What changed in Canadian small business lending this year
Bank credit tightened, alternative funding filled the gap, and the cost of not reading the terms went up.
September 1, 2026 · 1 min read
Two things happened at once to Canadian small businesses this year, and they pull in opposite directions.
Bank credit got harder to reach
Tighter criteria at the big banks pushed more businesses toward alternative funding — not because the businesses got worse, but because the box got smaller. Plenty of profitable, well-run companies now fall outside it for reasons that have nothing to do with whether they can repay.
Alternative funding got easier to reach
More lenders, faster decisions, less paperwork. That is genuinely good. It also means more offers arriving with the cost buried in a factor rate, a daily debit, or a renewal clause that resets the whole thing before it finishes.
What that means when you are choosing
Speed is now table stakes — a decision inside a business day is normal, not remarkable. What still varies enormously is whether you are told the total in dollars before you sign, and whether the term actually ends.
Ask for the total payback, the payment, and the number of payments. If those three are hard to get out of someone, the speed was not the thing you needed to compare.