How to Get Working Capital Without a Bank Loan in Canada (2026 Guide)

Based on 2022 statistics, about 15% of Canadian businesses applied for a line of credit or a new loan; in 2025, this figure is likely higher. Unfortunately, not everyone qualifies for traditional bank working capital. If this is the case with your business, you can luckily turn to alternative financing. Alternative financing includes merchant cash advances (like those we offer at Bizfund), invoice financing, equipment financing, and online business loans. 

However, just because alternative financing is available, it doesn’t necessarily mean you’ll know how to secure it for your business. At Bizfund, we understand this, which is why we are sharing how to get working capital without a bank loan by discussing your options. Armed with this information, you’ll be a step closer to growing your business. 

Why Working Capital Matters 

Before we look at the types of cash-flow solutions you can explore through alternative financing, it’s a good idea to know why working capital matters. 

To put it simply, working capital is crucial for Canadian businesses because it ensures companies like yours have sufficient short-term liquidity to manage daily operations and bridge cash-flow gaps. It’s also important because having sufficient liquidity enables you to seize better growth opportunities when they arise and to manage financial risk more effectively. 

And the harsh reality is that even profitable Canadian companies can fail if they lack sufficient working capital. We know this might be a hard truth to accept, but it’s better to know the realities now than to try to navigate problems surrounding liquidity in the future when you don’t have it.

The Five Reasons

With keeping why working capital matters in mind, below are a few of the exact reasons it’s important always to have liquidity when doing business in Canada:  

1. You can continue operations: When you have enough working capital, your business can cover your day-to-day expenses, including supplier payments, payroll, and utilities on time. This will help you maintain positive relationships with vendors and employees.
2. Let’s you bridge cash-flow gaps: As with businesses in other countries, Canadians also face timing mismatches where expenses are due before revenue is collected. But if you have substantial working capital, you can let it act as a buffer to cover this gap.
3. Ensures you can manage seasonal fluctuations: Seasonal fluctuations are a common occurrence for specific industries like agriculture and retail, meaning many Canadian businesses experience seasonal swings in demand and revenue. If your company has working capital, you’ll have access to funds that can help you easily cover overheads during slower months and scale up during peak seasons.
4. Helps mitigate financial risk: Unexpected events can occur at any time, leaving your business floundering if you don’t have working capital to act as a safety net. With working capital on hand, you can more easily navigate economic downturns, late-paying customers, supply chain disruptions, or equipment failures.
5. Promotes growth and investment: With working capital, you can reinvest in growth initiatives such as launching new marketing campaigns, hiring additional staff, or upgrading equipment.

Alternative Financing Options 

In 2026, more lenders are expected to place greater emphasis on sales activity, cash-flow, and business performance rather than on heavy collateral. This is a good thing if you’re considering alternative financing, especially for newer companies, entrepreneurs, and seasonal businesses with limited credit history. If you fall into these categories or are a small business, the following alternative financing options deserve to be on your radar: 

Merchant Cash Advances (MCAs)

With merchant cash advances, your approval is based on your monthly or daily revenue rather than collateral or business credit scores. This makes them a good alternative financing option for businesses in the hospitality, retail, food service, or e-commerce industries. 

With merchant cash advances, funding can be approved within 24 to 48 hours, and depending on the provider, you may have access to between $10,000 and $300,000. You can also use the funds you receive as you please, as there are often no restrictions on how you spend capital.

Online Business Loans

Many different fintech lenders in Canada offer companies short-term working capital loans. If you’re looking to access working capital without a bank loan, this is a good option. This alternative financing option is usually more convenient because you can apply online, and lenders often approve applications quickly. 

However, you will need to provide the same paperwork you would if you applied to a bank. For example, you will need to show bank statements, revenue patterns, cash-flow stability, and time in business. You also need to note that these loans provide shorter repayment terms than banks, and you could pay far more in interest. 

