Business Line of Credit vs Loan in Canada: Which Financing Option Fits Your Needs?

Executive Summary

A business line of credit works best when you need flexible, ongoing access to capital with variable timing – you pay interest only on what you draw. A term loan is the better choice for one-time capital investments with predictable repayment schedules. Canadian small business owners can use the 7-question decision framework in this guide to determine which product matches their specific situation, avoiding costly mistakes and unnecessary interest payments.

Why This Decision Feels So Overwhelming (And Why It Doesn’t Have to Be)

Choosing between a business line of credit and a term loan can feel like standing at a financial crossroads without a map. The stakes feel high because they are – selecting the wrong financing product could mean paying thousands of dollars more in interest or finding yourself without flexibility precisely when your business needs it most.

Here’s what banks and lenders won’t tell you directly: the confusion isn’t accidental. Financial institutions often push products based on their margins rather than your needs. A 2024 CFIB survey found that 67% of Canadian SME owners report feeling “overwhelmed” by financing options, and 54% delayed seeking financing specifically because they were uncertain which product to choose.

That hesitation isn’t overthinking – it’s responsible financial planning. The fact that you want to understand everything before applying puts you ahead of business owners who rush into commitments they later regret.

By the end of this guide, you’ll have a clear decision matrix based on five key differentiators:

• How you access and use the funds
• How interest and total costs are calculated
• What flexibility you need during repayment
• How predictable your revenue and funding needs are
• What your business can realistically qualify for

The right answer exists for your specific situation. Let’s find it together.

How a Business Line of Credit Actually Works in Canada

A business line of credit is a form of revolving credit. You’re approved for a maximum amount – say $75,000 – but you only borrow what you need, when you need it. Think of it as a pool of available capital you can draw from and replenish repeatedly.

Interest calculation example: If you have a $75,000 limit but only draw $20,000, you pay interest only on that $20,000. At a rate of Prime + 3% (currently 8.45%), your monthly interest cost would be approximately $141 – not the $528 you’d pay if charged on the full limit.

Repayment offers significant flexibility. Minimum payments typically cover the monthly interest plus a small percentage of principal (often 2-3%). However, you can pay down the balance faster without penalty, and any amount you repay becomes available to borrow again.

Most business lines of credit in Canada are reviewed annually. During this review, lenders assess your business performance and may adjust your limit – either increasing it if you’ve demonstrated strong financials or reducing it if your situation has weakened. In rare cases, lenders can “call” the line, requiring full repayment.

Major Canadian providers include:

• Big Five banks: RBC, TD, Scotiabank, BMO, and CIBC
• Business Development Bank of Canada (BDC)
• Credit unions across provinces
• Online lenders: Thinking Capital, OnDeck Canada, Clearco

Secured vs. Unsecured Lines of Credit

The distinction between secured and unsecured lines of credit significantly affects both your approval odds and your costs.

Secured lines of credit require collateral – real estate, equipment, inventory, or other business assets. In exchange for this security, lenders offer lower interest rates (often Prime + 0.5% to Prime + 3.0%) and higher credit limits (up to $1 million or more at major banks).

Unsecured lines of credit don’t require specific collateral but come with higher rates (Prime + 2.0% to Prime + 7.0%) and stricter revenue and credit requirements. Most unsecured limits cap at $250,000-$350,000 at traditional lenders.

Regardless of security type, personal guarantees are required in approximately 95% of small business financing cases. This means you’re personally responsible for repayment even if your business fails – a reality for both lines of credit and term loans.

Security requirements also affect approval speed. Secured applications require collateral appraisals and additional documentation, potentially adding 1-3 weeks to the process.

How a Business Term Loan Actually Works in Canada

A business term loan provides a lump sum of capital upfront, which you repay in fixed installments over a predetermined period – typically 1 to 10 years for small business loans in Canada.

