Most Ontario businesses borrow from one of the Big Five banks or a large credit union, with BDC as the federal lender that takes on more risk and longer terms. Start with the lender that already holds your operating account, then use BDC, the Canada Small Business Financing Program and the regional development funds to fill the gaps a bank will not cover alone.
The banks that do most of the lending
Ontario is home base for Canada's largest banks. RBC, TD, Scotiabank, BMO and CIBC are all headquartered in Toronto, and between them they carry most of the province's small and mid-sized business credit. National Bank has a growing commercial presence in Ontario, and Desjardins serves francophone communities in eastern and northern Ontario. HSBC's Canadian business moved to RBC in 2024, so former HSBC clients are now RBC clients.
Big banks are strongest when you have two or more years of financial statements, steady cash flow, real collateral and a personal guarantee to offer. They price well for that profile and can bundle an operating line, term loan, equipment financing and treasury services in one relationship. They are slower and stricter with startups, thin files and businesses whose value is mostly intangible.
The large banks also deliver the Canada Small Business Financing Program. Under it, the federal government shares the lender's loss on qualifying loans, which lets a bank say yes to a deal it would otherwise decline. Businesses with gross annual revenue of $10 million or less qualify. Term loans run up to $1 million, of which up to $500,000 can go to equipment and leasehold improvements, and lines of credit run up to $150,000. You apply at the bank or credit union, not with the government. See Canada small business loans for how it works.
Credit unions and BDC
Ontario has a deep credit union system with real commercial lending teams. Meridian is the province's largest credit union and lends across southern Ontario, from small business loans to agricultural and commercial real estate deals. Libro serves southwestern Ontario, Alterna is strong in Ottawa and the Toronto area, and DUCA serves the Greater Toronto Area. Smaller community credit unions cover many towns where the big banks have thinned out their branches.
Credit unions often make decisions closer to home, know local real estate and will look harder at a business with a short track record if the owner is a member in good standing. Most also deliver the Canada Small Business Financing Program. Browse credit unions on the register to see who is active near you.
BDC, the Business Development Bank of Canada, is a federal Crown corporation with offices across Ontario. It is a complementary lender: it is designed to take positions banks pass on. BDC is known for longer amortizations, flexible repayment, financing for intangible costs such as software, marketing and working capital, and lending to businesses buying out a partner or acquiring another company. Many Ontario owners use a bank for the operating line and BDC for the growth or acquisition loan.
Online lenders, factors and specialty finance
Ontario, and Toronto in particular, is the centre of Canada's alternative business lending market. Online lenders such as Journey Capital and Merchant Growth make fast, smaller term loans and merchant cash advances where the decision rests mostly on bank account data and sales history. FundThrough, based in Toronto, buys and advances against unpaid invoices for businesses that sell on terms.
These lenders move in days rather than weeks and accept profiles a bank will not, but the cost is higher and terms are shorter. They suit short gaps: a large order, a seasonal ramp or a slow paying customer. They are a poor fit for long term assets. Equipment lessors, both bank owned and independent, cover trucks, machinery and technology across the province. See online lenders and factors for who works in this space.
| Lender type | Best fit in Ontario | Typical speed | What they look for |
|---|---|---|---|
| Big Five bank | Established businesses, real estate, full banking relationship | Weeks | Two or more years of statements, collateral, guarantee |
| Credit union | Local businesses, members, farms, community real estate | Weeks | Local ties, cash flow, collateral |
| BDC | Growth, acquisitions, intangible costs, longer terms | Weeks | Viable plan, management strength, cash flow |
| Online lender | Short term working capital | Days | Bank deposits, monthly sales |
| Factor | Businesses selling to other businesses on terms | Days | Creditworthy customers, clean invoices |
Provincial and federal programs in Ontario
Ontario does not run a general small business loan program the way some US states do. Instead it funds growth projects through regional programs, and the federal government adds its own.
The Ontario Regional Development Program includes the Eastern Ontario Development Fund and the Southwestern Ontario Development Fund. Both offer loans for business expansion projects, interest free during the project period, with part of the loan forgivable when investment and job targets are met. They are built for established companies making a sizeable investment and committing to new jobs, not for working capital. In the north, the Northern Ontario Heritage Fund Corporation runs the Invest North program for businesses growing or locating in Northern Ontario.
On the federal side, FedDev Ontario serves southern Ontario and FedNor serves Northern Ontario. Both fund larger growth projects and support a network of Community Futures Development Corporations, which make smaller loans to businesses in rural and smaller communities that banks often overlook. For owners aged 18 to 39 starting out, Futurpreneur pairs a startup loan with a mentor, and BDC can lend alongside it. See startup funding for more.
Program funding is usually a partner to a bank or credit union loan, not a replacement for one. Your lender will often help you package both.
How to choose among them
Match the lender to the job the money has to do.
- Buying real estate or major equipment. Start with your bank or credit union, and ask whether the Canada Small Business Financing Program can strengthen the deal. If the bank wants more down payment than you have, ask BDC to share the financing.
- Growing or acquiring. BDC and the commercial teams at the Big Five are the main players. For a large expansion with new hiring, check whether the Eastern or Southwestern Ontario Development Fund or Invest North applies to your region.
- Covering a short cash gap. A bank line of credit is cheapest if you qualify. If not, factoring or an online lender bridges the gap, but keep the term short.
- Starting out. Futurpreneur, a Community Futures office and a credit union that knows your community are the realistic first stops. Big banks rarely lend to a business with no history without government backing.
- Rural or northern location. Community Futures, FedNor and local credit unions will often know your market better than a downtown Toronto lender.
Whatever the loan, prepare two years of financial statements, recent business bank statements, a current balance sheet, your personal net worth statement and a clear one page use of funds. Lenders in Ontario decide faster when the file arrives complete. Browse Ontario lenders on the register or compare banks side by side before you apply.
Need help choosing a lender? Sign up through BusinessLoanBroker.ai to share your financing needs and get help with your next steps. You can also explore financing guides and tools before you apply.