Invoice Financing (Accounts Receivable Financing)

If you own a company that invoices clients, such as a construction firm, a B2B service provider, or a logistics operator, you could explore invoice financing. This type of alternative business funding is also known as accounts receivable financing. You can use this funding to pay unpaid invoices, freeing up cash faster than usual. 

With invoice financing, a lender advances a portion of the invoice value upfront and releases the remainder, minus any fees, once the invoice is paid. This could be a tremendous help with supplies, payroll, and ongoing project costs, as you won’t need to wait 30 to 90 days for customer payments. 

Equipment Financing and Sale-Leasebacks

If you need equipment and want to secure working capital without a bank loan, you could explore equipment financing and sale-leasebacks. Should you go the sale-leaseback route, you’ll lease existing equipment from a lender who will purchase it for you. 

Often, businesses that do this unlock cash tied up in assets while still using the equipment. If you choose the equipment financing route, you’ll receive a capital loan from an alternative funder. However, with an equipment loan, the funds can be used only for the equipment your business needs. 

Steps to Secure Funding 

Below are a few of the steps you’ll likely have to take to secure working capital without a bank loan in Canada: 

1. Gather your financials: It doesn’t matter what type of funding you’re trying to secure; lenders are going to want to see the big financial picture. This means you need to gather your financial documents, including updated bank statements, proof of revenue, and current financial projections, to strengthen your application. They also show lenders that your business is stable, and in some instances, it can speed up approval.
2. Determine how much working capital you need. Another first step is to calculate how much you need to borrow and what you need to fund. For example, do you need financing for payroll and new staff hires, or for equipment or expansion? Knowing the answer can help you determine the sum and prevent over-borrowing.
3. Compare lenders and terms: Since you’re pursuing alternative funding, you need to compare lenders and their terms. Alternative lenders offer differing rates, fees, contract lengths, funding limits, and repayment frequency. These differences can be considerable, so you need to compare to find the best match for your financial goals and cash-flow cycle.
4. Find the best repayment structure: Different working capital financing solutions offer varying repayment terms. For example, MCAs use a revenue-based repayment structure, whereas invoice financing uses the invoice value. You need to determine which structure best fits your business’s cash cycle to protect your cash-flow.
5. Apply and secure funding: The final step is to apply. Fortunately, most alternative financing solutions provide fast approval times, so as long as you meet the eligibility and requirements, you should have access to working capital within a few hours or days.

Tools and Resources

If you want to secure working capital without a bank loan, consider the tools and resources we discuss below. Each should help you take a step closer to finding the business funding you need to keep building your dreams: 

• CRA tools for refund and credit forecasting: HST and GST estimators, tax-credit tools, and payroll calculators can help you predict incoming refunds and remittances. They also let you show lenders that your Canadian company has reliable cash-flow.
• Innovation Canada’s Business Benefits Finder: With this tool, you can locate grants, tax incentives, and wage supports that can help you reduce operating costs.
• Accounting platforms (QuickBooks, Wave, FreshBooks): With accounting platforms like Wave, FreshBooks, and QuickBooks, you can balance sheets, organize financial statements, and create cash-flow summaries. Many non-bank lenders require this information to base their approval of your request for funding. Having all of this on hand makes things easier and faster.

In addition to the above, you can also use business credit score check services like TransUnion and Equifax to learn more about your credit profile and what your business looks like to lenders. This can help you determine the likelihood of approvals and where to apply. 

Key Takeaways for Securing Working Capital without a Bank Loan

Alternative funding is highly beneficial, given that many Canadian businesses cannot secure financing from traditional banks. We hope the information we shared in today’s blog helps you secure working capital without a bank loan in Canada in 2026. 

Given you’re spoilt for choice with alternative financing options, it’s important to keep your business needs in mind and avoid borrowing more than you need. It’s also essential to match your financing needs with the right loan type. 

If you’re considering a merchant cash advance, you can apply with Bizfund. We offer MCAs to help you achieve your business goals, with funding you can use for working capital. Contact us here to learn more about the process.