Skip links
Couple going over their loan application.

Where to get small business loans in BC

Starting and funding a small business in BC can require a substantial amount of money, especially since the cost of operations can accumulate quickly. To meet business needs, small business owners have a few options to get funding.

What are small business loans?

Small businesses are establishments that have under 100 paid employees but do not include self-employed entrepreneurs. They are responsible for over 10 million jobs in Canada. Given their importance, lenders provide financing options for small business owners to start and scale their operations.  

A small business loan is a lump sum payment to a business owner to use for their business activities. The name they have dictates their purpose, so applying specifically for a small business loan means you own a small business and intend to use the money towards business expenses.  

Traditional sources of financing like the Business Development Bank of Canada (BDC) can offer loans over up to $100,000, while unsecured personal loans can only provide up to $50,000. Business loans can have higher values because of the cost to start and operate a business, but the value of the collateral you have and the amount you ask for influences the amount.

What are small business loans for?

Whether you’re starting a business or you require additional funds for your current operations, small business loans can provide the money you need. The following are just some of the few ways you can use a loan for a small business.  

  • Start-up costs—you may need funding for lease payments or to buy a space for your business.  
  • Working capital—the money you need for the business to cover its operational costs.  
  • Equipment and inventory—whatever physical assets your business needs to run. It could be like a cash register or something specific, like an espresso machine for a cafe.  
  • Marketing and advertising—creating marketing campaigns, building a website, and other methods to attract people to your service is an essential part of a business. 
  • Wages & Salaries—whether you’re hiring your first employee or expanding your workforce, business loans can help you provide wages.

Ways to fund your small business in BC

You can financially support your small business in multiple ways. The following are just a few common examples. Having a mix of different capital sources will help you maintain a healthy business.  

Personal savings 

Using your own money for your business is one of the most obvious options. You don’t need to get approved to use the money, and there are no additional interest payments.  

The best way your savings can contribute to your business financing is as a supplemental source of funding. Unless you’ve saved tens of thousands of dollars in addition to the savings allocated for yourself, saving money that’s enough to start or scale a business could take a long time.

Government funding programs 

A common source of financial support is from the government, and the federal and provincial governments offer unique programs. The federal government offers the Canada Small Business Financing Program (CSBFP). In BC, you can find programs like British Columbia’s Indigenous Small Business Resources or the Pacific Economic Development Canada (PacifiCan). 

While government programs are reliable in providing funding, they have strict requirements, which include the eligibility of your business. 

Loans from a financial institution 

Getting approved for a business loan from traditional lenders can have the most demanding requirements. You need to have a strong credit score and present your annual revenue and time in business. Sources of funding like the BDC require at least two years of active business and revenue generation.  

The loan amount and interest the lender offers will also depend on your personal credit history. Loans from traditional financial institutions require a strong business plan and credit rating.

Home equity loan 

A unique form of financially supporting your new business is the potential from your home equity. To calculate it, you subtract your outstanding mortgage balance from the appraised value of your home. The more equity you have, the more you can access as a loan. 

Home equity loans are flexible and potentially high value, so you can use them for business start-up expenses and working capital requirements. The approval criteria are also more flexible compared to traditional lenders, so the main eligibility factor is having the minimum amount of home equity rather than your credit score or business plan.

Getting a home equity loan for your business 

Alpine Credits has been helping Canadians access their home equity for over 50 years and continues to help entrepreneurs bring their ideas to life. If you have at least 25% equity in your home, you’re eligible for a loan up to 75% of your home value.  

Applying for a home equity loan can be done in three simple steps. 

  1. Apply online—the application will ask you for some personal details and the estimated value of the loan. Alpine Credits also provides appraisal service to help you determine your home equity. 
  2. Get approved—the application process moves more quickly with Alpine Credits, so you’ll hear back about your results within 24 hours if you have the minimum amount of equity. 
  3. Receive your home equity loan—within another few days of getting approved, the loan will be directly deposited into your bank account. You can use it right away for the business expenses you’re planning.  

If you have more questions, contact a Financial Solutions Specialist at Alpine Credits. The call is obligation-free, and the specialists can answer all your questions regarding home equity loans and the application. Invest in your business plans today with a home equity loan.  

Apply now

Frequently asked questions

The interest varies when it comes to traditional lenders. The final rate offer depends on your personal and business financial details and the current prime rate.  

It depends on the kind of business you’re starting. You may need from $50,000 to $100,000 to start, depending on your required start-up costs and working capital. Be sure to calculate all your business needs so that you have enough funding for at least a year.

Business loans can affect personal credit scores in specific circumstances. Credit inquiry from taking a personal loan for your business will drop your score by a few points, but it can improve as you repay your financial obligations.

Homeowners who have built some equity in their home and want to start a business have one of the best funding sources in their property. With a home equity loan, they can get more than enough funding with relatively low interest rates.