Understanding amortization: Your monthly payment remains constant, but its composition changes over time. Early payments are heavily weighted toward interest, with more of each payment going toward principal as the loan matures. On a $100,000 loan at 9% over 5 years, your first payment of $2,076 includes $750 in interest and $1,326 in principal. By year four, that same payment includes only $280 in interest and $1,796 in principal.

The predictability advantage is significant for businesses that value budgeting certainty. Your payment amount never changes (for fixed-rate loans), making cash flow planning straightforward. You know exactly what you owe every month for the entire loan term.

Prepayment considerations vary by lender and loan type. Some term loans include penalties for early repayment – typically 1-3 months’ interest – while others allow penalty-free prepayment. This is a critical question to ask before signing any loan agreement.

Major Canadian term loan providers include:

• Big Five banks (same as above)
• Business Development Bank of Canada (BDC)
• Canada Small Business Financing Program (CSBFP) lenders
• Futurpreneur Canada (for entrepreneurs aged 18-39)
• Community Futures Development Corporations

Fixed-Rate vs. Variable-Rate Term Loans

Your choice between fixed and variable rates affects both your monthly payment predictability and your total interest cost.

Fixed-rate loans lock in your interest rate for the entire term. Current fixed rates at major Canadian banks range from 7.29% to 13.49% depending on creditworthiness and security. You pay a premium for certainty, but your costs never increase regardless of Bank of Canada rate decisions.

Variable-rate loans fluctuate with the prime rate. With the Bank of Canada’s overnight rate currently at 3.25% (down from the 5.0% peak in mid-2023), variable rates have become more attractive. However, rates could rise again, increasing your payments.

General guidance: For loans under 3 years, variable rates often make sense given the rate premium for fixed options. For longer terms (5+ years), fixed rates provide planning certainty that many business owners find valuable.

Some lenders offer hybrid structures: fixed rates for an initial period that convert to variable rates afterward.

The Real Cost Comparison: Interest Rates, Fees, and Total Repayment

Advertised rates rarely tell the full story. Lines of credit quote annual rates but calculate interest daily on your outstanding balance. Term loans may include origination fees that increase the effective annual percentage rate (APR) beyond the stated interest rate.

Current Canadian rate ranges (January 2025):

Real scenario comparison – $50,000 needed for 18 months:

• Line of credit (fully drawn): At 8.45%, total interest cost = $6,337
• Term loan: At 9.5% fixed over 18 months, total interest cost = $5,847
• Finding: The term loan saves $490 when funds are fully utilized for the entire period

Same scenario with 60% average utilization on the line of credit:

• Line of credit: Interest on average $30,000 balance = $3,802
• Term loan: Still $5,847 (you pay on the full amount regardless of need)
• Finding: The line of credit saves $2,045 when utilization is partial

Hidden fees to ask about before signing:

• Application or processing fees: $0-$500
• Annual fees (lines of credit): $0-$500 depending on limit
• Origination fees (term loans): 0%-3% of loan amount
• CSBFP registration fee: 2% of loan amount (can be financed into the loan)
• Standby fees on undrawn line of credit amounts: 0.25%-1.0% annually (not universal)
• Early repayment penalties: 0-3 months’ interest for fixed-rate term loans

When a Line of Credit Is the Clear Right Choice

Certain business situations make a line of credit objectively superior to a term loan. If your circumstances match these patterns, you can move forward with confidence.

Seasonal businesses with predictable revenue fluctuations: Retailers, tourism operators, and landscaping companies often need capital for 3-4 months, then pay it back when revenue returns. A line of credit lets you borrow during slow periods and repay during peak season, minimizing interest costs.

Managing cash flow gaps between invoicing and payment: B2B businesses waiting 30-90 days for client payments need bridge financing. A line of credit provides working capital until receivables arrive, without committing to years of fixed payments.

Uncertain funding needs: If you know you’ll need capital but can’t predict exact amounts or timing, a line of credit’s flexibility prevents overborrowing (and overpaying interest) or underborrowing (and facing a funding gap).

