Do I need collateral to get a business loan in Canada?
Not always. Working-capital products (MCA, short-term loans, lines of credit under ~$250K) are typically unsecured. Equipment financing is secured by the equipment. Larger term loans and acquisition financing usually require collateral or a personal guarantee.
Start an applicationUnsecured: MCAs, revenue-based financing, short-term loans, smaller lines of credit. Approval is based on cash flow.
Asset-secured: equipment financing (collateral = the equipment), CRE bridge loans (collateral = property), inventory lines.
Most Canadian business loans of any size include a personal guarantee from the principal(s). This is standard market practice and does not mean personal assets are pledged — it means the principal stands behind the obligation.
What secures each product
Figures are typical ranges for a complete file, not guarantees. Final terms depend on revenue, time in business, credit profile and lender review.
| Merchant Cash Advance (MCA) | Unsecured |
|---|---|
| Business Line of Credit | Often unsecured |
| Invoice Factoring | A/R is the collateral |
| Equipment Financing | The equipment |
| Bridge Loan | Usually asset-backed |
| Term Loan | Sometimes |
| Inventory Financing | First charge on inventory + PG |
| Purchase Order Financing | The order + end-customer credit |
| Acquisition Financing | Target assets + PG |