How do business loan brokers work in Canada?

A business loan broker in Canada does what a broker does anywhere: learns your business, packages your file and takes it to the lenders most likely to fund it, from banks and credit unions to online lenders, equipment lessors and factoring companies. There is no federal or provincial licence for brokers of business loans, unless the loan is a mortgage. Mortgage brokerages, including those that arrange commercial mortgages, are licensed province by province.

That makes choosing well a matter of evidence: references, written fee terms, a clean corporate record and a track record with lenders you have heard of.

How the Canadian market is built

Canadian business lending has three broad layers, and a good broker works across all of them.

Banks and credit unions. The big banks, regional credit unions and caisses populaires offer term loans, lines of credit and government backed loans. They price lowest but ask for the most documentation and the strongest financials.

The Canada Small Business Financing Program. This federal program shares risk with lenders so they can approve loans they might otherwise decline. ISED reports 6,409 loans worth close to $1.9 billion in the 2024-25 fiscal year, the largest value in the program's history. Our guide to the Canada Small Business Financing Program through a broker covers its terms.

Alternative lenders. Online lenders, equipment finance companies, factoring firms and revenue-based funders move faster and accept more risk. Many work through brokers on purpose. Merchant Growth, for example, runs a partner program for brokers and agencies and funds up to $1 million per business. Funder Intel lists other active Canadian funders including Journey Capital and IOU Financial. These are examples of how the market is built; your broker will know which lenders fit your file.

What is regulated, and what is not

Mortgage brokering is licensed. Every province except Prince Edward Island licenses mortgage brokerages and individual brokers, according to MPA Mag's provincial licensing guide. The regulators are FSRA in Ontario, BCFSA in British Columbia, RECA in Alberta, the AMF in Quebec and their counterparts in the other provinces. FSRA's 2024-25 annual report counts 1,180 licensed mortgage brokerages in Ontario alone at March 31, 2025. Blakes notes that Quebec's regime covers commercial mortgages too, so a broker arranging a loan secured by your building should hold a licence.

Non-mortgage business brokering is not licensed. Fasken's review of British Columbia's new Mortgage Services Act shows it covers dealing, trading, lending and administering mortgages, and nothing else. The same pattern holds across the provinces. A broker arranging an equipment lease, a term loan, a line of credit, factoring or a merchant cash advance needs no specific licence.

Pricing has a ceiling. The Criminal Code caps interest. Bennett Jones reports the criminal rate fell to 35% APR on January 1, 2025. Commercial loans to a corporation or other entity, for a business purpose, are treated differently: between $10,000 and $500,000 the cap is 48% APR, and above $500,000 no criminal rate applies.

Business financing has no disclosure law. Canada has no counterpart to the commercial financing disclosure laws now in eleven US states. Federal cost of borrowing rules are written for consumers. So the written offer you get through your broker is your main tool for comparing costs.

How Canadian brokers are paid

Most business loan brokers are paid by the lender, as a commission when your deal funds. Some charge the business a fee for packaging a complex file, such as a Canada Small Business Financing loan or an acquisition. Both are legitimate when they are clear.

Ask three questions at the start:

Who pays you, the lender or me?
If I pay you, how much, and when?
Will you show me each lender's written offer, not a summary?

A fee demanded before any lender has made an offer is the behaviour to watch for. Established brokers are paid when you are funded.

How to choose a broker in Canada

Without a licence to check, use these signals:

Corporate registration. Confirm the brokerage is incorporated or registered provincially or federally, and that the name on the fee agreement matches.
Mortgage licence where it applies. If any part of your deal is secured by real estate, check the broker on FSRA's registry, BCFSA's search or RECA ProCheck.
Lender references. Ask which lenders the broker placed deals with in the last year. Good brokers name them.
Loan type fit. A broker strong in equipment finance may not be the right choice for a Canada Small Business Financing loan, and the other way around.
Fees in writing. Get the compensation arrangement in writing before you send financial statements.

Our guide on how to choose a business loan broker goes deeper.

When a broker is worth it in Canada

A broker earns the most when your file does not fit one obvious lender. That includes a first loan for a young company, a Canada Small Business Financing request your branch is slow to take on, an equipment purchase that a lessor can approve faster than a bank, or a deal that blends a term loan with a line of credit.

A broker also saves time when lenders want different packages. Banks ask for financial statements, tax returns and projections. Online lenders often decide from bank statements alone. A broker who knows each lender's file can send the right package to the right lender once, rather than you applying in five places and collecting five credit checks.

If your bank already offers what you need at a fair price, take it. A good broker will tell you that too.

Canada on the register

The register lists business loan brokerages across Canada with a register number, status and last checked date on every entry. Browse by province, including Ontario, British Columbia, Alberta and Quebec, or by loan type, starting with Canada small business loans. Where a broker holds a mortgage licence, we link the entry to the provincial regulator's record. You can check a broker's standing at any time, and brokers can claim their entry for free.

For province specific detail, read our guides to business loan brokers in Ontario and business loan brokers in British Columbia and Alberta.

Questions owners ask

Do business loan brokers need a licence in Canada?

Not unless they arrange mortgages. No federal or provincial licence exists for brokers of business term loans, equipment finance, factoring or merchant cash advances. Mortgage brokerages, including commercial mortgage brokers, are licensed by each province.

Is there a cap on business loan rates in Canada?

Yes, through the Criminal Code. From January 1, 2025 the criminal rate is 35% APR, with commercial loans to companies between $10,000 and $500,000 capped at 48% APR and loans over $500,000 exempt.

Can a broker help with a Canada Small Business Financing loan?

Yes. A broker can prepare the application and introduce you to a participating lender, but the lender makes the credit decision and registers the loan with the federal government.

How are Canadian business loan brokers paid?

Most are paid a commission by the lender when the deal funds. Some charge the business a fee for packaging or advisory work. Ask for the arrangement in writing before you share documents.