Business loans and lines of credit

You’ll need to book an appointment at your nearest BMO branch to talk to a Relationship Manager. You will also need to bring certain documents to verify your identity and your business information.

During your appointment, we’ll talk about your business needs to make sure you have the lending solutions that are the right fit for you. Your Relationship Manager will then start the application and discuss prices and any required documents with you.

It depends on your business type:

For all businesses you’ll need to bring:

• Government-issued photo IDI D​ for the applicant and/or co-applicant or guarantor
• Recent T4/T4A slips or RL1 if you’re a resident of Quebec, or T1 income tax return or Revenue Quebec TP1 with corresponding notice of assessment
• Trade Name Registration document if your business operates under a Registered Trade Name
• Interim financial statements or final audited statements, if available

*If you’re including a guarantor in your application, you’ll also need to provide these documents for them.

If you have a general partnership, limited partnership or limited liability partnership, also bring one of the following:

• Certificate of General Partnership
• Declaration of a Partnership
• Application for Registration of a PartnershipIf required in your province or territory, a Partnership Agreement Application for Registration of a Partnership

If you have a corporation, also bring one of the following:

• Articles of Incorporation
• Letters Patent / Company Charter
• Articles of Amendment
• Articles of Amalgamation
• Corporate Profile Report

No, you don’t need a BMO business account to apply for a business loan. If your loan is approved, you will be required to open a business account for the funds to be deposited.

Having a BMO account up front can help:

• Speed up adjudication and access to funds
• Simplify loan setup and ongoing payments
• Potentially strengthen your overall banking relationship

When applying for a business loan or line of credit, lenders typically review both personal and business credit history. Personal credit is important for determining qualifications especially for smaller or newer businesses, if there is limited financial history, or if the loan has no collateral. Typically, a personal credit check will be required – with every lender using its own eligibility criteria to consider loan applicants, but a strong credit score is preferred to demonstrate that you’re a creditworthy applicant.

Business credit is considered more for established businesses with existing financial statements, cash flow and debt servicing.

A line of credit can better help you manage your day-to-day operating expenses as you can access the money that you need whenever you need it. You don’t have to make payments or pay interest until you use the funds, and you'll only pay interest on the amount you use.

For a loan, you get the money that you’re borrowing in a lump sum amount up front. A loan is generally better for financing the purchase of an asset.

Depending on the loan, the payment method will differ. A business loan may have automatic payments, where payments are automatically withdrawn from your bank account on a regular frequency (monthly, quarterly, semi-annually et cetera), whereas a credit line for business may be paid through methods such as a transfer/bill payment through an online or mobile banking platform, a pre-authorized payment or a payment in a branch. Full repayment methods can also be found on the monthly statement.

The Commercial Loan Insurance Plan at BMO is optional coverage designed to help protect the financial future of your business, your family and your employees. Our bundled coverage can help you manage your business financial obligations.

A secured business loan requires collateral (such as real estate, equipment or receivables), typically allowing for higher limits with potentially more preferred terms. If the borrower defaults, the bank can seize and liquidate the assets.

An unsecured loan doesn’t require collateral and the approval is based on credit history, financial performance and business stability. Unsecured loans are often supported by personal guarantees and may have a faster approval process.

You can check the balance on your BMO business loan or line of credit through BMO Online Banking, the BMO Mobile Banking app, by calling us at 1-877-262-5907 or by visiting your local BMO branch.

Loan approval times vary with some taking as little as a few days (typical for clients with an existing BMO relationship, strong credit history, small loan amount and no collateral), while others – typically larger or more complex loans or real estate or asset-backed deals (such as appraisals and collateral setup) – may take up to a few weeks.

The difference between a fixed and variable rate is that a fixed rate is locked for the entire loan term, while a variable rate changes with market interest rates. Fixed rates are often chosen for their predictability, as borrowers know what their payment amount is expected to be each month, which can make budgeting easier. Variable rates usually involve more uncertainty but may offer a lower initial cost, which you may benefit from if market rates decline. If interest rates increase, many variable rate loans also allow borrowers to convert to a fixed rate, providing flexibility and potential cost savings.

Business loan interest rates vary depending on the type of loan, the borrower and the risk profile. Customers with strong financial performance and cash flow, good credit history, collateral and an established banking relationship can benefit from lower interest rates, which can also depend on other factors like the loan term.

To secure a lower interest rate, talk to your banker to explore available options. Factors such as your credit score and whether the loan is secured with a valuable asset can significantly impact the rate. Improving your credit score and offering collateral can sometimes result in a lower interest rate.

The BMO prime rate – also known as the prime lending rate – is the annual rate we use to set variable interest rates for our loans, lines of credit and mortgages. The actual rate you’ll get on your loan or line of credit is based on many factors in addition to the prime rate. These include how much you’re borrowing, your credit history and whether you’re using collateral.

At BMO, we’re committed to helping business owners gain better access to capital, educational resources and strategic partnerships.

Explore our specialty programs:

• BMO for Black Entrepreneurs: Tailored support to empower Black-owned businesses
• BMO for Indigenous Entrepreneurs: Customized resources for Indigenous business needs
• Canadian Defence Community Entrepreneurs: Specialized services for our Defence Community members

Book an appointment with us to learn more about our specialty lending and community programs to find the right fit for your business needs.

We’ve partnered with Export Development Canada to offer the Trade Expansion Lending Program to help you grow your business globally.