Businesses often turn to SBA loans for various reasons. For example, those who want lower or more competitive interest rates, and those who need flexible use of funds, allowing them to choose how their loan is spent. Additionally, many companies opt for SBA loans because the lenders offering them can provide expert advice and valuable resources.
If you operate a business and are considering SBA loans in Canada for these reasons and more, you’ve come to the right place. Today, our team at Bizfund shares what you need to know about SBA loans. This includes what they are and if they are available in Canada. We’ve also provided a few alternative options for small business loans in 2026 that you may want to consider.
What Are SBA Loans?
An SBA loan is a special business loan. It is partially backed by the US Small Business Administration (SBA) through approved lenders. These loans are designed to help small companies that aren’t eligible for traditional loans or financing.
For many US-based businesses, these loans help them get financing with more favourable terms. For instance, lower down payments and longer repayment terms. Not to mention that the SBA’s guarantee also reduces lenders’ risk. This makes lenders far more likely to lend to a small business.
Are SBA Loans Available in Canada?
Unfortunately, SBA loans are not available in Canada because they fall under American-backed financing. However, Canada has a similar government-backed program, the Canada Small Business Financing Program (CSBFP).
This government financing program works with financial institutions to help small Canadian businesses access financing. Usually, this financing is used to modernize operations, expand, purchase equipment, or hire more employees. The CSBFP also offers lines of credit and term loans. These help cover various costs, including working capital and asset purchases.
However, it’s essential to know that if you want to apply for a CSBFP loan, you cannot apply directly to the government. Also, not everyone is eligible. Instead, you must apply through a credit union or bank. It is also the lender who will handle the underwriting.
It’s also worth knowing that the government will guarantee up to 85% of the loan. Often, this significantly tips the scales in your favour if your credit profile or collateral isn’t quite ready for loan approvals.
Top Business Funding Alternatives to SBA Loans in 2026
Now you know SBA loans in Canada are not a thing. If you don’t want to go with the nation’s option for government-backed financing or are ineligible, you’re not out of options.
Below, we share a few of the best business funding alternatives to SBA loans in 2026. You may want to consider them before you attempt applying traditionally:
Business Development Bank of Canada Loans (BDC)
One of the best alternatives to SBA-style loan options in Canada is the Business Development Bank of Canada (BDC) loan program. This loan type is best suited for small and medium-sized businesses that don’t qualify for traditional bank loans.
Instead of relying solely on business credit scores and collateral, this bank focuses on growth potential, management strength, and long-term stability. Because of this, businesses like yours have a realistic path to financing when you’re not quite ready for bank lending.
With the BDC, you could qualify for equipment financing, term loans, working capital loans, or real estate financing. You also need to know that you might have a better chance of success securing one if it’s for modernization, expansion, or technology upgrades.
Additionally, BDC loans often come with longer repayment terms. This could help reduce pressure on your company’s monthly cash flow.
Merchant Cash Advances (MCAs)
If you don’t want a traditional loan but need quick financing, a merchant cash advance is a good alternative. Merchant cash advances are popular among salons, restaurants, retail shops, trades, and e-commerce businesses that have high card volume and seasonal fluctuations.
Unlike with SBA-style loans, merchant cash advances offer fast working capital without slow review processes. Usually, funding is available within a day or two with companies like Bizfund. In addition, approval often depends on your business’s recent sales, rather than on collateral or credit history. For many, this is hugely beneficial during times of need.
Also, with merchant cash advances, it is your payments that are collected as collateral. This is usually a percentage of your daily or weekly sales. And when sales slow down, payment amounts naturally adjust. This structure helps you protect your cash flow.
But you should know that merchant cash advances can cost more than bank loans. That is why they work best for businesses that need short-term financing for equipment repairs. Inventory buys, or bridging finances during slower months.
Futurpreneur Canada Startup Loans
If you’re an entrepreneur aged 18 to 39 and want to start or buy a business, you may qualify for a Futurepreneur loan. Futurpreneur is a non-profit. Its loans are most accessible to entrepreneurs who have limited collateral or credit depth but strong ideas. It is also one of the few loan programs in Canada that offers structured mentoring with financing.
Additionally, Futurpreneur loans can be paired with BDC top-up funding. What this means for your business is that you’ll have access to a higher total amount than most traditional startup products. However, be prepared for the review process to involve looking at your financial projections, business plan, and your commitment to your idea.
Community Futures Development Loans
One of the best alternative financing solutions to SBA loans in Canada for entrepreneurs is community futures development loans. This financing solution operates across Canada’s regional and rural areas. They focus on business retention, community development, and job creation. For these reasons, they support startups and established companies and can help you refine your business plans when you apply to improve your chances of success.
How much you can get, however, will depend on the region, but many offices can lend significant capital for expansions, renovations, equipment, and working capital. Additionally, since their mandate is economic development, you can expect them to be more flexible when reviewing your application and assessing limited collateral and credit challenges.
What’s more, these loans can offer your company advisory services and training to help strengthen your business’s fundamentals and grow within your community.
How to Choose the Right Business Loan
Now that you have an idea of SBA loan alternatives in Canada, you should consider how to choose the right business loan. Below, we share a few of the tips we recommend to start:
- Tip One: You need to identify the purpose of the loan and whether it’s for equipment, expansion, inventory, working capital, or something else. This will help you research the right financing options.
- Tip Two: Repayments can be tricky. That’s why you should review your monthly revenue to understand what repayment structure your business can afford.
- Tip Three: Compare approval requirements, as lenders have varying eligibility criteria.
- Tip Four: Make sure that you examine terms closely alongside total cost and repayment frequency. You don’t want to choose an option that negatively affects your cash flow.
- Tip Five: When taking out a small business loan, you must find out if the lender reports to commercial credit bureaus. If they do this, this could impact your business credit profile.
In addition to the above, you should also decide whether you need speed, flexibility, or a lower-cost solution when choosing among alternative loan options. You should also aim to select the option that supports your business’s growth.
Final Thoughts
Although SBA loans in Canada don’t exist, the country offers several financing alternatives, including loans through the Canada Small Business Financing Program and merchant cash advance financing through Bizfund.
If you’ve considered the tips we provided on choosing the right loan type and are looking for a merchant cash advance, you can contact us here. We offer competitive interest rates and can provide fast access of $10,000 to $300,000.