Ongoing operational expenses: Inventory restocking, payroll bridges during growth phases, or opportunity purchases that arise unpredictably are well-suited to revolving credit.

Strong cash flow with variable timing: If you can repay quickly when revenue arrives, you minimize interest costs significantly compared to a fixed-term loan structure.

Red Flags That a Line of Credit Isn’t Right for You

Lines of credit aren’t universally superior. Recognize these warning signs that suggest a term loan would serve you better:

• You need the full amount immediately and won’t pay it down for years. A term loan’s fixed structure typically costs less for long-term, fully-utilized financing.
• Financial discipline is a challenge. Available credit can feel like “free money.” If you might draw more than necessary, a loan’s fixed structure imposes helpful constraints.
• Unpredictable revenue threatens minimum payments. Lines of credit require at least interest payments monthly. If slow periods might prevent even minimum payments, a term loan with built-in reserves may be safer.
• You’re funding a one-time capital purchase. Equipment, vehicles, or real estate should typically be financed with term loans matched to the asset’s useful life.

When a Term Loan Is the Clear Right Choice

Term loans excel in situations requiring predictable, structured financing for specific purposes.

One-time capital investments: Equipment purchases, vehicle acquisition, leasehold improvements, or technology systems have defined costs and expected useful lives. A term loan matches financing to the investment’s timeline.

Business acquisition or expansion: Buying another business, opening a second location, or making a major capacity increase involves a known capital requirement with returns expected over years – ideal for term loan structures.

Predictable project funding: Construction projects, product development, or expansion initiatives with clear budgets and timelines benefit from lump-sum funding with structured repayment.

Debt consolidation: Rolling multiple high-interest debts into a single, lower-rate term loan simplifies management and often reduces total interest costs.

Businesses that benefit from payment predictability: If fixed monthly payments simplify your budgeting and cash flow management, a term loan’s structure provides that certainty.

Red Flags That a Term Loan Isn’t Right for You

• Uncertainty about the exact amount needed. If you might need to borrow more later, you’d face additional applications and potentially multiple loans.
• Short-term needs (under 12 months) with quick repayment ability. You’d pay unnecessary interest on a term loan when a line of credit would cost less.
• Funding ongoing operational costs. Recurring needs are better served by revolving credit than repeated loan applications.
• Highly seasonal revenue. Fixed payments during slow months strain cash flow; a line of credit’s flexible repayment adapts to your revenue patterns.

Your Decision Framework: 7 Questions to Answer Before Choosing

Complete this self-assessment to clarify which product fits your situation. Write down your answers – making decisions concrete reduces second-guessing.

1. Do you know the exact amount you need, or is it a range?
   Exact amount = term loan likely; Range = line of credit likely
2. Is this a one-time need or ongoing/recurring?
   One-time = term loan; Ongoing = line of credit
3. How quickly can you realistically repay?
   Under 12 months with variable timing = line of credit; 1-5 years predictable = term loan
4. How predictable is your monthly revenue?
   Highly predictable = either works; Variable = line of credit offers needed flexibility
5. Do you value payment predictability or flexibility more?
   Predictability = term loan; Flexibility = line of credit
6. What’s your financial discipline level, honestly?
   Strong discipline = line of credit works well; Moderate = loan’s structure helps
7. Is this funding a specific asset with a defined useful life?
   Yes = term loan matched to asset life; No = line of credit for operational flexibility

What If Your Answers Point Both Directions?

Mixed results are common. Consider these approaches:

• Hybrid strategy: Use a term loan for the known capital investment plus a smaller line of credit for operational flexibility. The 24% of Canadian SMEs using both products report 34% higher satisfaction with their financing structure.
• Start conservative: Begin with the more structured option (usually the term loan) and add a line of credit after establishing a repayment track record with your lender.
• Seek professional guidance: BDC advisors provide free consultations, and your accountant can offer perspective based on your specific financials. The 62% of business owners who consult accountants before financing decisions report higher confidence in their choices.
• When genuinely uncertain: The line of credit’s flexibility typically creates less risk than committing to a fixed loan structure you might not need.

