Bad credit makes getting funded through a bank almost impossible. They look at your score, see a number they don’t like, and that’s the end of it. Doesn’t matter if your business is doing $50,000 a month in sales. Doesn’t matter if you’ve been profitable for years. One rough patch on your credit file and banks won’t touch you. If you’re looking for business funding with bad credit in Canada there are lenders that don’t operate the same way banks do.
Why Bad Credit Stops You at a Bank
Banks use your credit score as a filter. Below their threshold and your application doesn’t move forward. They don’t care why your credit dropped. Divorce, medical bills, a slow year, a business that struggled during covid. None of that changes the number on the screen.
On top of that banks want collateral, a personal guarantee, years of financial documents. So even if your credit was fine you might still get declined for other reasons. We wrote about all the reasons banks say no here.
How to Get Business Funding with Bad Credit in Canada
Alternative lenders focus on different things. At Canada Capital we look at your sales. How much revenue your business is bringing in, how consistent it is. A business doing $40,000 a month with a credit score of 520 is still a business we’d fund.
We offer advances on your future receivables. Fixed cost, daily or weekly repayment, terms from a few months up to two years. No collateral and no personal guarantee. If you want to understand more about how that works we break it down in our post on how does revenue based financing work.
What Credit Score Do You Need
We don’t have a hard cutoff. Credit is part of what we look at but it’s not what makes or breaks the deal. We’ve funded business owners that banks wouldn’t even sit down with because of their credit.
If your credit is rough and your sales are also low that’s a harder conversation. The revenue needs to be consistent. We’re not ignoring credit entirely but a strong month over month sales history goes a long way even when the credit side isn’t great.
Does Bad Credit Cost You More
Yeah. Lower credit means more risk for the lender and the cost goes up. Someone with good credit and strong sales will get better terms than someone with bad credit and the same sales volume. That’s not specific to us it’s how alternative lending works in general.
We show you the full cost before anything is signed. Total amount, payment schedule, term length. You can decide from there whether it works for your business.
Who Qualifies for Business Funding with Bad Credit
Any business in Canada with consistent revenue. Restaurants, retail, trucking, contractors, salons, e-commerce, professional services.
We’ve funded a restaurant owner who had a bankruptcy on file from four years ago but was doing $60,000 a month in sales. We’ve funded a contractor whose credit tanked after a divorce but had steady jobs lined up for the next six months. The credit history didn’t look good on paper but the businesses were doing well and that’s what we based the decision on.
Your Options
We offer revenue based financing, unsecured business loans, business lines of credit, and small business capital. If you’re not sure which one fits read our post on what is revenue based lending or apply here and our team will go over everything with you.