What are Alberta's best business loan offers in 2024?
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Is your business not reaching its full potential because it needs a tactful injection of funds? The saying goes, you need money to make money, so with you in mind, we have had our experts dig deep to give you all you need to know about Alberta Business Loans.
With approximately a quarter of Canadians interested in becoming entrepreneurs, this guide will answer pressing questions like: "How do Business Loans work in Alberta" or "Can I get a business loan with bad credit" and more.
Alberta's business loans: 5 key take away
- Business Loans in Alberta aren’t one size fits all, using our comparison tool and business loan calculator will ensure you get the best rates possible for your business.
- There are multiple types of lenders available to work with, each with their own advantages and disadvantages.
- The purpose of your loan is important to help you choose the right loan type and avoid unnecessary debt or higher fees.
- The options for your Alberta business loan will depend if your business is a startup or established
- There are business loan options in Alberta if you have bad credit.
Top 3 best business loan offers in Alberta
Smarter Loans, get the financing you need in just a few days
A leading online lender, Smarter Loans offers Alberta business owners hassle-free funding when needed!
Using their services gives access to multiple rates and policies with a streamlined application process. You can receive the financing you need in just a few days!
Need help finding what you're after? Speaking with one of their informed representatives ensures you have the coverage you need to rest easy knowing you are covered for any unexpected expenses!
Here is why we like Smarter Loans:
- Wide Range of Options
- Quick and Simple Application Process
- Excellent Customer Service
Loans Canada, a wide range of loan options
Looking for a reliable lender to help grow your Alberta business? Loans Canada can help. Their tried and true representatives take the guesswork out of the process and help connect you with the best terms and rates possible.
With a simple application and funding available within a few days, you can ensure funding doesn't hold back your business potential!
Loans Canada is renowned for offering a comprehensive and customer-focused approach to business lending, you’ll be in great hands!
Here is why we like Loans Canada:
- Wide Range of Options
- Quick and Simple Application Process
- Excellent Customer Service
LoanConnect, get a loan easily through their online process
As an industry leader, LoanConnect has a reputation for connecting you with the perfect business loan in Alberta. Their approachable platform is intuitive, and the no-fuss approach sets them apart and aids in getting you the best business loan you can!
With a vast network of lenders, you can secure the financing you need quickly and easily.
Whether you need working capital to grow your business or funds for a specific project, get the funding you need to take your Alberta business to the next level.
- Quick and online process
- High credit score required
- Online services
How do business loans work in Alberta?
Business financing in Alberta works very much the same for the rest of the country. A business owner can connect with a lender to apply for a lump sum of money that they will contractually repay over a set time period (the term) with interest once approved. Generally, these payments will be monthly.
There are multiple types of lenders to choose from depending on your financial health and the size of your business:
| Lender Type | Use Case |
|---|---|
| Banks & Credit Unions | If you are an established business with a good credit score, you will benefit from lower interest rates, higher payout amounts, and longer repayment terms than other lenders. |
| Online Lenders | As a startup or small business with lower credit scores, an online lender can be your ally. Online lenders have less strict approval requirements, lower loan amounts, and flexible repayment terms, making them a great option if you're looking for these benefits. |
| Alternative Lenders | If you struggle to qualify for a business loan through banks or other traditional lenders, you'll love Alternative Lenders' flexibility. Alternative lenders understand the unique challenges of running a small business, so their approach is less rigid with more of a custom feel to lending. |
| Private Investors | Often renowned for the most repayment flexibility and more straightforward paperwork than other loan types, private investors can also offer personalized business advice to help your business succeed. |
Once you choose the type of lender that works best for you, you will need to understand the 2 types of interest you may be charged.
- Fixed: The percentage remains the same for the whole duration of the loan. It is predictable and great for budgeting the repayment as you will know exactly how much you will pay month over month. If the market falls, you may pay a higher interest rate than the market rate.
- Variable: The percentage can fluctuate month over month depending on market conditions. There is potential for savings if the interest rates decrease, but it can also increase over time, making it harder to budget for repayments.
The amount of money, the interest percentage, and the term you qualify for will depend on:
- Your credit score.
- Your debt-to-income ratio.
- How well your business is doing, and how long it's been operating.
- The purpose of your loan.
Good to know
Each lender will consider these but may have different offerings for your situation, so using a comparison tool like ours to shop around and compare lenders is crucial to getting the best deals.
Most lenders will need to review some documentation before they can offer funding. You can anticipate needing to provide:
- Financial Statements
- Tax Returns
- Business Plans
- Proof of Ownership
Expert advice
Are you considering if you can afford the payments of a business loan? We have crafted a Business Loan Calculator! Just input your desired amount and the loan rates and term you found that suit you best to work out your estimated monthly payments.
Are there different types of business loans in Canada?
Alberta business loans aren't exclusive to just one type. You will notice various options available from different lenders, which means you can find the ideal fit for your needs.
Startup Business loan in Alberta
Have you been in business for less than two years? Or maybe your credit is lower than you'd like? Looking into a startup business loan might be a game-changer to unlocking your business's full potential.
Designed to cover your initial expenses like essential equipment, inventory or getting promotional materials, startup business loans are sure to help you through the challenges of getting your business off the ground from the get-go.
Established Business loan in Alberta
Have you been in business for over two years and have good standing credit? Many lenders will offer more favourable 'fine print' for your business financing in Alberta, and this is due to being seen as less 'risky' than start-up businesses. Established business loans are most commonly used for the expenses to expand your business, renovations, or even debt consolidation.