How to Qualify: Requirements for Each Option in Canada

Understanding eligibility criteria before applying saves time and protects your credit score from unnecessary hard inquiries.

Credit score expectations:

• 750+ personal credit: 94% approval rate for either product
• 680-749: 81% approval rate at traditional lenders
• 620-679: 62% approval at banks; 78% at alternative lenders
• Below 620: 34% approval at banks; 61% at alternative lenders

Time in business requirements:

• Most Big Five bank products: 2+ years operating history
• BDC and some bank products: 1+ year with strong financials
• Online lenders: 6-12 months minimum

Revenue requirements:

• Lines of credit: Often require $100,000+ annual revenue
• Term loans: Vary by amount requested; smaller loans have lower thresholds

Documentation typically required:

• 2 years of financial statements (income statement, balance sheet)
• 6-12 months of business bank statements
• Personal and business tax returns
• Business plan (for larger amounts or newer businesses)

Applicants with complete documentation packages achieve 87% approval rates versus 64% for incomplete applications.

Options If You Don’t Meet Traditional Requirements

Canada Small Business Financing Program (CSBFP): Government-backed loans through participating lenders with more flexible criteria. Maximum rate capped at Prime + 3% (currently 8.45%). Loans up to $1 million for equipment and leasehold improvements, $150,000 for working capital.

Business Development Bank of Canada (BDC): Crown corporation specifically designed to serve businesses that don’t fit traditional bank criteria. Higher rates than Big Five banks but more flexible on credit history and time in business.

Futurpreneur Canada: For entrepreneurs aged 18-39, providing up to $60,000 in financing plus mentorship. Particularly valuable for businesses under 2 years old.

Online and alternative lenders: Thinking Capital, OnDeck Canada, and Clearco offer faster approval with more flexible criteria but higher interest rates (12%-29.9% APR).

Micro-loan and community programs: Immigrant Access Fund, Community Futures Development Corporations, and regional development organizations serve specific populations and underserved markets.

Next Steps: How to Apply With Confidence

Transform your understanding into action with these concrete steps:

Step 1: Complete the 7-question framework above and write down your answer. Making it concrete reduces the second-guessing that keeps many business owners stuck.

Step 2: Check your personal credit score through Equifax Canada or TransUnion Canada before any lender pulls it. Knowing where you stand prevents surprises and helps you target appropriate lenders.

Step 3: Gather documentation before approaching lenders: financial statements, bank statements, tax returns. Being prepared signals professionalism and speeds approval by an average of 2.3 weeks.

Step 4: Get quotes from at least 3 lenders before committing. This is expected practice and gives you negotiating leverage. Include at least one traditional bank, BDC or CSBFP lender, and one alternative option.

Step 5: Ask every lender these 5 questions:

1. What is the total cost including all fees?
2. Are there prepayment penalties?
3. What is the annual review/renewal process (for lines of credit)?
4. What is the realistic timeline to funding?
5. What are the personal guarantee requirements?

Sources

Comprehensive Research Report: Business Line of Credit vs Term Loan in Canada

This research synthesizes data from official government sources (Statistics Canada, BDC, Innovation Canada), major Canadian financial institutions (Big Five banks), industry associations (CFIB, CBA), academic research, and third-party financial platforms. Data prioritizes recent findings to ensure currency and relevance for Canadian small business owners experiencing decision paralysis around financing options.

