5 Reasons Why Successful Businesses Also Borrow Money

Canadian small business owners have never had a more complicated relationship with capital. The cost of materials is up, hiring is expensive, and the big banks, despite a series of interest rate cuts over the past year, are still not exactly rolling out the welcome mat. A 2025 survey by Equifax Canada found that 25% of small and medium business owners cited credit availability from banks or suppliers as one of their top concerns heading into the final quarter of the year. That number tells a story most business owners already know by heart.

The good news is that a parallel financial system has been quietly maturing alongside the traditional one. Alternative lending in Canada is no longer a last resort. It is becoming the first call.

The Market Is Growing Fast, For Good Reason

According to Research and Markets, Canada's alternative lending market reached an estimated $18.42 billion in 2025, following a compound annual growth rate of 16% from 2020 to 2024, with projections putting that figure at roughly $30.59 billion by 2029. Those are not niche numbers. That is a structural shift in how Canadian businesses fund themselves.

The reasons are not hard to find. According to the Bank of Canada's Business Outlook Survey for Q4 2025, business sentiment remained subdued, with firms pointing to trade-related uncertainty, slowing demand, and persistent cost pressures as their most pressing concerns. When cash flow is tight and the economic environment is uncertain, waiting three weeks for a bank decision is not a viable strategy. Businesses need answers faster, and alternative lenders have built their entire model around that reality.

What "Alternative" Actually Means in Practice

The term gets used loosely, so it is worth being specific. Alternative lending covers working capital loans, revenue-based financing, equipment financing, invoice factoring, and lines of credit. One of the most practical tools in this category is the merchant cash advance, which gives a business a lump sum in exchange for a percentage of future revenue. There is no fixed monthly payment grinding against a slow week. Repayment breathes with the business, which makes it particularly well-suited to operators with variable or seasonal revenue.

For industries like construction, retail, trucking, and food service, that kind of structural flexibility is not a nice-to-have. It is the difference between taking a contract and turning one down.

The Speed Problem Banks Still Have Not Solved

A contractor who wins a large job but needs equipment before the first draw arrives has a real and immediate problem. Alternative lenders who work with trades and construction businesses understand the cash flow cycle of that industry and can structure a deal accordingly, often with capital in hand within days. A retailer staring at a seasonal inventory window that will not wait for bank paperwork faces the same math. The problem is timing. The solution is fast business funding from a lender who understands the sector.

Speed alone, though, is not the whole value proposition. The better alternative lenders are also smarter about who they will fund.

Credit Scores Are Not the Whole Story

Traditional banks lean heavily on credit scores and historical financials. They want two or three years of clean statements, solid collateral, and a business that practically does not need a loan to qualify for one. Alternative lenders are increasingly looking at revenue patterns, bank statement trends, and business trajectory instead. A business with a rough patch in its history but strong current cash flow is a very different risk than its credit report might suggest.

That nuance matters enormously to the owner who went through a hard year during a supply chain disruption or a pandemic slowdown and rebuilt. The reality is that a lot of viable businesses carry bruised credit, and the full picture of a business cannot be reduced to a three-digit number.

Open Banking and the Technology Layer

There is a regulatory development worth watching closely. Canada's consumer-driven banking framework, commonly called open banking, is set to launch in 2026, designed to replace risky online password sharing with secure data connections and to increase competition in the financial services sector. For alternative lenders, this matters. Open banking means faster, more accurate access to financial data with the borrower's consent, underwriting decisions made in hours rather than days, and a cleaner picture of a business's actual financial health.

For borrowers, it means less paperwork. The loan application process, already streamlined by the better alternative lenders, will get faster still.

AI-powered underwriting is part of this picture too. Decisions that once required manual review are increasingly automated, and lenders are getting better at identifying creditworthy businesses that traditional models would have rejected. The businesses that benefit most are exactly the ones that have been underserved the longest: service businesses with thin assets but strong revenue, newer operators without years of statements, and owners in industries that banks have always found difficult to assess.

Sector-Specific Lending Is Maturing

A trend that deserves more attention is the rise of industry-specific lending. Generic small business loans are fine, but a lender who understands the cash flow cycle of a specific industry will structure a deal differently than one who treats every file the same way.

Trucking is a good example. Owner-operators often invoice on 30- to 60-day terms while fuel costs hit weekly. Getting capital from a lender who actually understands the trucking industry means repayment gets structured around that reality, rather than creating a cash flow problem with the solution itself. Sector fluency is increasingly a real differentiator in this space.

