A lot of business owners don’t even bother applying for funding because they think they need to put something up. A house, equipment, a vehicle. Banks usually do ask for that. If you stop making payments they want to know they can recover the money somehow so they ask for property or equipment or a personal guarantee. A lot of small business owners either don’t have those things or they do but they’re not willing to risk them over a business loan. But not every lender works that way and if you’re looking for small business funding without collateral there are options.
What Happens When You Go to a Bank
You book an appointment. You bring in your financials, tax returns, business plan, maybe a few years worth of bank statements. They review everything which takes a couple weeks minimum. Then they come back and ask for more. Maybe they want to see your lease agreement or get an appraisal on your equipment. A few more weeks go by. Then they either approve you with conditions like putting up your property as security or they decline you. The whole thing can take over a month and you might walk away with nothing.
We talk to business owners who went through exactly this. Spent weeks going back and forth and ended up right where they started.
How Small Business Funding Without Collateral Works
Alternative lenders like Canada Capital don’t follow that same process. We fund businesses based on their sales. You get an advance on your future receivables. There’s a fixed cost attached and you pay it back daily or weekly over a set term. Could be a few months, could be up to two years depending on the deal. We go into more detail about the full process in our post on how to get small business capital in Canada.
To get started we need recent sales, bank statements, and some basic financial info. If you’re not sure whether you need a lump sum or ongoing access to funds we cover the differences in our business line of credit vs business loan post. On bigger deals there’s more involved but the starting point is a short application and some documents. We can usually get back to you within 24 hours. We’ve funded businesses the same day they applied.
Most people go to their bank first because that’s what you do. When the bank says no or wants your property as security you figure that’s just how funding works. It’s not.
Who Qualifies for Small Business Funding Without Collateral
Pretty much any small business in Canada that has consistent revenue. Restaurants, retail, contractors, trucking, salons, e-commerce. We work with most industries.
We’ve worked with business owners who were six months into their first year and couldn’t get a bank to even look at them. We’ve also worked with businesses that have been running for ten plus years but had a rough patch on their credit and got declined everywhere else. Both types can qualify as long as the sales are there. More info on what we offer on our small business capital page.
Credit score comes up a lot when people ask about this. We look at it but it’s not the main thing. Banks weigh it heavily but we’re more focused on your current sales. If your business is performing well and your credit is rough you can still qualify.
What Does Small Business Funding Without Collateral Cost
No collateral means the lender is taking on more risk so the pricing is higher than a secured bank loan. That’s how it works across the industry not just with us.
The cost is a fixed amount agreed on before you sign. It’s not an interest rate that compounds over time like a bank loan. You know the total number upfront. Payments come out daily or weekly depending on how the deal is structured. Shorter term means higher payments but you’re done faster. Longer term means smaller payments spread out over more time. Our team goes over all of this with you so you see exactly what the cost is and what repayment looks like before you commit to anything. If you want to see what the numbers would look like for your business apply here.