1. CORE STATISTICS & MARKET DATA

Canadian Small Business Financing Landscape

Market Size & Demand

• 1.19 million employer businesses in Canada as of December 2023, with 97.9% classified as small businesses (1-99 employees) [Innovation, Science and Economic Development Canada, Key Small Business Statistics 2024]
• Total outstanding business credit in Canada: $1.07 trillion as of Q2 2024, with small business loans comprising approximately $195 billion [Bank of Canada, Credit Conditions Survey, August 2024]
• 48% of SMEs sought external financing in 2022, up from 41% in 2020 [Statistics Canada, Survey on Financing and Growth of SMEs, 2023]
• Of businesses seeking financing, 79% requested debt financing (loans or lines of credit) rather than equity [Statistics Canada, SFGSME 2023]

Approval Rates by Product Type

• Overall SME financing approval rate: 80.1% for all debt financing requests [Statistics Canada, SFGSME 2023]
• Line of credit approval rate: 84% for requests to chartered banks [BDC, SME Financing Data Brief, 2023]
• Term loan approval rate: 76% for requests to chartered banks [BDC, SME Financing Data Brief, 2023]
• Government-backed loan (CSBFP) approval rate: 91% for complete applications [ISED, CSBFP Annual Report 2022-23]

Why This Matters for Decision Paralysis: The 8-percentage-point higher approval rate for lines of credit suggests lenders view them as lower risk – readers fearing rejection may find reassurance that the “flexible” option is also the “easier to get” option.

Current Interest Rates (As of January 2025)

Bank of Canada Policy Rate Context

• Current Bank of Canada overnight rate: 3.25% (following December 2024 cut) [Bank of Canada, January 2025]
• Prime rate at major Canadian banks: 5.45% [Big Five Banks, posted rates January 2025]
• Prime rate trajectory: decreased from 7.20% peak (July 2023) to current 5.45% [Bank of Canada historical data]

Business Line of Credit Rates

• Secured business line of credit: Prime + 0.5% to Prime + 3.0% (effective 5.95% – 8.45%) [RBC, TD, Scotiabank published rates, January 2025]
• Unsecured business line of credit: Prime + 2.0% to Prime + 7.0% (effective 7.45% – 12.45%) [Major bank rate sheets and broker compilations, 2024]
• BDC line of credit: Prime + 2.0% to Prime + 5.5% depending on risk assessment [BDC published rates, 2024]
• Online lender lines of credit (Thinking Capital, OnDeck): 12% – 24% APR [Lender websites and rate comparison platforms, January 2025]

Business Term Loan Rates

• Big Five bank term loans (secured): 6.5% – 9.5% fixed; Prime + 1.0% to Prime + 3.5% variable [Bank rate sheets, January 2025]
• Big Five bank term loans (unsecured): 8.5% – 14.5% fixed [Bank rate sheets and broker data, 2024]
• BDC term loans: 7.5% – 15.0% depending on risk profile and term length [BDC, 2024]
• CSBFP loans (through participating lenders): Prime + 3.0% maximum by regulation (currently 8.45% cap) [ISED, CSBFP Terms and Conditions, 2024]
• Online/alternative lenders: 9.9% – 29.9% APR [Clearco, OnDeck, Thinking Capital published rates, 2024]

Fee Structures

• Line of credit annual fees: $0 – $500 depending on limit and lender [Bank fee schedules, 2024]
• Line of credit standby/unused fees: 0.25% – 1.0% annually on undrawn amounts (not universal) [Commercial lending terms analysis, 2024]
• Term loan origination fees: 0% – 3% of loan amount [Industry standard compilation, 2024]
• CSBFP registration fee: 2% of loan amount (one-time, can be financed) [ISED, CSBFP Program Guide, 2024]
• Early repayment penalties: 0-3 months’ interest for fixed-rate term loans; typically none for lines of credit [Standard contract terms analysis, 2024]

2. PRODUCT COMPARISON DATA

Feature-by-Feature Comparison Matrix

[Compiled from bank product sheets, BDC documentation, and lender interviews, 2024]

Total Cost Comparison Scenarios

Scenario 1: $50,000 needed for 18 months, steady use

• Line of credit at Prime + 3% (8.45%): Interest cost = $6,337 if fully drawn entire period [Calculated using daily interest formula]
• Term loan at 9.5% fixed: Interest cost = $5,847 over 18-month amortization [Standard amortization calculation]
• Finding: Term loan saves $490 when funding need is predictable and fully utilized

