Loans to Buy a Business or Franchise in Canada (2026)

How to choose between the options

Most money for buying a business is a loan. The right lender depends on the size of the deal, where the business is, and who you are:

• A loan over $350,000, with goodwill or client lists in the price: look at BDC's purchase loan.
• A smaller loan at BDC: BDC points these buyers to its Small Business Loan.
• Buying a franchise, or a deal made mostly of land, buildings or equipment: ask your bank or credit union about the Canada Small Business Financing Program.
• A rural business, or a bank that said no: talk to a Community Futures office or, in Atlantic Canada, a CBDC. In Quebec, look at the SADC and CAE network.
• You are under 40, a woman, Indigenous, Black or a newcomer: check the programs for your group.

You can also combine sources. BDC says a purchase can combine your own money, a business loan and seller financing.

BDC: Business Purchase or Transfer Loan

BDC's Business Purchase or Transfer Loan is for buying an existing Canadian business that already makes revenue. BDC uses this loan for amounts over $350,000. It can pay for:

• buying a competitor or a supplier
• a management or employee buyout
• taking over a family business
• refinancing seller financing (a vendor take-back)
• extra financing for goodwill, client lists and intellectual property
• legal fees, moving expenses and other one-time costs of the purchase

BDC does not publish a maximum amount, interest rate or term. You learn them in BDC's offer, which can include interest-only payments at the start.

BDC does not offer prequalification. It reviews your request once you have found a business and negotiated the main terms. Before you apply, have these ready:

• an agreed purchase price and how it was set
• the deal structure (asset purchase or share purchase)
• a letter of intent with an expected closing date
• the down payment amount you need
• your Notices of Assessment for the past 2 years
• the business's financial statements or income tax returns

Start the financing early to avoid delays with the sale. BDC does not help you find a business to buy. If you are starting a new business or a franchise, BDC points you to its start-up financing instead.

Canada Small Business Financing Program

The Canada Small Business Financing Program is a loan from your bank or credit union, with the government sharing the risk. You apply at your financial institution, and the lender decides.

It is for small businesses and start-ups with annual revenue of $10 million or less. The limit is up to $1.15 million per borrower: up to $1,000,000 in term loans and up to $150,000 in lines of credit. Term loans can pay for costs to buy a franchise, land or buildings used for business, new or used equipment, and leasehold improvements. Within the term loan, no more than $150,000 can go to intangible assets and working capital costs.

Interest is capped at prime plus 3% for term loans and prime plus 5% for lines of credit. You pay a 2% registration fee, which may be financed into the loan. The lender will likely ask for security on the assets financed and may ask for a personal guarantee.

Community and regional lenders

These lenders list buying a business as an eligible use:

• Community Futures British Columbia: loans of up to $1 million, including for purchasing a business. Terms and rates vary by office.
• Community Futures Alberta: Financial Supports: up to $150,000 for rural Alberta businesses, including buying an existing business or opening a franchise.
• Community Futures Saskatchewan: Business Loans, Advice and Training: loans for rural Saskatchewan, including buying a business. The amount and rate are not published.
• CBDC General Business Loan: up to $150,000 in rural Atlantic Canada (more in certain cases) for people who find bank financing hard to get. It covers buying an existing operation and franchise purchases. First-time owners can also look at the CBDC First-time Entrepreneur Loan.
• Small Business Loan Guarantee Program: in Nova Scotia, the province backs loans of up to $500,000 for starting, buying or expanding a small business. You apply through a participating credit union such as Acadian, CUA or iNova.

In Quebec, the SADC and CAE network offers loans from $5,000 up to $300,000 for business transfer and succession, at prime plus 2% with amortization of up to 15 years. Terms may vary from one office to another. The Fonds locaux d'investissement (FLI) offer loans for succession projects, including buying shares and assets of the target company, with aid of up to $150,000 per project over 12 months. In Montreal, the PME MTL Investment Funds list company acquisition, with loans of up to $300,000 from Fonds PME MTL. You must put in at least 20% of the project cost yourself.

Programs for specific owner groups

Youth. The Futurpreneur Canada Core Start-Up Program lends up to $75,000 ($25,000 from Futurpreneur and $50,000 from BDC) to people aged 18 to 39. You can buy a business that has been running for less than 24 months, and you must own more than half. In Quebec, the Youth Strategy loan offers entrepreneurs aged 39 or younger up to $25,000 each to start or buy a business, with an interest holiday and a possible 2-year capital holiday. In rural Atlantic Canada, the CBDC Youth Loan serves ages 18 to 34 and covers franchise purchases and buying the assets of a previous business at or below market value.

Women. In British Columbia, WeBC's Business Loans for Women offer up to $150,000 for business purchases to women who own at least 51% of the business. Loans of $50,000 or less may qualify for the Equal Access to Capital program, which does not require specific security. WeBC's Business Loans for Youth offer up to $70,000 to women aged 19 to 39 buying a business. In Manitoba, WeMB offers loans from $5,000 up to $150,000 that can cover the purchase of an existing business, at prime plus 3% for startups and prime plus 2% for expansion.

Indigenous entrepreneurs. Through Access to Capital, the Aboriginal Entrepreneurship Program provides a non-repayable equity contribution to start, expand or acquire a business: up to $99,999 for individuals and up to $250,000 for community businesses. You apply through your local Indigenous Financial Institution or Métis Capital Corporation, and the funding is taxable. Other options:

• First Peoples Economic Growth Fund: Entrepreneur Loan Program: interest-free loans for Manitoba First Nation members, up to $200,000 or 50% of the fair market value of total project costs, whichever is less.
• First Peoples Economic Growth Fund: Business Contribution Fund: up to 40% of eligible costs (up to $99,999 for an individual owner) to acquire a Manitoba business, plus up to 75% of an independent business valuation. You must raise 10% cash equity and a commercial loan for 40% of the project.
• NADF Financing Solutions: loans of up to $500,000 in Northern Ontario (up to $1,000,000 in some cases) at 8.5% to 12%, including to acquire an existing business.
• Waubetek: Business loans: term loans of up to $500,000 in North Eastern Ontario, including for purchasing a business.
• Two Rivers General Business Loan: loans of up to $1,250,000 in the Two Rivers service area in Ontario, including acquisitions.

Black entrepreneurs. The Futurpreneur Canada Black Entrepreneur Startup Program offers up to $75,000 in loans to Black entrepreneurs aged 18 to 39 who are starting or buying a business and hold more than 50% ownership.

Newcomers. In Newfoundland and Labrador, the CBDC Newcomer Loan Program lends up to $20,000 to newcomers without permanent resident status who want to start or buy a business.

What lenders ask for

Each program sets its own rules. Common ones:

• A business plan and cash flow forecast. Futurpreneur requires both and runs a hard credit check. WeBC asks for a 2-year cash flow forecast. WeMB must approve your plan before you apply.
• Your own money. WeBC's loan for women typically asks for at least 25% personal equity, PME MTL at least 20%, Waubetek and Two Rivers 10%, and the First Peoples Economic Growth Fund loan at least 5%. NADF asks for 10% if you are under 40 and 15% if you are 40 or older.

First steps

1. 1.Find the business and agree on the price and main terms with the seller.
2. 2.Add up the total cost: the price, legal fees and other one-time costs.
3. 3.Match the loan size, the location and your situation to the lenders above.
4. 4.Contact lenders early. Some steps take time, such as WeBC's info session or WeMB's plan approval.

Approval is never certain. Every lender reviews the deal and your situation. BBN Labs can help you find the programs that fit your purchase and explain their rules and deadlines. You apply to each lender yourself.