is faster than the form for your question, its contact number is 1-877-232-2269.

Related guides

• How to Get a Small Business Loan in Canada — the full map of Canadian small-business financing: the CSBFP government-backed loan, Futurpreneur for founders under 40, BDC, and what lenders check.
• Business Grants and Funding Programs in Canada — grants versus repayable loans, and the funding programs that are actually grants.
• How to Open a Business Bank Account in Canada — the business account BDC expects to see, including the void cheque the application asks for.
• How to Start Building Credit in Canada — the personal-credit side of a loan approval, which matters because BDC checks guarantors and directors.
• How to Incorporate Federally vs Provincially in Canada — costs and structure choices before you borrow in the business's name.

Sources

• Business Development Bank of Canada, "Small Business Loan - Apply online for up to $350,000" — the $350,000 maximum, the up-to-$100,000 and $100,000-to-$350,000 tiers with their approval timelines, fees, interest-only periods and amortization periods, the eligibility lists for each tier, the uses of the loan, the three-step online application, the information the form asks for, the interest-rate formula, the 12-to-24-months operating note, and funds available in less than a week after approval —
• Business Development Bank of Canada, "Start-up Financing And Start-up Loans" — the $150,000 maximum, the 12-months-or-more, generating-revenue and good-track-record requirements, the uses of the loan, the submit-request-then-talk-to-a-representative process, and up to 12 months of interest-only payments —
• Business Development Bank of Canada, "BDC Business Financing FAQs: How to Get a Business Loan with BDC" — the $10,000-to-several-million-dollar loan range, the Client Space account requirement, the advisor review after submission, the documents to prepare and those that may be requested, the credit check on guarantors and directors, the no-down-payment rule, the eligibility criteria and exclusion list, the repayable-not-a-grant statement, the 60-month repayment example, and the under-12-months partner route —
• Business Development Bank of Canada, "Business loans and business financing" — the $10,000-to-$100,000, $100,000-to-$350,000, and over-$350,000 bands with their approval timelines and terms, and the apply-online steps —
• Business Development Bank of Canada, "A different kind of bank – About Us" — BDC as a financially sustainable Crown corporation at arm's length from its sole shareholder, the Government of Canada, serving Canadian entrepreneurs since 1944, and complementing private-sector financial institutions —

No interest rate figure is stated in this guide, because no BDC page states one: the rate is the current floating base rate plus a variance based on your personal and business information, so it varies by client — confirm the rate in your own loan offer before signing. No fee amounts are stated for loans over $100,000 and up to $350,000, because BDC's page says only that certain fees apply without itemizing them. No approval timeline is stated for start-up financing, because BDC's start-up financing page publishes none. No maximum is stated for loans over $350,000 beyond the FAQ's "several million dollars" range, because BDC publishes no fixed cap for that band. BDC's Inclusive Entrepreneurship Loan is not covered in this guide, because its details could not be verified on BDC's pages. Re-check the BDC pages listed above on the day you apply: they govern over any summary, including this guide.