Business Loan in Canada

Apr 2023

May 2026

There is a wide array of services available to businesses in Canada seeking to bolster their cash liquidity. This article will explore some of the most popular options, as well as their best use cases. These financial solutions typically include a combination of bank loans, CEBA loans, government business grants, factoring, cash advances, payday loans, and microloans.

Businesses can utilize these financial options to optimize growth, gain liquidity, bridge emergency situations, or capitalize on opportunities.

Let's delve into our options:

1. Traditional bank loans

This is the most conventional form of financing that small businesses can utilize to obtain Typically, these loans are secured by collateral, and may offer lower interest rates, making them an appealing choice for businesses with strong credit. However, small and medium-sized businesses adhering to conservatism and GAAP principles might have lower perceived financial strength, which can make obtaining traditional financing more challenging, especially if the bank relies on financial statements as part of its due diligence process. This can be particularly problematic for new startups and businesses without a significant financial track record. Furthermore, liquidity provided might be limited if a business is relatively new or experiencing volatility, even with collateral in place.

2. CEBA loans

The Canada Emergency Business Account (CEBA) loans are interest-free loans of up to $60,000 designed for small businesses impacted by the COVID-19 pandemic. These loans are 100% backed by the government and do not require any collateral. Businesses can use these loans to cover operating expenses such as payroll and rent, as well as for purchasing equipment or expanding their operations. The CEBA loans offer flexibility and accessibility with a few caveats. Firstly, the loan forgiveness repayment date has been extended to December 31, 2023, for CEBA loan holders in good standing. This means that loan holders may have to start repaying their CEBA loans as early as 2024. Secondly, eligibility is only applicable to businesses that have had an active business account with their financial institution as of March 1, 2020, and can demonstrate a decline in revenue due to the pandemic.

3. Factoring

Factoring enables businesses to sell their accounts receivable (invoices) to a third-party (a factoring company) at a discount. The factoring company then acts as the agent to collect payments from the invoice customer, providing the business with liquidity (cash) based on a certain percentage of the invoice amount. Factoring can significantly improve cash flow for small and medium-sized businesses by offering liquidity and quick access to funds. It is also helpful that the factoring company will be the one taking care of ensuring invoices are paid, freeing up valuable resources for small businesses.

4. Government business grants

The Canadian government provides an array of business grants designed to help small businesses flourish and These grants typically target specific industries or business activities, such as clean technology, innovation, workforce development, and international trade, among others. A considerable number of grants currently emphasize research, development, and exporting. The application process for these grants can be intricate, requiring well-prepared grant proposals that effectively communicate the business's objectives, anticipated outcomes, and potential impact. This process is often competitive, as numerous businesses vie for the limited funding available. Newer businesses or those without prior grant writing experience may find this process daunting, and may benefit from seeking professional grant writing assistance or collaborating with experienced partners in their industry. Despite the challenges, securing a government grant can be a game-changer for small businesses, providing essential funding without the burden of repayment, and fostering growth, innovation, and competitiveness in the marketplace.

5. Payday loans or Microloans

Payday loans and microloans are small, short-term loans that are typically utilized to address unexpected expenses or navigate temporary cash flow gaps. While these loans may not be suitable for long-term financing needs due to their relatively higher interest rates and fees, they play a vital role in providing financial support during emergencies. By offering quick access to funds, payday loans and microloans help businesses remain afloat and operational during challenging times, allowing them to successfully weather temporary cash flow issues that are anticipated to improve in the near future. This targeted financial assistance can be a lifeline for businesses, enabling them to maintain stability and continue serving their customers as they work towards recovery and growth.

6. Cash Advance

A cash advance, particularly in the form of a Merchant Cash Advance (MCA), is an innovative financing solution that provides businesses with a lump sum of cash in exchange for a percentage of their future sales (typically credit card sales). Cash advances and MCAs can be exceptional financing options for businesses that need funds swiftly or require increased liquidity to seize opportunities that demand prompt. One of the key advantages of this financing option is its speed and flexibility. Cash advances can be processed more quickly than traditional loans, often within a matter of days, allowing businesses to address their financial needs without delay. Additionally, repayment terms are tailored to the business's sales volume, making it a more manageable solution for businesses with fluctuating revenues. MCAs are particularly valuable for new businesses and small enterprises that may face challenges in obtaining traditional bank loans due to a lack of financial history, inadequate financial book strength, or a dearth of collateral. By offering an alternative financing avenue, cash advances empower these businesses to overcome financial barriers and pursue their growth objectives. Ultimately, the various financing options available to Canadian businesses each have their own strengths and specific use cases. Traditional bank loans can be attractive for businesses with strong credit, while CEBA loans offer interest-free financing for those affected by the COVID-19 pandemic. Factoring provides immediate liquidity to businesses with outstanding invoices, and government grants can support targeted industries and activities. Payday loans or microloans can assist in managing short-term cash flow gaps. And cash advances offer rapid access to funds for businesses lacking financial history or collateral. The choice of financing option will depend on the unique needs and circumstances of each business. By understanding the advantages and limitations of each option, businesses can make informed decisions about the most suitable financing solution to support their growth, liquidity, and success.

September 7, 2019

May 12, 2026

Essential Steps to Become a Successful Small Business

Around 50 percent of businesses will close their doors before their 10th anniversary. Rates of survival are different depending on the industry you’re in. Every successful small business takes some essential steps. If you want to drive success for your business, follow these tips.

