How do you get a small business loan in Ontario?

Ontario has no provincial Crown lender, so a small business loan in Ontario comes from the same places it does across Canada: a bank or credit union (often under the federal Canada Small Business Financing Program), the Business Development Bank of Canada, Futurpreneur for founders aged 18 to 39, a local Community Futures office, or, for established firms, the federal regional agencies FedDev Ontario and FedNor. The province itself funds small grants, not loans. Volume tells the story: ISED's 2024–25 CSBFP highlights report counts 2,957 CSBFP loans worth $922.3 million in Ontario, 46.1% of the program's loans nationally. The right source depends on the business's stage, its region and what the money buys.

Who lends to small businesses in Ontario?

Banks and credit unions do most of the lending. Statistics Canada's 2023 Survey on Financing and Growth of Small and Medium Enterprises found that chartered banks were 68.5% of SME debt-financing sources nationally, credit unions 20.6%, government institutions 9.4% and online alternative lenders 2.2%. No Ontario-only split is published; in Ontario the market is the big banks, credit unions such as Meridian and Alterna, and a thin government layer.

That government layer is federal. ISED backs CSBFP loans made by banks and credit unions. BDC is a federal Crown corporation that lends directly. FedDev Ontario (southern Ontario) and FedNor (Northern Ontario) are federal regional development agencies. Ontario's 410,154 small employer businesses (ISED, Key Small Business Statistics 2025, December 2024 count) borrow from this mix; no provincial agency sits in it.

Approval is not usually the hardest part. ISED's summary of the 2023 survey reports that 90.9% of SMEs that requested debt financing were approved in full or in part, and 86.4% of the dollars requested were authorized. Those are national figures; the harder work is matching the request to the right lender.

Ontario small business loan sources compared

The table below covers the sources an Ontario owner can realistically apply to. Amounts are program maximums, not typical approvals, and every lender makes its own credit decision.

Source	Amount	Who it's for	Startup-friendly?	How to apply
Banks and credit unions (conventional)	Set by each lender	Most Ontario businesses with cash flow and security	Varies	Directly with the bank or credit union
CSBFP (through a participating lender)	Up to $1.15M: $1M term, of which up to $500K for equipment and leaseholds, plus a $150K line of credit	For-profit small businesses with gross revenue of $10M or less (farming excluded)	Yes	Through a participating bank or credit union, not ISED
BDC Small Business Loan	Up to $350,000	Profitable businesses with 24+ months of revenue	No	Online with BDC
Futurpreneur + BDC	Up to $75,000 ($25,000 Futurpreneur + $50,000 BDC)	Founders aged 18–39	Yes	Futurpreneur application, with mentorship
Community Futures (CFDCs)	Set by each office	Local businesses in the office's region; 24 offices in Northern Ontario	Yes	Local CFDC
FedDev Ontario	$125,000–$10M, interest-free repayable contribution	Southern Ontario firms with 5–500 FTEs and 3+ years incorporated	No	FedDev Ontario application
FedNor Business Growth and Competitiveness	Generally up to 50% of eligible costs, generally repayable	Northern Ontario SMEs, normally with 2 years of operations	No	FedNor application
Starter Company Plus / Summer Company	Grants of up to $5,000 / up to $3,000	Ontario residents starting out; Summer Company is for students 15–29	Yes	Small Business Enterprise Centre

Which Ontario loan fits a startup?

For a pre-revenue or first-year business, three sources are realistic: CSBFP, Futurpreneur and Community Futures.

CSBFP is the largest startup source in the country. ISED's 2024–25 highlights report says start-ups and businesses under one year old received $1.4 billion, or 74.1%, of CSBFP loan value nationally. The program finances equipment, leasehold improvements, real property and a limited amount of working capital, and it is delivered by the bank or credit union. The federal government does not lend the money; ISED's FAQ is explicit that "the money the borrower receives is that of the financial institutions and not the government." If the loan defaults, the government reimburses the lender for 85% of eligible losses under the program's loss-sharing rules. The borrower still owes the debt, and the government takes over the lender's right to collect the reimbursed portion. Our CSBFP lender page covers how the program works.

Futurpreneur fits founders aged 18 to 39. It lends up to $25,000, and BDC can add up to $50,000, for a total of up to $75,000, with up to two years of mentorship. Futurpreneur's portion is priced at RBC prime plus 3%, subject to its published caps. The Futurpreneur business plan guide covers what the application asks for.

Community Futures offices lend locally. FedNor administers the Community Futures Program through 24 Community Futures organizations in Northern Ontario. Each office sets its own loan limits and terms, so there is no Ontario-wide maximum to quote.

BDC's Small Business Loan is not a startup loan. BDC lists 24 months of revenue, profitability and a personal credit score of 600 or more as requirements. Loans up to $100,000 need at least $100,000 in annual revenue; loans above $100,000, up to $350,000, need at least $250,000. See our BDC lender page for the other BDC routes.

