Are you applying for your first business loan? Here’s what to expect
It’s great when clients ask questions, even if they aren’t sure what to ask. The best thing to do is communicate.
Jun. 24, 2025
6-minute read
Taking the plunge into entrepreneurship can be daunting. One of the first hurdles prospective business owners face is securing startup capital, and thoughts about “how can I afford this?” Before opening the doors to your business, whether online or the more traditional brick-and-mortar variety, you’re going to need capital to invest. Most people are not in the position to fund a new business endeavour completely out of pocket, and even if they are, that level of risk is not always advisable. Even fewer people have the privilege of going to the bank of mom and dad.
Enter the solution: a business loan.
However, before you apply for a business loan, you’ll need to decide what kind of business structure you will be using.
If you’re curious about entrepreneurship, have a dream of setting up shop, or are ready to take the next steps, CIBC wants to help you along the way.
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Looking for borrowing options? Tell us about your business and our tool will recommend financing that’s right for you.
What to expect when applying for your first business loan
What documents and paperwork do I need when connecting with a business advisor?
You may need:
- Personal and Business Financial documents based on your legal structure.
- Your Personal Notice of Assessment Opens a new window. and T1 General Tax Returns for the last 2 years, in addition to the Business Financial Statements for the same period.
As we move forward with the application, you may need to provide additional information.
You should also expect to provide a business plan which typically includes some of the following information:
- Executive summary
- Company description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- A detailed breakdown of funding request
- Financial projections
Additional information may be needed depending on the scope of your business, business structure, and your individual needs. The documents required often include the following:
- 2-year cash flow projections
- Articles of incorporation or a partnership agreement
- Standard ID requirements
- Personal net worth
- Supporting bank savings and investment statements to confirm assets
- Source of equity injection from business owners, such as property tax bills from investment properties
- Franchise agreements if the business is a new business franchise
- Lease agreement
- Purchase and sale agreement with a breakdown of the purchase price (for turnkey business)
- An appraisal
- HST/GST registration documents
Is there more than one type of business loan?
Although the process of loan applications can be overwhelming, there are many roads to financing your business Opens in a new window..
Business loans at CIBC are not one-size-fits-all. In fact, CIBC has a variety of special loans available for different business segments — from startup financing to specialized loans packages for professionals, such as medical and physician, and optometrist offerings.
What are the pros and cons of having a business loan?
CIBC has a handy list of pros and cons to help clarify why a business loan is the right way to go for so many first-time business owners.
The pros include:
- Needs to be paid off over a certain period, which means that the outstanding total decreases as the payments are made.
- Makes it easier to manage credit as the loans are non-revolving.
- Easier to plan cash flow as you know how much you must pay on the loan every month.
- Easier for tax returns.
While the cons are:
- Compared to other options, the entire payment may not be tax-deductible; only interest will be.
- Non-revolving: if the client needs additional funds, they will have to reapply.
Should business loans be kept separate from personal loans?
If you have never had a separate business banking account, you might wonder why it is necessary to have a business loan. Having a business loan or a business account helps with future growth and credit requests as there will be historical information that the lenders will be able to use for making decisions. There is also the fact that by keeping things separate, you won’t have to spend additional time trying to sort out your business and personal expenses come tax season. There are also numerous financial options and products only available to businesses that you would otherwise miss out on.
When you apply for a business loan from CIBC, you can expect to have your questions answered, your application on track, and the beginning of a great relationship that will help you achieve your business goals.
If you’re looking to take out a business loan, we can help.
Contact your Relationship Manager or our Business Client Advice Centre at 1-866-992-7223 Opens your phone app.. They’ll work with you to understand your needs, provide expert advice and customized financial solutions. Whether you need to clarify your borrowing options or learn how to set up a business account, we’ll make it easy for you to make your ambitions a reality.
