About lender
BDC, also known as Business Development Bank of Canada, provides loans for Canadian small and medium-sized businesses. Founded in 1944, BDC has been around for over 75 years.
Today, BDC works with 72,000 entrepreneurs across Canada. It works with small and medium-sized businesses at every stage of growth.
The services provided by BDC include business loans, advisory services, and specialized financing and investment solutions.
BDC is the first bank in Canada that is a Certified B Corporation. This business acts in ways that benefit society as a whole rather than focusing solely on making profits.
Besides, BDC has been on Canada’s Top Employers list for 15 years.
Features
BDC provides financing and advisory services designed to respond to the needs of Canadian businesses. The repayment terms offered by BDC are quite flexible, and the funding levels are pretty high.
BDC has specialized programs designed to increase the number of Indigenous, Black, women, and other underserved entrepreneurs. Through their Cleantech Practice, BDC invests in companies discovering and commercializing ways to combat climate change and pollution. In addition, BDC’s Venture Capital team supports innovative companies reinventing industries and making them more energy efficient.
Being a long-term commercial lender, BDC doesn’t provide regular banking services, such as bank accounts, credit cards, term deposits, and guaranteed investment certificates. In addition, it doesn’t offer grants, lines of credit, or personal loans.
BDC doesn’t provide loans based just on the assets you have in your business. Instead, they assess your project's potential, management strength, and the cash flow from the business operations to make a credit decision.
Pros and cons
The financing options offered by BDC can be attractive for businesses in different industries and at every stage of growth.
Pros:
A wide range of financing options for every stage of a company’s growth
Financing options tailored to your reality — for example, programs for Black entrepreneurs, Indigenous entrepreneurs, woman entrepreneurs, and more
Access to specialized solutions that go beyond conventional financing
No changes to terms and conditions without due cause
BDC doesn’t take personal assets as collateral for the loan
No fees or charges for early payoff or lump-sum payments
An opportunity to postpone your principal payments at the start of the loan
Non-financial support and training in the form of advisory services
Valuable tools and educational materials for entrepreneurs on the BDC website
Cons:
Inability to find out the rates without actually applying for a loan
No personal loans
No business lines of credit
No subsidies or grants
No letters of credit issued
So, the advantages of BDO loans for small and medium-sized businesses are pretty obvious. With a variety of financing options and flexible repayment terms, business owners can select solutions tailored to their needs.
As for disadvantages, a lack of information about the rates can be frustrating. Besides, consider another financial institution if you are looking for a personal loan, a line of credit, a grant, or a subsidy.
Loan conditions
Business loan conditions vary depending on the time the company has been on the market.
Businesses operating for less than 12 months can count on programs from BDC’s partners. If your company has been around for less than one year, they invite you to reach out to Futurpreneur Canada. With Futurpreneur Canada, you can get up to $60,000 financing to launch or grow your business. These are collateral-free loans with a 5-year term.
If your business has been operating for 12-24 months, you can get a loan of up to $250,000 from BDC to jumpstart your projects. You can postpone principal payments at the start of the loan.
Businesses in operation for over 24 months can get the advantage of a variety of financing solutions:
Small projects financing
Commercial real estate financing
Business purchase or transfer financing
Working capital financing
Supply chain support financing
Equipment purchase financing
Purchase order financing
Technology purchase financing
Financing for tech companies
Small projects financing
Commercial real estate financing
Business purchase or transfer financing
Working capital financing
If you need extra working capital to complement your line of credit or launch growth projects, you can apply for working capital financing. The loan term is up to 6 years, and principal payments postponement is available for up to 12 months.
Businesses operating in entertainment, recreation, accommodation, or food service industries can qualify for a loan between $100,000 and $500,000. Such financial support can help handle staffing shortages and fluctuating demand.
Supply chain support financing
Equipment purchase financing
Purchase order financing
Technology purchase financing
Financing for tech companies
Methods of loan funding
After getting approval on your business loan, you should receive the funds in your bank account.
