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The single biggest reason business owners get an unexpected "no" on a term loan application isn't that their business is unfundable — it's that they applied to a lender whose qualification bar didn't match their profile. Understanding what each lender type actually checks makes it far easier to apply in the right place the first time.
The Core Criteria, By Lender Type
Every lender checks some version of the same five factors — but the thresholds differ sharply:
- Banks (RBC, TD, Scotiabank, BMO, CIBC): 650-680+ credit score, 2+ years in business, strong financial statements, often collateral required
- BDC: similar credit bar, but places more weight on business plan and growth trajectory; more flexible on collateral for the right business
- CSBFP (bank-administered government program): similar credit requirements to banks, with government backing reducing the bank's risk on the loan
- Alternative lenders (lendflo's network): 500-600+ credit score common, 3-6 months in business often sufficient, revenue and bank statement history weighted heavily
Revenue Thresholds That Actually Matter
Most alternative lenders want to see consistent monthly revenue of at least $8,000-$10,000, though this varies by industry and loan size requested. Consistency matters as much as the total — a business with steady $15,000/month deposits often qualifies more easily than one with an erratic $10,000-$40,000 swing, even though the second business technically earns more on average.
Documents to Have Ready
Having these ready before you apply speeds up the process significantly, especially with alternative lenders who can move quickly:
- 3-6 months of business bank statements
- CRA Business Number (BN)
- Articles of incorporation or business registration
- A voided cheque for the business account
- For larger amounts: financial statements, tax returns, and a brief description of how funds will be used
What to Do If You Don't Meet a Specific Threshold
If time in business, credit score, or revenue falls short of what banks or BDC require, that doesn't mean you're unfundable — it means you're better matched to a different lender type. Comparing your file against 50+ lenders at once, as lendflo does, surfaces the specific lenders whose criteria you already meet, rather than applying blind to one institution at a time.
