The primary business loans available in Canada are term business loan, business line of credit, merchant cash advance, commercial mortgage, and asset-based loan.
- Term Business loan – A fixed sum is given to the business. Repayments are made over an agreed period with a fixed interest rate.
- Business Line of Credit – Access is granted to revolving credit, like a credit card. The business draws funds as needed and pays in monthly installments.
- Merchant Cash Advance – A business borrows money against proof of upcoming sales until they receive payment from their customers.
- Commercial Mortgage – This kind of loan is used specifically for purchasing property. As with a home loan, the business can pay off the loan over a long period. In this case, the property is used as collateral.
- Asset-Based Loan – The assets of the business are used as collateral. These loans could involve large payouts and lower interest rates.
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