BDC Small Business Loan vs Line of Credit

BDC Small Business Loan vs a Line of Credit: Which One Fits Your Business

Choose BDC's Small Business Loan when your business has 24 months of history, at least $100,000 in revenue and a credit score of 600 or more, and needs a lump sum for a one-time cost. Choose a line of credit when the need repeats, like payroll dips or seasonal stock, and you want to draw only what you use.

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By Chady Zahri, Chief Executive Officer · Updated October 8, 2026

Voxen insight

Ask what the money is for before asking who lends it. A one-time purchase belongs on a term loan, and if your file clears BDC's thresholds, BDC's offer is the one to beat. A need that comes back every month belongs on a line of credit, whoever provides it.

A lump sum or money you can draw again

The two products answer different questions. BDC's Small Business Loan is a term loan: you receive one amount and repay it on a schedule, which suits a purchase with a clear cost, like a renovation, a vehicle or a software rollout. A line of credit is a limit you draw on, repay and draw again, which suits needs that come back every month or every season. Using a term loan for a recurring need means paying for money you are not using; using a line of credit for a five-year asset means a balance that never comes down. Matching the product to the use is most of the decision.

BDC Small Business Loan and lines of credit, side by side

BDC is a federal Crown corporation that lends to businesses; its money is a loan, not a grant. The table compares its Small Business Loan with two kinds of line of credit: a bank line under the federal small business financing program, and a line arranged through Voxen.

	BDC Small Business Loan	Bank line of credit under the CSBFP	Line of credit arranged by Voxen
How it works	Term loan: one amount, repaid on a schedule	Revolving line from your bank, backed by the federal program	Revolving line: draw, repay, draw again
Amount	Up to $350,000	Up to $150,000	$10,000 to $1,000,000, subject to revenue, credit profile and lender review
Published thresholds	Up to $100K: $100K+ revenue, credit score 600+, 24+ months in business. $100K to $350K: $250K+ revenue	Revenue of $10M or less; farms excluded	Set per file on revenue and bank activity
Cost	Set by BDC	No more than prime + 5%, plus a 2% registration fee	Interest on the amount drawn only
Where you apply	BDC	Your bank, caisse or credit union (program page)	Voxen application

Program facts checked on 2026-10-08 on the official pages linked.

When the BDC loan is the better choice

If your business clears BDC's thresholds and the need is a one-time cost, start with BDC. A Crown lender with published criteria is built for exactly that file, and its offer is the one to beat. The same goes for a CSBFP line at your bank if the bank says yes: its rate cannot exceed prime plus 5%. Voxen will tell you when either of those beats what it can arrange, because sending a bankable file elsewhere first is how you keep the cost down.

You have 24 months or more of history and a credit score of 600 or more.
Revenue is at least $100,000, or $250,000 for amounts above $100,000.
The money pays for one thing, with a known cost.

When a line of credit is the better choice

A line of credit wins when the need is recurring or uncertain in size. Payroll in a slow month, a supplier who wants payment before your customer pays you, stock for a busy season: each is a draw you repay when the cash comes back. You pay interest only on what you draw, and an unused line costs nothing to keep open on Voxen's lines. It also fits a business BDC's thresholds leave out, for example one with under 24 months of history but steady deposits. The bank loan vs line of credit comparison covers the general case.

What Voxen looks at, and when we send you to BDC

For a line of credit, Voxen looks at your monthly revenue and bank activity, how steady the deposits are, and the payments you already carry, including any BDC loan, since a line has to fit on top of them. If the conversation shows a one-time need and a file that clears BDC's thresholds, we will say so and point you there. If you are under 40 and starting out, Futurpreneur pairs its own loan with BDC money for up to $75,000 in total.

What to do next

Write down what the money pays for and how often the need comes back. If it is a one-time cost and you clear BDC's thresholds, apply to BDC first. If it repeats, apply with Voxen for a line of credit with six months of business bank statements ready, the standard request in the documents guide.

Frequently asked questions

Is BDC a bank?

BDC is the Business Development Bank of Canada, a federal Crown corporation that lends to businesses. Its financing is a loan you repay, not a grant.

What do I need to qualify for a BDC Small Business Loan?

For up to $100,000, BDC asks for at least $100,000 in revenue, a credit score of 600 or more and 24 months or more in business. From $100,000 to $350,000, it asks for at least $250,000 in revenue. Check BDC's page for the full conditions.

Can I have a BDC loan and a line of credit at the same time?

Yes. A lender looking at a line of credit counts your BDC payment as part of what you already owe, so the line has to fit on top of it. Many businesses use a term loan for one purchase and a line for day-to-day swings.

My business is less than 24 months old. What can I do?

BDC's Small Business Loan asks for 24 months. A line of credit depends on your revenue and bank statements rather than a fixed age, and founders aged 18 to 39 can look at Futurpreneur, which pairs its loan with BDC money for up to $75,000 in total.

Is a line of credit cheaper than a term loan?

It depends on how much you draw and for how long. You pay interest only on the drawn balance, so a line used for short gaps can cost less than a term loan sitting in the account. A line drawn to the limit for years usually costs more.

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