Canada · Business Funding
Business Funding in Canada, Where Things Stand After the 2025 Rate Changes
Canada's small-business economy runs on the Toronto region's services and logistics base, Vancouver's trade and construction market, Calgary and Edmonton's energy-services firms, Montreal's manufacturing corridor, and independent operators across every province and territory. Commera Finance works in Canada as a referral partner: we review your file, then refer it to Canadian funding partners, who price and contract the deal. Since January 1, 2025, an amended federal criminal interest rate has capped the all-in cost of most credit, with commercial tiers worth understanding before you compare offers. This page exists so Canadian owners can find honest context.
What Canada's commercial financing law means for you
No Canadian commercial financing disclosure law; Criminal Code s. 347 caps the cost of credit
Effective: Amended criminal interest rate effective January 1, 2025
Citation: Criminal Code (Canada), s. 347, as amended by S.C. 2023, c. 26, s. 610, in force January 1, 2025; Criminal Interest Rate Regulations, SOR/2024-114
Canada has not enacted a commercial financing disclosure statute of the California SB 1235 type, and no province mandates a standardized pre-signing disclosure for commercial financing. What Canadian borrowers have instead is a federal ceiling on the cost of credit. As of January 1, 2025, Criminal Code s. 347 sets the criminal rate at an annual percentage rate above 35%, and it defines interest broadly: fees, commissions, and similar charges count no matter who receives them, a broker's commission included. The offence is broader than charging: entering into, offering, or advertising an agreement that provides for interest above the criminal rate, or receiving interest at that rate, is the offence unless an exemption applies. The Criminal Interest Rate Regulations (SOR/2024-114) exempt commercial borrowing in tiers: no cap on amounts above $500,000, a 48% APR cap on amounts over $10,000 up to and including $500,000, and the 35% ceiling at $10,000 or below. Agreements entered into before January 1, 2025 stay under the prior 60% effective-annual-rate regime for payments arising from them. The practical use for an owner is knowing what you are being quoted: the tiers are all-in numbers, so a quote's fees and commissions count toward the rate.
Applicability
The commercial exemption has two conditions plus an amount tier. The borrower must not be a natural person (a corporation or partnership qualifies; a sole proprietor borrowing in their own name does not, even for a business loan), and the borrowing must be for a business or commercial purpose. Then by amount: above $500,000 no criminal-rate ceiling applies, over $10,000 up to and including $500,000 the all-in cost must sit at or under 48% APR, and at exactly $10,000 or below the general 35% rate applies. Whether s. 347 reaches a purchase of future receivables has not been settled by a leading Canadian case; courts weigh substance over form, so how an advance is structured matters, and that is a question for Canadian counsel.
What you should expect
- Pricing and contracting from the Canadian funding partner, not from Commera Finance; our role in Canada is referral
- No mandated pre-signing disclosure form, so get total repayment, payment schedule, and prepayment terms in writing before you sign
- All-in math on any quote: fees and commissions count toward the criminal-rate tiers, not just the stated rate
- On a deal over $10,000 up to $500,000, a 48% APR ceiling if your business is incorporated; above $500,000, no criminal-rate ceiling applies
- If you operate as a sole proprietor borrowing in your own name, the commercial exemption does not apply to you and the 35% ceiling does
Plain-English context, not legal advice. This summary was checked against the Criminal Code s. 347 text and the Criminal Interest Rate Regulations (SOR/2024-114) as published on the Justice Laws website, July 2026; have qualified Canadian counsel confirm how it applies to your agreement. Commera Finance acts as a referral partner in Canada, and the Canadian funder prices and contracts the deal.
Funding options for Canadian businesses
An advisor prices these against each other for your file rather than pushing whichever one funds fastest.
Figures on this page are illustrative estimates only and are not an offer of financing. All amounts, rates, factor rates, terms, payment amounts, timelines, and qualification criteria vary by lender, depend on funder underwriting and your business's bank statement history, and are subject to change without notice. Nothing here is guaranteed until a funder issues terms and you sign them. Factor rates do not represent APR. Commera is a broker, not a lender, and does not set rates.
Common questions from Canadian owners
Is a merchant cash advance legal in Canada?
Yes, commercial financing, including merchant cash advances, is legal in Canada. The guardrail is federal: as of January 1, 2025, Criminal Code s. 347 makes it a criminal offence to enter into, offer, or advertise an agreement providing for interest above a 35% APR, or to receive interest at that rate, unless an exemption in the Criminal Interest Rate Regulations (SOR/2024-114) applies, and fees and commissions count as interest no matter who receives them. The regulations exempt commercial borrowing by incorporated businesses: no ceiling above $500,000 and a 48% APR ceiling on amounts over $10,000 up to $500,000. One open question worth knowing: no leading Canadian case has settled whether an advance structured as a purchase of future receivables counts as credit under s. 347, and courts weigh substance over form. There is no SB 1235-style disclosure statute, so get total repayment, payment schedule, and prepayment terms in writing before signing.
How does the 48% cap work on a deal between $10,000 and $500,000?
The ceiling is all-in. Interest under s. 347 includes fees, commissions, and similar charges, not just the stated rate, so the full cost of the financing has to stay at or under 48% APR once everything is counted. Two conditions gate the tier: the borrower cannot be a natural person, so it covers a corporation or partnership but not a sole proprietor borrowing in their own name, and the borrowing must be for a business or commercial purpose. The boundaries are exact: at $10,000 or below the 35% rate applies, and only amounts over $10,000 fall in the 48% tier. When you compare offers, annualize the whole cost: on a short-term product a modest-sounding fee can translate into a high APR. Ask the funder to show the all-in annualized figure, and have Canadian counsel confirm how the ceiling applies to your specific agreement.
What does referral partner mean for my business?
In Canada, Commera Finance does not price, fund, or contract your deal. We review your file, then refer it to Canadian funding partners; the partner that takes it sets the terms, issues the agreement, and funds it. What we do: match your file to partners, explain the offers next to each other, and stay your point of contact. What we do not do: quote you our own rates or paper the transaction. Your agreement is with the Canadian funder.
Can I apply from Ontario, BC, or anywhere else in Canada, and what changes vs a US applicant?
Yes. The application form accepts all 13 provinces and territories, so an owner in Ontario, British Columbia, Alberta, Quebec, or anywhere else in Canada applies the same way a US owner does: same form, same documents, bank statements and basic business information. What changes is who funds you. A Canadian file goes to our Canadian funding partners rather than Commera Finance's US lender network, the offer and the contract come from that Canadian funder, and timing follows the partner's underwriting rather than ours.
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