Scenario 2: $50,000 limit needed, average utilization 60% for 18 months

• Line of credit at Prime + 3% (8.45%): Interest cost = $3,802 on average $30,000 balance [Calculated]
• Term loan at 9.5% fixed: Interest cost = $5,847 (still paying on full $50,000) [Calculated]
• Finding: Line of credit saves $2,045 when utilization is partial or variable

Scenario 3: $50,000 needed for 6 months, then repaid

• Line of credit at Prime + 3% (8.45%): Interest cost = $2,112 [Calculated]
• Term loan at 9.5% fixed, 18-month term, prepaid at 6 months: Interest cost = $2,850 + potential penalty [Calculated]
• Finding: Line of credit saves $738+ for short-term needs with early repayment

Why This Matters for Clear Differentiation: These concrete scenarios directly address the functional driver – readers can see exactly which product costs less in their specific situation rather than relying on generalizations.

3. BEHAVIORAL RESEARCH & USER INSIGHTS

Why Small Business Owners Struggle with This Decision

Survey Data on Financing Decision Challenges

• 67% of SME owners report feeling “overwhelmed” by financing options [CFIB, Small Business Financing Survey, 2023, n=3,847]
• 54% delayed seeking financing due to uncertainty about which product to choose [BDC, SME Decision-Making Study, 2023, n=1,200]
• Average time spent researching before applying: 23 hours over 4-6 weeks [BDC study, 2023]
• 41% of business owners who didn’t seek needed financing cited “didn’t know which option was right” as primary reason [Statistics Canada, SFGSME 2023]

Fear of Making the Wrong Choice

• 72% of SME owners worry about “getting locked into unfavorable terms” [CFIB Survey, 2023]
• 68% express concern about “paying more than necessary in interest/fees” [CFIB Survey, 2023]
• 58% fear that choosing the wrong product will “limit future financing options” [BDC Study, 2023]
• 49% report anxiety about personal guarantee requirements regardless of product type [CFIB Survey, 2023]

Information Sources and Trust Levels

• 78% consult bank/lender websites as primary information source [Statistics Canada, SFGSME 2023]
• 62% seek advice from accountants before financing decisions [CFIB Survey, 2023]
• 47% consult other business owners or peer networks [BDC Study, 2023]
• Only 23% use government resources (BDC, CSBFP information) despite availability [Statistics Canada, SFGSME 2023]
• Trust ranking: Accountants (81%), Bank advisors (64%), Online resources (52%), Government programs (71% among those aware) [CFIB Survey, 2023]

Why This Matters for Permission and Reassurance: The data showing that 54% delay financing decisions due to uncertainty validates that readers’ hesitation is normal – they’re not overthinking; they’re part of the majority seeking clarity before commitment.

Product Selection Patterns

Who Chooses Lines of Credit

• 43% of SMEs using debt financing have a line of credit [Statistics Canada, SFGSME 2023]
• Most common industries: Retail (51%), Wholesale (48%), Professional Services (46%) [Statistics Canada, SFGSME 2023]
• Primary stated reason for choosing LOC: “flexibility to draw only what I need” (67%) [BDC Study, 2023]
• Secondary reason: “lower cost when I don’t need full amount” (54%) [BDC Study, 2023]
• Average credit limit: $87,000; Average utilization: 47% [Canadian Bankers Association, SME Lending Report, 2023]

Who Chooses Term Loans

• 38% of SMEs using debt financing have a term loan [Statistics Canada, SFGSME 2023]
• Most common industries: Manufacturing (52%), Construction (49%), Transportation (47%) [Statistics Canada, SFGSME 2023]
• Primary stated reason for choosing term loan: “knew exactly what I needed for specific purchase” (71%) [BDC Study, 2023]
• Secondary reason: “wanted predictable monthly payments for budgeting” (63%) [BDC Study, 2023]
• Average loan amount: $142,000; Average term: 4.2 years [CBA, SME Lending Data, 2023]

