Business loans: borrow against the business, or unlock the property

Sort the three kinds first: unsecured, secured, government-guaranteed

Unsecured business credit (credit-based loans, business credit cards, online lenders): fast, nothing pledged — and in exchange, the highest rates and smallest amounts, riding entirely on the business’s statements and your personal credit.

Secured: assets do the talking — property, equipment, receivables. The rate follows the hardness of the collateral: property-secured is cheapest, equipment next, receivables after that.

Government-guaranteed (CSBFP): in between — the government absorbs a slice of the risk so a bank can approve a file it otherwise couldn’t. Next section.

CSBFP: a government guarantee that gets “almost there” businesses approved

The mechanics of the CSBFP (Canada Small Business Financing Program): you still borrow from a bank, but the government guarantees the loan, shrinking the bank’s risk enough to approve files it would otherwise decline. Open to businesses operating in Canada with gross annual revenues of $10 million or less (farming excluded — that’s FCC territory).

Amounts and uses: up to $1.15 million total per borrower. Term loans max at $1 million — usable to the full amount for owner-occupied property; equipment plus leasehold improvements cap at $500,000 within that; intangibles and working capital at $150,000. A separate line of credit caps at $150,000.

Pricing has legal ceilings: floating at most prime + 3%, fixed at most the lender’s residential mortgage rate + 3%, lines of credit at most prime + 5%, plus a 2% registration fee that can be rolled in. Parameters are as the government publishes them. It is not free money — but for a business with a thin down payment and a short history, it is often the only route that outfits property, renovations and equipment in one pass.

Feeding the business from home equity: cheapest, eyes open

Refinancing a home or opening a HELOC and putting the equity into the business is the lowest-rate route on this page — underwritten on you and the property, not on the business’s statements. In the early stage, when the books can’t yet tell a story, it is often the only route that works.

The eyes-open part, in plain words: this pledges your house against the business’s ups and downs. If the business can’t pay, the pressure lands on your home. So this route suits money with a clear purpose and arithmetic that closes — inventory, equipment, buying your premises. It does not suit plugging a hole of ongoing losses.

There is also a sequencing question: house first or CSBFP first, lock the term loan or keep the line open — the order changes your refinancing room for years. This is exactly what someone who understands both mortgages and business credit should map with you.

Buying your own shop or warehouse: stop renting by default

Once a business is stable, this is the calculation most worth running: rent to a landlord is pure expense, while part of every mortgage payment becomes your own equity. Whether rent-to-own pencils depends on price, rate and how many years you plan to operate — a ten-minute calculation.

For a storefront, see retail & plaza; for a workshop or warehouse, see office & industrial. The CSBFP play for small businesses buying their own premises (term loans up to $1 million) is written into both.

One thing many owners don’t know: lenders often give owner-occupied business property better terms than investment property — because you will fight hardest for the place your own doors open.

Equipment, vehicles, receivables: each has its own channel

Equipment financing and leasing: the equipment itself is the collateral, so even young businesses often qualify — the lender is reading the asset’s residual value, not just your statements. Kitchen equipment, machinery, medical devices, work vehicles all fit here.

Receivables financing (factoring): cash today against invoices not yet paid — built for B2B businesses with long payment terms. Costs more than bank credit; what it buys is not waiting to start the next job.

One product deserves a named warning: the merchant cash advance (MCA, the daily-deduction kind). Converted to an annual rate, the cost is often startling — fine to survive one emergency, slow bleeding as a habit. Compute the true annualized cost before signing anything.

What I can do for you, stated plainly

I am a licensed mortgage broker, and property-secured lending is my home ground: refinances, HELOCs, commercial property mortgages, CSBFP-assisted purchases of your own premises — from structure to funding, I run those end to end.

For pure credit-based business loans, equipment financing and receivables financing, I put your numbers and documents into the shape lenders actually read, and connect you to the right bank or institution — the most expensive mistake in business borrowing is knocking on the wrong door with a good business.

Before you call, try to answer three lines: how much, for what, repaid over how long. Answer those and the right door mostly picks itself. Can’t answer them yet? Call anyway — working out those three lines together is what the first ten minutes are for.

Common questions