Can I get a small business loan even if I have no credit history or bad credit?

If you have the entrepreneurial spirit and want to start a small business in Ontario it can be tricky to get a loan to get your idea off the ground, especially if you're new to Canada. You might have no credit history yet, or even if you’ve been here for a few years you might have bad credit. Both of those cases require some creative ways to get a business loan.

The traditional ways of getting a loan through major banks or third-party lenders may not be an option. Banks typically require good to excellent credit as one key consideration as well as proof of steady income or assets (collateral) in Canada. Third-party lenders can require less proof of financial stability but their loans can come at a hefty repayment price with high interest rates and expensive payback requirements.

What are some other lending options?

ACCESS Community Capital Fund is an example of an organization that offers alternative business loans. They are a registered Canadian charity based in Toronto that helps people in financial need in the Greater Toronto and Hamilton area wanting to start small businesses or relaunch successful careers in Canada

 Through a character-based lending model, ACCESS will assess your financial situation, relevant experience or training, as well as your motivation to succeed as key qualifying criteria. They help those with viable and achievable self-employment plans and employment goals who have limited or no access to loans through banks due to lack of good or established credit; low-income and assets. They consider your capacity to repay the loan and their goal is to make sure you won’t take on debt you cannot manage.

ACCESS offers micro or small loan programs like the:

  • Small Business Loan Program a low-interest loan of up to $5,000 for first-time applicants that gives emerging entrepreneurs access to the capital they need to launch a business. Clients who successfully pay off their first loan can apply for a second loan of  up to $10,000.

How do I qualify for one of these loans?

You must be a Canadian citizen, a permanent resident, or a confirmed Convention Refugee (not claimant) with a legal right to work in Canada. And you must be a resident of the Greater Toronto and Hamilton area.

You will then be asked to complete an application form for the appropriate loan and submit the required supporting documents like the following:  

  • Proof of income (copy of pay stub)
  • Credit report and score from Equifax
  • Notice of Assessment from Canada Revenue Agency
  • Business plan and cash flow projections
  • Business registration (if registered)
  • Two pieces of valid photo ID (driver’s license, passport or immigration document etc.)
  • Proof of residence (utility bill, bank statement etc.)
  • Resume

What other support programs are there for my business idea? 

If you’re looking for more than just capital to start a business there are other programs you can apply to that offer business training and coaching.

Small Business Accelerator Program 

The Small Business Accelerator Program provides free business training through facilitated workshops. If you already have a business, or if you are in the early stage of development it can prepare you to successfully launch your business. 

Topics covered in this program include: 

  • Business Planning
  • Marketing 
  • Financials
  • Business Taxes 

Eligibility requirements: Canadian citizens, permanent residents, convention refugees with a legal right to work in Canada. 

Women's Business Accelerator Program

The Women's Business Accelerator Program (WBA) is also a free business training program that equips women with the skills and tools they need to start and grow a business; empowering them to achieve economic independence. This program covers topics from business ideation to developing a solid business plan facilitated by experienced industry professionals and with one-to-one guidance from coaches. Participants have the opportunity to home their presentation skills through a business plan pitch.

Eligibility requirements: permanent residents, convention refugees, or a live-in caregiver with a legal right to work in Canada

Programs for Young Entrepreneurs

Futurpreneur Canada is a program for 18-39 yr olds aspiring to start a business. It offers support and resources for every stage of the business planning. This includes:

  • Pre-launch coaching
  • Online resources
  • Financing
  • Mentoring

The Summer Company program offered through the Government of Ontario helps young people kick start a summer business by offering start-up money, and advice and mentorship from local business leaders. In order to qualify for this program you must be:

  • a Canadian citizen or permanent resident living in Ontario 
  • between the ages of 15-29
  • in high school, college or university
There are Small Business Enterprise Centres across many locations of Ontario to help you with your small business initiatives. Visit the Government of Ontario page for more locations near you.

Produced by: ACCESS Capital Community Fund

For More Information

  • Small Business Programs - A list of free marketing and startup seminars and workshops from the Toronto Public Library.
  • Foreign Credential Recognition Loan Program  a low-interest loan for newcomers who need money to relaunch their careers. Used towards career credential recognition from the Government of Canada.
  • Community Capital Fund -  Information about the different community funds granted to organizations across Ontario. From the Trillium Foundation website.
  • Business Grants and Financing - A list  of government grants and financing options from the Government of Canada. 


Last updated: January 16, 2024 4006461