Which Ontario loan fits an established business?

An established Ontario business has the widest choice: conventional bank and credit union credit, CSBFP for qualifying assets, BDC, and, for larger growth projects, FedDev Ontario or FedNor.

FedDev Ontario funds southern Ontario businesses through interest-free, unconditionally repayable contributions. Its "how funding works" page says requests normally range from $125,000 to $10 million and cover up to 50% of eligible project costs, with repayment generally starting one year after the project is complete. Its "who can apply" page normally requires a for-profit business with 5 to 500 full-time equivalent employees that has been incorporated and registered for at least three years. This is project financing for a growth plan, not a working-capital loan.

FedNor's Business Growth and Competitiveness stream serves Northern Ontario. FedNor says assistance to businesses is generally repayable, generally covers up to 50% of eligible costs, and ordinarily expects a sustainable business model supported by two years of operations, the capacity to repay, management capacity and a project plan with verifiable cost estimates.

Region shapes the choice. A Toronto or GTA business mostly deals with banks, credit unions, CSBFP, BDC and FedDev Ontario; a business in Sudbury, Thunder Bay or a smaller northern community adds a local Community Futures office and FedNor.

What about buying an existing Ontario business?

Buying a business is financed mainly through banks, credit unions and BDC, and the structure of the deal decides what each will fund. CSBFP can be part of the package when the purchase includes eligible assets such as equipment or leaseholds, but the program's guidelines (Item 5.2) exclude share purchases and vendor take-back financing. An asset purchase and a share purchase therefore produce very different financing plans. Community Futures offices set their own lending criteria, so ask the local office whether it finances acquisitions. Our guide to the business plan for buying a business covers the purchase-specific sections.

What Ontario grants exist, and why they are not loans

Ontario's provincial startup money is two small grants delivered by Small Business Enterprise Centres. The province now also calls them Small Business Advisory Centres, and the 2026 Ontario Budget counts 54 locations. The centres advise, train and deliver grants. They do not lend.

• Starter Company Plus offers a grant of up to $5,000 with training and mentoring. Ontario's program page says applicants must be 18 or older, live in Ontario, be a Canadian citizen or permanent resident, and not be attending school full-time or returning to school. They must contribute at least 25% of the grant amount in cash or in kind.
• Summer Company offers up to $3,000 to students aged 15 to 29 (as of April 30, 2026) who are returning to school: up to $1,500 for start-up costs and up to $1,500 on completing the program. Its guidelines say the application includes a business plan and cash flow.

These grants help with launch costs; they do not replace a loan for a build-out or equipment. A grant can also reduce what a CSBFP lender finances: the program's guidelines (Item 5.1) say financed costs "must be reduced by the amount of grants" related to the assets. For the broader grants-versus-loans picture, see small business grants in Canada versus loans.

What each Ontario lender needs the plan to show

Each source assesses a different question, so one plan rarely fits every lender.

Source	What the plan should show
Bank or credit union (conventional)	Historical financials, cash flow that services the debt, owner equity, available security, management experience
CSBFP lender	Repayment ability; use of funds broken out by CSBFP asset class; quotes or invoices in the borrower's name; spending within 365 days of approval; guarantor information
BDC Small Business Loan	24 months of revenue, profitability, revenue above the $100,000 or $250,000 threshold, owner credit
Futurpreneur + BDC	A launch plan with cash-flow projections the founder can explain, and how the mentorship fits
Community Futures	Local benefit, owner investment, repayment capacity and security, as each office defines them
FedDev Ontario / FedNor	A defined growth project, eligible costs with verifiable estimates, the other 50% of financing, and repayment capacity

The CSBFP rules are the most specific. ISED's guidelines require the lender to check the borrower's credit and assess repayment ability, and each asset class has its own cap.

How should a GTA plan handle the lease?

A lease-heavy plan should be built from the actual lease, not from a generic rent figure. Commercial rents in Toronto and the GTA vary by property type, class and submarket, and no official province-wide or Toronto-wide "typical rent" exists that would suit a retail unit, an industrial bay and an office suite alike.

The plan should show the executed lease or the landlord's written proposal, with:

• Base rent and additional rent (taxes, maintenance and common-area costs)
• Escalation clauses, term and renewal options
• Deposits and any rent-free period
• Who pays for tenant improvements, and what the landlord contributes
• How each of these flows month by month into the cash-flow forecast

The lease term also matters for CSBFP. The program's guidelines (Item 4.1.2) make a leasehold-improvement loan ineligible if the borrower intends to sub-lease the operating space within three years of the loan, with limited exceptions. Tenant improvements should be classed as leaseholds, not real property, because the two sit under different caps. Leaseholds were 64.6% of CSBFP loan value nationally in 2024–25 (ISED).