Types of Business Financing in Alberta
Below you will learn the different loan types in Alberta offered by the varying lenders. Comparing the pros and cons of each will help you assess which is the best fit for your business.
| Loan Type | Pros | Cons | Use Case |
|---|---|---|---|
| Term Loans | Fixed payment and interest rates Long repayment term Large loan amounts | Difficult to qualify for Longer application process Often requires collateral | Equipment purchase Business expansions Long term projects |
| Lines of Credit | Flexibility to withdraw funds when you need Only pay interest on the money you use Variable interest can be cheaper | Difficult budgeting the variable interest Can be tempting to overspend Credit limit may be smaller than other loans | Seasonal fluctuations in income & expenses Emergency funds Business expansions |
| Invoice Financing | Fast approval process No waiting for customers to pay invoices Often no collateral required | Higher fees than other loan types Perception of the business having hardships Limited to revenue generated by outstanding invoices | Any purpose, the loan is to cover the cash flow of businesses with outstanding invoices. |
| Equipment Financing | The equipment itself is collateral The interest may be tax deductible Aids in keeping cash flow open | Higher fees than other loan types Risk of negative equity Repossession of equipment if payments default | Purchase brand new equipment Replace old equipment Business expansion |
| Merchant Cash Advances | Fast approval process Often no collateral required Easy repayment, comes from a percentage of daily credit card sales | Higher fees than other loan types Credit limit may be smaller than other loans If low or no sales, repayment is difficult | Emergency funds Seasonal fluctuations in income & expenses Poor credit or no collateral |
The Alberta government offers several types of grants to help businesses succeed throughout the province. There are multiple business sectors that qualify, along with minority groups, such as companies owned and operated by Indigenous peoples, women, or new immigrants to Canada.
What are the business loan interest rates in Alberta?
The interest rate you pay for your small business loan will depend on a variety of factors, such as:
- The lender you choose
- The type of loan you choose
- Your credit score
- If you have collateral to secure your loan
Good to know
Rates can range from as low as 2.99% to as high as 49.96%, so shopping around and using comparison tools like ours is critical to getting the best rates!
How large of a business loan is available in Alberta?
You will find it challenging to find a set payout amount for an Alberta business loan. The amount each lender approves you to borrow will be based on each business' situation with the following factors reviewed:
- Credit score
- Cash flow
- Industry
- Collateral
- Purpose of the loan
- Type of loan
- Debt the company currently carries
- The owner's personal credit history
In most cases, if you have a good credit history with an established business, the risk is deemed lower, and you are more likely to be eligible for more significant payout amounts across multiple lenders.
For example
You have a credit score of 700, you apply for a term loan through Smarter Loans for your Alberta Business Loan. After filling out their simple pre-application form you qualify for a loan of $500,000 at 7.99% interest rate across a 12 month term. Your monthly payments will be $ 43,491.90 per month.
How to get a business loan in Alberta?
Getting a business loan is a major decision. We have crafted a step-by-step guide that will take you through the process, giving you the confidence that you have the best chance to unlock your business potential.
- Map out what you need to loan for and how much you will need. Doing this will ensure you aren't financing more than you need, sending you into unnecessary debt.
- Do a soft credit check through an online credit score service. A loan application will negatively affect your score temporarily, so knowing if you are in good standing before completing an application is essential. If your score is lower than you anticipated, you can choose to work on this before taking out a business loan or looking into lenders and loan options that work with low-credit holders.
- Sort your documentation to ensure you have everything you need for the application. This will include financial statements, tax returns, and business plans to show lenders the health of your business.
- Decide which lenders and loan types are best for you. Using our comparison tool and business loan calculator ensures you get the best deal in the industry and know what to expect for your monthly payments.
- Fill out the application with the lender of your choice, providing all the documentation you prepared in step 3. Be prepared to answer some basic information about you and your business.
- Sit tight while the lender reviews your application. Depending on the type of loan and the lender, this could take a few days up to a few weeks. They will contact you if they need more details or to let you know the final decision.
- If they have approved your loan application, review the terms and the fine print to ensure they fit well with your business goals. If so, sign the loan agreement and organize the delivery of the funds with the lender.
- Make timely payments for the loan's lifespan to avoid any repossession of collateral, damage to your credit score, and additional fees.
Can I get a business loan with bad credit?
Getting a business loan in Alberta when you have bad credit isn't impossible. Several lenders and loan types are there to help you and your business access the funds you need to succeed.
While traditional lenders, such as banks and credit unions, can be more challenging, online or alternative lenders have more options and less stringent application requirements aimed at business owners with low or no credit. Many opportunities for entrepreneurs with low credit have higher interest rates, so it's even more important to choose the lender and use tools like our business loan calculator to ensure you can repay the loan and not damage your credit further.
Some common types of business loans for those with bad credit include:
- Alternative lenders: Non-bank lenders may have more flexible lending criteria than traditional banks. They may be willing to work with businesses with bad credit, although interest rates and fees may be higher.
- Equipment loans: Since the loan is backed by collateral, lenders may be more willing to work with businesses with bad credit.
- Invoice financing: Allows businesses to get an advance on outstanding invoices. Since the value of the invoices secures the loan, lenders may be more willing to work with companies with bad credit.
