How to Get Business Funding During COVID Recovery in Canada

COVID Recovery: What’s Changed for Small Business Funding?

Canadian businesses are moving forward after COVID. The major emergency programs—CEBA, CEWS, CERS, and CRHP—are no longer open for new funding. For example, the Canada Emergency Business Account (CEBA) forgiveness deadline passed on January 18, 2024. Any unpaid balances became regular term loans, due by December 31, 2026 (Government of Canada). Wage and rent subsidies like CEWS and CERS ended in 2021, and the Canada Recovery Hiring Program (CRHP) wrapped up in 2022 (Canada Revenue Agency).

Owners across Canada still feel the strain. Even as the economy improves, cash-flow gaps are common. Missed sales from inventory shortages, late-paying customers, or seasonal dips can cost your business between $15,000 and $40,000 per year in lost opportunities. This affects retail, hospitality, trades, clinics, logistics, and e-commerce businesses in Toronto, Vancouver, Calgary, Halifax, and other cities.

Demand for business loans for small businesses is surging. Over 27,000 Google searches each month focus on this topic (SEMrush). Competition for funding is high. Lenders—including banks and private providers—have tightened some requirements, but new programs and small business cash advance options are available. Many owners are unsure where to start.

Here’s what Canadian business owners need to know about the best small business loans available in 2024.

Best Funding Options for Small Businesses in Canada (2024)

Businesses now have more choices than ever. Here are the main options, including government programs and private lenders:

1. Canada Small Business Financing Program (CSBFP):
This program helps startups and growing businesses with less than $10 million in annual revenue secure bank loans. The government shares risk with lenders, making it easier to borrow for equipment, renovations, or land purchases (CSBFP). For example, a restaurant in Winnipeg secured a $250,000 loan at 6% interest through CSBFP to expand its patio.

2. Business Development Bank of Canada (BDC):
BDC provides direct loans to entrepreneurs nationwide, including online applications for up to $100,000. These loans cover working capital, software, or hiring staff (BDC). A tech startup in Montreal used a BDC loan for $50,000 to cover payroll during a slow quarter.

3. CanExport SMEs:
CanExport SMEs offers cost-shared funding for businesses expanding into international markets. Grants cover travel, marketing, and trade shows. A craft business in Ottawa received $15,000 to attend a US trade fair (Trade Commissioner Service).

4. NRC IRAP:
The National Research Council’s Industrial Research Assistance Program (IRAP) supports technology and innovation. Businesses developing new products may qualify for advisory help and funding (NRC). A robotics startup in Waterloo received $100,000 for R&D wages.

5. SR&ED Tax Incentives:
The SR&ED program provides tax credits and deductions for research and development (CRA). An engineering firm in Edmonton recovered up to 35% of eligible R&D costs.

Alternative Lenders:
Banks often require high credit scores and long histories. Alternative lenders such as Merchant Growth, OnDeck, and GrowthX Capital offer merchant cash advances, revenue-based financing, and business loans for small businesses ranging from $5,000 to $500,000. These providers funded a trucking business in Alberta with $60,000 in 48 hours, based on sales rather than strict collateral.

Demand for business loans for small businesses is at record levels. This means more options, but also more competition and information to review. For details on how small business loans work, or the differences between a merchant cash advance and a traditional loan, see our guide.

Steps to Qualify and Apply for Small Business Loans

Most funding programs, government or private, require:

• Canadian business registration (corporation, partnership, or sole proprietor)
• A business bank account
• Up-to-date CRA filings and compliance
• Financial statements and a cash-flow forecast
• Clear definition of your project or use of funds

For example, a bakery in Saskatoon applying for $40,000 through CSBFP needs recent financials, a business plan explaining how the funds will boost sales, and a summary of costs (such as new ovens or marketing).

Get ready by following these steps:

• Write a business plan: Focus on how you’ll use the money and expected results.
• Prepare financials: Provide up-to-date statements, forecasts, and proof of revenue.
• Define your project: Specific requests—like “$25,000 to buy delivery vans”—are more effective than vague ones.

Tips for applying:
– Submit 2–4 applications to banks, credit unions, and private lenders
– Track deadlines and follow up weekly
– Use the Government of Canada funding finder tool to check eligibility

If you need fast funding—such as covering a $20,000 inventory gap before a busy season—define your project, organize paperwork, and send applications within the same week. Some lenders, including private ones, offer approvals and funding in 48 hours.

For more on requirements and tips, review small business administration loan qualifications.

Mistakes to Avoid When Seeking Small Business Funding

Many business owners face obstacles for preventable reasons. Common mistakes include:

• Incomplete applications: Missing documents or unclear project plans can result in rejection, even if you qualify.
• Not comparing options: Loan rates, fees, and terms vary significantly between banks and private lenders. For example, a $50,000 loan from a credit union may have a lower interest rate but slower approval and stricter collateral rules.
• Overlooking flexible funding: Options like a small business cash advance or revenue-based financing can be much faster for seasonal needs.
• Missing support for startups and women-owned businesses: Grants and targeted loans exist—such as BDC’s women entrepreneur programs—but you must seek them out.

Frequently Asked Questions About Business Loans for Small Businesses

What are the best business loans for small businesses in Canada?
The best loan depends on your needs. CSBFP loans are ideal for equipment and renovations. BDC loans work well for working capital. Alternative lenders provide the fastest cash flow solutions. Compare small business loans to find the best fit.

How do I qualify for a small business loan after COVID?
You must be a registered Canadian business, have a business bank account, be CRA compliant, and have a clear plan for the funds. Most lenders require financial statements and a project summary.

Can startups and women-owned businesses get funding?
Yes. Programs like CSBFP and BDC support startups. Grants and loans for women entrepreneurs are available through BDC and local agencies.

What are the typical small business loan rates?
Bank loans start at 6–9% for well-qualified applicants. Alternative lenders may charge higher rates, but approvals are faster. Always compare total costs and terms.

How do I use the Government of Canada funding finder tool?
Visit the funding finder, answer a few questions about your business, and view matching programs.

Find the Right Funding for Your Business Recovery

Securing business loans for small businesses in Canada during COVID recovery is possible with the right plan and paperwork. Explore government programs, bank loans, and fast private options. Alternative lenders like GrowthX Capital offer simple applications and turnaround in as little as 48 hours for $5,000–$500,000, helping your business bridge cash-flow gaps and grow.

Check your eligibility for business loans for small businesses in minutes—fast, personal, and no credit impact.
Visit growthxcap.com/apply to see your options.