Cash flow gaps can slow down growth, even when sales are strong. The BDC Working Capital Term Loan is a federal financing option designed to help Canadian businesses cover day‑to‑day operating needs while keeping monthly payments manageable. Offered by the Business Development Bank of Canada (BDC), this loan can finance up to 100% of eligible costs and allows you to defer principal payments for up to 24 months.
The BDC Working Capital Term Loan is a fully repayable loan, not a grant. It is meant to support cash flow and operating expenses that traditional lenders may hesitate to finance.
Key features include:
This financing is commonly used by growing small and medium‑sized enterprises (SMEs) that need extra flexibility to scale without draining their cash reserves.
To qualify for the BDC Working Capital Term Loan, your business must meet BDC’s core eligibility requirements:
BDC reviews each application individually. They focus on your ability to repay and your business’s financial history.
This loan is flexible compared to many government programs. Approved funds can be used for:
These expenses must support ongoing operations or growth, not personal use.
Preparing your documents in advance can speed up approval. BDC typically asks for:
Tools like GrantHub’s eligibility matcher can help you confirm whether BDC financing fits your business profile before you gather paperwork.
Confirm eligibility
Review BDC’s minimum requirements and ensure your revenue and credit history are strong.
Prepare your financials
Clear, up‑to‑date financial statements are critical. Incomplete numbers are a common cause of delays.
Apply online or through a BDC advisor
Applications are submitted directly to BDC via their website or with an account manager.
Review and due diligence
BDC assesses repayment ability, cash flow, and business risk.
Approval and funding
Once approved, funds are advanced according to the agreed loan structure and deferral terms.
Assuming it’s a grant
This is a fully repayable loan. Budget for repayments after the deferral period.
Weak cash flow projections
BDC looks closely at your ability to repay. Overly optimistic numbers can hurt credibility.
Applying too early
Businesses without at least 12 months of revenue are rarely approved.
Unclear use of funds
Vague descriptions like “general expenses” can slow approval. Be specific.
Q: Is the BDC Working Capital Term Loan a grant or a loan?
It is a repayable term loan, not a non‑repayable grant. You must repay the full amount plus interest.
Q: How much funding can I receive?
BDC can finance up to 100% of eligible project costs, depending on your credit and business situation.
Q: Can I defer payments at the start?
Yes. Principal payments can be deferred for up to 24 months, which helps protect cash flow during growth periods.
Q: What interest rates apply?
Rates vary based on risk, term length, and your credit profile. BDC sets rates individually, not as a fixed public rate.
Q: Is interest tax deductible?
In most cases, loan interest is deductible as a business expense, subject to CRA rules. Confirm with your accountant.
After the FAQs, remember that GrantHub tracks hundreds of active grant and financing programs across Canada — check which ones match your business profile.
If the BDC Working Capital Term Loan fits your needs, the next step is confirming eligibility and comparing it with other federal and provincial options. GrantHub helps you see where BDC financing fits alongside grants and other loans, so you can choose the right mix of funding for your business’s cash flow and growth plans.
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