Focus on Your Clients

No business can survive and thrive without customers. By focusing on your customers, you’ll deliver great service and delight them every time. Over time, this means better relationships with your clients. In turn, they’ll buy more and they’ll tell their friends about your business.

Make Marketing a Priority

Nobody can work with your business if they don’t know you exist. That’s why marketing efforts are so vital to small businesses. Invest in a marketing plan and get the word out. Ask your customers to give you a review, or use social media to promote your brand.

Hire the Right People

Working with the right team is another essential step for any small business owner to take. If your people are dedicated and passionate, they’re ready to help your business grow. They’ll also be able to deliver better products and services to your customers. A team that’s ready to go the extra mile is one that’s headed for success.

Use Technology to Grow

Whether it’s a mobile app or a new cloud server, the right technology can help your business grow. Successful small businesses use programs and devices that help them delight customers.The technology could help you cut costs and deliver faster service to your clients.

Find the Right Funding Options

Hiring an employee, buying the right technology, and implementing a marketing plan all cost money. Successful small business owners leverage alternative financing like small business loans or MCA to make it all possible.Discover more about merchant cash advances and other alternative funding options. One of them could provide your business with the funds you need to thrive in 2019.

August 19, 2021

May 12, 2026

5 Ways To Market Your Small Business On A Budget

Marketing is one of the aspects of your business that takes a lot of your revenue. Business owners are sort of blackmailed into spending too much cash just because they have to outweigh their competitors and sort of 'steal' customers away from them. That's how the world of business works. However, a small business is already short on funds, and they can't pour that much money into marketing without affecting operational costs. If you find yourself in a situation where you need to up your marketing game but don't have the funds to do so, you're at just the right place. Here are five things you need to know about marketing small businesses on a budget.

1. Stay Active on Social Media

Social media is one of the best forms of marketing that you have, and it's totally free. A lot of businesses look at social media as a tool just for outreach. It's a lot more than a way just to communicate with your audience. Social media provides your business with access to millions of people all over the world. The best part is that it doesn't matter what kind of business you have. You'll find tons of customers through social media.

2. Focus on Loyal Customers

Finding new customers is something that every business has to do to survive. You have to scale your business to grow substantially, and that can only happen when you have new customers. However, in an effort to obtain them, companies often overlook their current loyal customers. We consider that a huge opportunity being missed. You can offer rewards, dedicated customer support, and discounts to ensure that these people stay interested.

3. Think of Local Communities

Many businesses can take advantage of their local communities for growth and brand recognition. The best part is that you can advertise your business at some charity events, major gatherings, fairs, etc.

4. Reward Programs

Your current customers can be a gateway to obtaining brand-new clients as well. Reward programs are an amazing incentive that encourages people to recommend your company or service to their friends and family. Word of mouth drives an average of $6 trillion in revenue for businesses globally. That's more than enough incentive you need to start a rewards program.

5. Merchant Cash Advance

If you're planning to ramp up your marketing efforts but don't necessarily have the budget on-hand to make it happen, there are many financial organizations in the market that provide merchant cash advances. These MCAs are a lot different as compared to standard business loans. Instead of having to pay the money back in a lump sum, you’ll be returning the money through a percentage of your profits.

Closing Thoughts

Marketing does work, especially when it's carried out effectively and with consistency. Many will argue that it's one of the most profitable and, if you can’t seem to get your marketing done on a budget, 2M7 financial solutions is here to help you. We offer merchant cash advance to businesses in Canada. So, if you need some extra cash to fund your marketing campaigns, give us a call today to learn more.

June 26, 2020

May 12, 2026

Ideas for Newbie Entrepreneurs in 2020

The business environment has changed rapidly for the young entrepreneurs in the first few months of 2020, and the overall outlook for many industries hasn’t been exactly rosy. That may be enough to stop some people in their tracks. Is it really a good idea to create a start-up in this business environment?For those who are willing to look, though, opportunities abound. Tech businesses specializing in remote work and delivery services have been flourishing. As much as the environment is challenging, it’s also a rich space for reimagining the way people go about their daily lives.If you’re pondering a new business in 2020, take a look at some of these innovative ideas.

Everything Online

In March 2020, almost every business owner scrambled to move their operations online in some way. While some businesses have to be operated out of a factory, many others can take advantage of eCommerce and mobile apps to keep running.Tools for remote work, such as video conferencing and online workspaces, have boomed. Some innovators have looked to ways to create events in online spaces. Plenty of media companies are offering up entertainment in new and exciting ways, such as through livestreams.

Seeking New Ways to Connect

Self-isolation, social distancing, and quarantine have made it more difficult to connect with friends and family. As such, people are looking for new ways to stay connected, as well as new ways to connect.A business idea that brings people together in a new way could go far in 2020.

Focus on the Essentials

The current business climate has also caused people to refocus on the essentials: food and medications. If your business is related to medical equipment, pharmaceuticals, or food, you likely have a good chance.Innovative ways of bringing people essentials will be at the top of the hot list of ideas for entrepreneurs in 2020.

Funds Make It Real

No business can get off the ground without the right funding. If you’re looking to start a business, then you should make sure you know all about business loans, merchant cash advances, and other funding options. With them, you can make a good idea a better reality.