Interest rates and bad credit in Ontario

Ontario has no provincial loan rate; each lender prices its own loans. For CSBFP loans the federal caps are prime plus 3% for a floating-rate term loan, the residential mortgage rate plus 3% for a fixed-rate term loan, and prime plus 5% for a line of credit. Those caps include the 1.25% annual administration fee. The 2% registration fee is separate and can be financed. For context, ISED's summary of the 2023 SME financing survey reports average rates of 9% on term loans, 11% on lines of credit and 19% on business credit cards.

A weaker credit file narrows the options but does not close them. No source removes the credit check: CSBFP requires one, and BDC's Small Business Loan asks for a score of 600 or more. What a plan can do is show repayment capacity, real owner equity and available security clearly. Our guide to how personal credit affects a business loan covers what lenders look at.

Where immigration plans fit

Immigration program rules are separate from loan rules. Ontario's former OINP Entrepreneur Stream is closed, and the status of a redesign is covered in our OINP Entrepreneur Stream 2026 update.

Bridge Note, a Canadian business plan service that writes lender-ready plans for CSBFP, BDC, and Ontario bank and credit union applications, builds each plan around the lender it is going to: CSBFP asset classes for a bank, project costs and repayment for FedDev Ontario, lease terms for a GTA storefront.

The bottom line

Ontario has no provincial business lender, so the useful question is which federal program or private lender fits the business. Startups look to CSBFP through a bank or credit union, Futurpreneur and Community Futures. Established businesses add BDC and, for larger projects, FedDev Ontario in the south or FedNor in the north. Provincial grants are small, and the Small Business Enterprise Centres that deliver them advise rather than lend. Whatever the source, write the plan for that lender's questions and build a GTA plan from the real lease. If you are preparing an Ontario loan application, book a discovery call.

Frequently asked questions

Does the Ontario government offer small business loans?

No. Ontario has no provincial Crown lender and no province-wide small business loan program. The province funds small grants, Starter Company Plus (up to $5,000) and Summer Company (up to $3,000), delivered through Small Business Enterprise Centres. Loan money in Ontario comes from banks and credit unions, the federal CSBFP through those lenders, BDC, Futurpreneur, Community Futures offices, and the federal regional agencies FedDev Ontario and FedNor.

Can a startup get a small business loan in Ontario?

Yes, but not from every source. CSBFP loans through a bank or credit union are open to start-ups, and ISED reports that start-ups and businesses under one year old received 74.1% of CSBFP loan value nationally in 2024-25. Futurpreneur lends up to $75,000 with BDC to founders aged 18 to 39, and Community Futures offices lend to startups in their regions. BDC's Small Business Loan, FedDev Ontario and FedNor's business stream all expect an operating history.

Does a Small Business Enterprise Centre give loans?

No. Ontario's Small Business Enterprise Centres, which the province also calls Small Business Advisory Centres, give advice, run training and deliver the Starter Company Plus and Summer Company grants. They do not lend. The 2026 Ontario Budget counts 54 locations. They can help you prepare, but the loan application goes to a bank, credit union, BDC, Futurpreneur or a Community Futures office.

What interest rate will I pay on a small business loan in Ontario?

There is no Ontario rate. Each lender prices the loan. CSBFP loans have federal rate caps: prime plus 3% for a floating term loan, the residential mortgage rate plus 3% for a fixed term loan, and prime plus 5% for a line of credit, with the 1.25% annual administration fee included in those caps. For context, ISED's summary of the 2023 SME financing survey reports an average term-loan rate of 9%.

Can I get a business loan in Ontario with bad credit?

It is harder, and no program removes the credit check. CSBFP rules require the lender to check the borrower's credit and assess repayment ability, and BDC's Small Business Loan asks for a personal credit score of 600 or more. A weaker file can still be financed when the plan shows strong cash flow, real owner equity and security, but the credit decision stays with the lender.

Sources

1. Overview and Highlights 2024-25 — Canada Small Business Financing Program — Innovation, Science and Economic Development Canada
2. Canada Small Business Financing Program Guidelines — ISED
3. CSBFP frequently asked questions for small businesses — ISED
4. Key Small Business Statistics 2025 — ISED
5. Survey on Financing and Growth of Small and Medium Enterprises, 2023 — Statistics Canada
6. Summary of the Survey on Financing and Growth of Small and Medium Enterprises, 2023 — ISED
7. Small Business Loan — Business Development Bank of Canada
8. Core Startup Program — Futurpreneur Canada
9. Funding for businesses in southern Ontario: How funding works — FedDev Ontario
10. Funding for businesses in southern Ontario: Who can apply — FedDev Ontario
11. Business Growth and Competitiveness (BGC) — Northern Ontario — FedNor
12. Our programs — FedNor
13. Starter Company Plus — Government of Ontario
14. Summer Company program guidelines — Government of Ontario
15. 2026 Ontario Budget, Chapter 1B — Government of Ontario