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Small Businesses Can Benefit from These Types of Loans

July 4, 2023

Freepik Drazen Zigic - Small Businesses Can Benefit from These Types of Loans

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Small businesses form the backbone of the Canadian economy. They boost local industry, drive innovation, and create jobs. In fact, businesses with 1 to 99 employees comprised 98.0% of all employer businesses in the country in 2022, according to Statistics Canada.

Expanding a small business, taking advantage of seasonal opportunities, or meeting costs in an unpredictable economy can require significant capital. Many companies try to utilize small business loans to finance current or future business activity.

From traditional bank loans to alternative lenders, there are several options available to entrepreneurs looking to secure financing:

Finding the Right Loan

Navigating the world of small business loans can be complex and intimidating. That’s why small businesses can benefit from using; a free and intelligent loans platform designed to make it easier for small businesses to navigate through funding options and secure the right financing.

In a nutshell, is a sophisticated software company that leverages artificial intelligence (AI) and machine learning (ML) to help applicants match with the best loan options and certified lenders. The application process is uber easy and secure. guides you through the entire loan application process. Once you share some information about your business, the platform matches you with its top certified lenders for the funding your small business needs. Businesses are also free to get support from their business partners, financial advisors, or accountants during the application process. also makes it easy to complete your online loan application for multiple lenders by connecting to your online banking and accounting data.

Different Types of Small Business Loans

There are several types of small business loans available today, including term loans, merchant cash advances, and others. Each type of loan has its unique features and benefits.

1. Term Loans

Traditional Term Loans are the most common type of loans. Small businesses usually use them for specific purchases or investments. Term loans have a fixed repayment schedule. Their interest rates can either be fixed or variable.

2. Merchant Cash Advances

A merchant cash advance (MCA) is a type of business loan where a lender provides a lump sum payment in exchange for a portion of the business’s future sales. The loan repayment is made through automatic payments from the business’s bank account until the loan is paid in full.

MCAs are suitable options for businesses with good cash flow but don’t qualify for conventional loans and need fast and flexible funding options.

3. Equipment Loans

Small businesses needing expensive equipment such as machinery should consider equipment loans. There are different types of equipment loans. Lenders offer a lump sum of money to purchase equipment in a conventional equipment loan. The borrower repays the loan with interest over a fixed term.

Alternatively, the borrower can lease the equipment. Here, the lender purchases the equipment and leases it to the borrower. At the end of the term, the small business can purchase or return the equipment.

4. Invoice Factoring

Invoice factoring, also known as invoice financing or accounts receivable financing, is a fast and flexible option for small businesses. Companies can leverage their unpaid invoices to access working capital at a cost.

5. Line of Credit

A line of credit allows small businesses to borrow money up to a certain limit whenever needed. It’s a flexible option because small businesses only pay interest on the amount they borrow. They can also borrow and repay as needed.

6. SRED Loan Program

The SRED loan program is a form of cash advance. It’s available to Canadian businesses that have a good business plan and have engaged in successful R&D activities. The loan program can offer payment in installments or lump sums with flexible repayment terms, depending on the R&D project.

See:  Why Small Businesses Invest in Stocks

Small business loans can be a valuable resource for entrepreneurs, offering the financial support required to start, grow, or sustain a business. That’s why it’s critical for small businesses to choose a loan that’s suited to their needs and financial situation. Working with an advanced loans platform can help small businesses match with the ideal financing options.

NCFA Jan 2018 resize - Small Businesses Can Benefit from These Types of LoansThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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