Complete Guide to Requesting a Business Loan in Canada

Who this guide is for

If you’re a Canadian SME owner planning to launch, expand, or steady cash flow, this guide shows you exactly how to package your request so lenders say “yes” sooner. We’ll walk through lender criteria, product fit, documentation, timelines, and the specific moves that reduce friction and improve pricing. When you’re ready, explore Mehmi’s full Business Loans suite or estimate payments with our calculator.

How lenders decide: the 5-lens underwriting view

Cash flow: Can your business comfortably cover new payments? Lenders look at bank statements for deposits, seasonality, NSFs, and a rough Debt Service Coverage Ratio (DSCR).
Credit: Personal and business credit indicate payment history and utilization trends.
Collateral: Some products are secured by assets (equipment, AR, inventory); others are unsecured and rely more on cash flow/credit.
Character: Consistency matters—accurate applications, transparent explanations, and quick document turnarounds build trust.
Conditions: Industry risk, equipment type, economic context, and contract pipelines.

If any one lens is weaker (e.g., limited time in business), strengthen the others (e.g., bigger down payment, collateral, or tighter documentation).

Choose the right product before you apply

Picking the right tool speeds approvals and prevents painful re-submits. Start here:

If your need is equipment-specific (trucks, machinery, ovens, imaging), you may get better economics using Equipment Financing such as Equipment Loans or Equipment Leases.

The approval-ready document checklist

Pull these before you click submit:

• Business snapshot: Legal name, incorporation docs, ownership %, business address, HST/QST where relevant.
  
  
• Banking: Last 3–6 months of business bank statements (all operating accounts).
  
  
• Financials: Most recent year-end statements and interim P&L/BS, if available.
  
  
• Revenue evidence: AR aging, sales summaries, contracts/POs (if project-based).
  
  
• Debt schedule: Current loans/leases, balances, monthly payments.
  
  
• Use of funds: One clear paragraph stating how the funds drive ROI or risk reduction.
  
  
• Collateral (if secured): Asset list with serials/values; insurance proof if applicable.
  
  
• IDs & void cheque: Standard KYC and funding setup.
  
  

Different industries may need specifics—see Transportation & Trucking, Construction & Contractors, Manufacturing & Wholesale, Hospitality & Food Service, and Medical, Dental & Wellness.

How to frame your request so underwriters say “yes”

Lead with clarity. Open your application with a short, factual summary: business model, time in business, monthly revenue, requested amount, term, and a one-line ROI/use of funds.

Match product to purpose. Working capital for inventory? Use a Line of Credit, not a long-amortizing term loan. Need to smooth AR timing? Consider Invoice Freight Factoring.

Demonstrate repayment path. Point to historical cash flow or signed POs/contracts and show that the new payment fits comfortably (use the calculator).

Explain anomalies upfront. Short dips, NSFs, or a bad month happen—disclose them and attach a brief explanation.

Offer strength if you have it. Collateral (for a Secured Loan), a modest down payment, or a shorter term can offset limited time in business.

Timeline: what to expect after you apply

• Same day: Discovery call, quick pre-fit, document checklist.
  
  
• 24–48 hours: Preliminary approval, conditions list, and pricing guidance for straightforward files.
  
  
• 2–7 days: Final approvals and funding for most SME cases, depending on product and completeness.
  
  
• Longer cases: Multi-collateral or complex refinances may take more time due to valuations and registrations.
  
  

Well-organized packages fund faster. If timing is critical, say so in the opening paragraph and keep your phone/email responsive.

Common reasons deals stall (and how to avoid them)

• Product mismatch: Requesting a long term loan for short-term inventory. Fix: choose Working Capital or a Line of Credit.
  
  
• Incomplete statements: Missing months or mixed personal/business accounts. Fix: export PDFs for all accounts, all months.
  
  
• Unclear use of funds: “General purposes” gets slower treatment. Fix: one clear ROI statement.
  
  
• Tax arrears undisclosed: Surfaces mid-underwrite and pauses files. Fix: disclose early with a plan.
  
  
• Vendor info gaps (equipment cases): Missing quote/serials. Fix: attach full quote; if buying from Mehmi, we can supply the invoice and serials from our inventory.
  
  

Rate vs. total cost: what actually matters

Chasing the lowest rate can backfire if it costs you weeks and missed contracts. Model monthly affordability and total cost of capital across 2–3 structures in the calculator, then pick the one that keeps operations humming and margins intact.

Case study: Turning a cash-flow pinch into growth

A GTA wholesaler needed $150,000 ahead of a seasonal spike. Banks were slow; a competitor threatened their PO. Mehmi reviewed 6 months of statements, confirmed recurring revenue, and recommended a Working Capital Loan blended with a small Line of Credit for reorders.
Result: Approved within 48 hours, funded shortly after. They filled the PO, negotiated early-pay discounts with suppliers, and locked in two new accounts the following quarter. Three months later, they refinanced to a Term Loan to lower the blended cost.

Request template you can adapt

Subject: – Request –

Opening summary (3–4 lines):

• Business: what you sell, to whom, where.
  
  
• Time in business and average monthly revenue.
  
  
• Request: amount, product (e.g., working capital loan), target term.
  
  
• Use of funds and expected ROI/cash-flow benefit.
  
  

Attachments: 3–6 months bank statements, recent financials (if available), AR/AP (if relevant), debt schedule, IDs, void cheque, vendor quotes (if equipment).
Next step ask: “Please confirm the best structure and any additional docs required.”

FAQ

What credit score do I need for a business loan?
There’s no single cutoff. Stronger personal credit helps—especially for Unsecured Loans—but healthy cash flow and collateral can offset a thinner score.

How fast can I get funded?
Simple files often see approvals within 24–48 hours and funding shortly after, especially for Working Capital Loans, Lines of Credit, or Invoice Freight Factoring.

What’s the difference between a line of credit and a term loan?
A line is reusable—you draw, repay, and draw again; interest applies only to the balance. A term loan is a lump sum with fixed payments over a set period. See Line of Credit and Term Loan.

Can I get financing as a startup?
Yes, but structure matters. Consider modest amounts, shorter terms, collateral where possible, or equipment-tied options via Equipment Financing.

Will a secured loan always be cheaper?
Usually—collateral reduces risk. Compare options here: Secured Loan vs Unsecured Loan.

Do you finance equipment as well?
Yes. Mehmi provides equipment loans and leases, and we also sell assets directly. Browse our inventory, or learn about Equipment Loans and Equipment Leases.

Ready when you are

If you want a second set of eyes on your package—or you need to move quickly—our team can help you pick the right structure, prep the docs, and remove bottlenecks.

Feel free to contact our credit analysts via Contact Us, or run scenarios in the calculator before you apply.
Learn more About Us and the Industries we serve.

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