Hybrid Usage Patterns

• 24% of SMEs have both a line of credit AND a term loan [Statistics Canada, SFGSME 2023]
• Most common hybrid pattern: Term loan for equipment/real estate + LOC for operations [BDC Study, 2023]
• Businesses with both products report 34% higher satisfaction with their financing structure [BDC Study, 2023]

Approval and Rejection Insights

Most Common Reasons for Financing Rejection

1. Insufficient business revenue/cash flow: 34% of rejections [Statistics Canada, SFGSME 2023]
2. Inadequate collateral/security: 28% of rejections [Statistics Canada, SFGSME 2023]
3. Poor personal credit history: 23% of rejections [Statistics Canada, SFGSME 2023]
4. Insufficient time in business: 19% of rejections [Statistics Canada, SFGSME 2023]
5. Incomplete documentation: 12% of rejections [Statistics Canada, SFGSME 2023]

Credit Score Impact on Approval

• Personal credit score 750+: 94% approval rate for either product [TransUnion Canada, Business Credit Report, 2023]
• Personal credit score 680-749: 81% approval rate [TransUnion Canada, 2023]
• Personal credit score 620-679: 62% approval rate at traditional lenders; 78% at alternative lenders [TransUnion/Industry data, 2023]
• Personal credit score below 620: 34% approval rate at traditional lenders; 61% at alternative lenders [TransUnion/Industry data, 2023]

Documentation Preparation Impact

• Applicants with complete documentation package: 87% approval rate [BDC internal data, 2023]
• Applicants with incomplete documentation: 64% approval rate [BDC internal data, 2023]
• Average time added by documentation requests: 2.3 weeks [Bank processing data, 2023]

4. LENDER-SPECIFIC DATA

Big Five Banks Comparison

Royal Bank of Canada (RBC)

• Business line of credit limits: $10,000 – $250,000 unsecured; up to $1M+ secured [RBC Business Banking, 2024]
• Rates: Prime + 1.5% to Prime + 5.5% depending on security and creditworthiness [RBC rate sheet, 2024]
• Term loan rates: 7.29% – 12.99% fixed; Prime + 1.0% to Prime + 4.0% variable [RBC rate sheet, 2024]
• Minimum time in business: 2 years for most products; 1 year for secured options [RBC eligibility criteria, 2024]
• Average approval time: 5-10 business days for pre-qualified; 2-4 weeks standard [RBC business banking, 2024]

TD Bank

• Business line of credit limits: $5,000 – $350,000 unsecured; higher with security [TD Business Banking, 2024]
• Rates: Prime + 2.0% to Prime + 6.0% for unsecured [TD rate sheet, 2024]
• Term loan rates: 7.49% – 13.49% fixed [TD rate sheet, 2024]
• Minimum time in business: 2 years [TD eligibility criteria, 2024]
• Notable feature: TD Business Solutions LOC combines checking account with credit line [TD product documentation, 2024]

Scotiabank

• Business line of credit limits: $10,000 – $500,000 [Scotiabank Business Banking, 2024]
• Rates: Prime + 1.75% to Prime + 5.5% [Scotiabank rate sheet, 2024]
• Term loan rates: 7.19% – 12.79% fixed [Scotiabank rate sheet, 2024]
• Minimum time in business: 2 years; 1 year for Scotia Momentum for Business [Scotiabank eligibility, 2024]

BMO Bank of Montreal

• Business line of credit limits: $5,000 – $250,000 unsecured [BMO Business Banking, 2024]
• Rates: Prime + 2.0% to Prime + 6.5% [BMO rate sheet, 2024]
• Term loan rates: 7.39% – 13.29% fixed [BMO rate sheet, 2024]
• Notable feature: BMO Smart Business Line of Credit with no annual fee under $100K [BMO product documentation, 2024]

CIBC

• Business line of credit limits: $10,000 – $300,000 unsecured [CIBC Business Banking,