The Road Ahead

The trajectory for alternative lending in Canada is clear. The gap that banks leave in the small business credit market is not getting smaller. The technology powering faster and smarter lending decisions keeps improving. And Canadian entrepreneurs are becoming more financially literate about their options, less willing to accept a bank rejection as the final word.

The businesses that will thrive in this environment are the ones that treat capital access as a skill, not a crisis response. Knowing your options before you need them is a genuine competitive advantage.

2M7.ca works with Canadian small business owners across industries to find the right funding structure for their situation, whether it is their first alternative loan or their tenth. If you have questions about what the best option is for your business, feel free to reach out to us.

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Funding is the only way to turn startups into successful businesses. Getting funding is easier said than done. However, it’s a fact that you need sufficient money to get your business to the next level. Investment and funding are required to raise the necessary capital to either initiate or run a business. The working capital is the option on which companies rely for the smooth running of affairs and uncalled crisis. Funding coupled with motivation, determination, and brilliant ideas can kick start the business off the ground. Lack of proper and timely funding can collapse business strategies and decrease capital, which ultimately causes failure. If you’re wondering why businesses consider looking for funding, you’re at the right place. Following are some reasons due to which funding becomes essential for companies.

Development

Growth and development are the foremost motives of a business before seeking funding. Acquiring new clients, local businesses, and marketing to improve outreach are all the prospects of growth. Establishing additional branches and expanding services is also the result of the funding sought for the sake of growth.

Working Capital

Another significant reason for obtaining fundings is working capital. Working capital is the monetary assets that provide the companies with sustainability. Managing regular affairs and retaining the quality of services are done through the working capital. It can be used to stock the inventory and carry out successful purchases by efficient expenditure. Insufficient working capital can cause detrimental effects to the business in the longer run. The current affairs and prospects depend on the working capital, which is provided through funding.

Acquiring Assets

To hold a firm position in the market and among the competitors, businesses need to purchase assets. Eliminating the competitors in the market is the feature of having more assets. Businesses can emerge out as a winner when they become the sole provider of a service. Companies can either buy shares or completely acquire other businesses. Assets not only strengthen the company but also enhance its market value.

Initiating New Ventures

Companies use funding to plant new ventures. These endeavours can promote the business and increase its progress. To conduct these strategic ventures companies, need ambition and funding. They can articulate ambition in their employees, but for funding, they need help.

Boosting Startups

Funding is vital to support startups in the fierce market. Startups usually have scant resources that can soon become insufficient, leading to a business catastrophe. Startups need financial help and investments to accomplish their goals and thrive among the competitors.

Getting an MCA

Companies can find investors that either work independently or with an organization to gain the required funding. They can also opt for loans from banks. However, the much better alternative is a merchant cash advance that focuses on the growth of a business. Companies prefer MCA as the conditions of the loan are appropriate to their predicament. The best part about getting an MCA is that paying it back is extremely convenient. You’ll only be paying back a specific percentage of your monthly earning. And, if there’s a month where you don’t generate revenue due to whatever reason, you won’t need to pay the finance company back anything. Receiving timely fundings can save companies from derailments. If you’re looking for a financial organization that can get you the resources you need to boost your business, 2M7 is just the company you should work with. We’ve helped hundreds of companies like yours in the past with our 75% approval rating. We offer merchant cash advances to businesses in all industries and of all sizes. Gain an edge over your competition and contact us today.

2M7 Financial Solutions is honoured to be featured as a leading merchant cash advance provider in the 2022 Canada FinTech Lending Study, organized by Smarter Loans, which offers insights into the state of the industry and emerging trends. According to the study, the primary concerns for borrowers were interest rates and loan terms, with 40% ranking these as their top priorities. This indicates that financing needs are rapidly evolving – which is particularly true for Canadian businesses.

However, a shift in the financial landscape has created unique challenges for small and medium businesses in getting approved for loans, and the digital credit score algorithms used by traditional lending sources such as banks have made it increasingly more difficult to secure small business financing. Therefore, 2M7 has been stepping up to support Canadian businesses with a lending alternative – providing faster and easier access to the working capital they need, and offering flexible repayment terms to help maintain a positive cashflow during these challenging times.“

We are directly supporting the economic recovery and are working tirelessly to help Canadian companies prosper during these times,” said Avi Bernstein, CEO of 2M7 Financial Solutions. “Right now, more than ever, small and medium businesses need more accessible funding options to grow their businesses, and 2M7 is eager to be a part of the journey alongside them. We love to see our clients succeed and are committed to supporting their growth, just as any good partner should.”

With a 75% approval rate, 2M7 Financial Solutions is delivering on its mission to fund every Canadian business that needs financing. Using a proprietary algorithm to evaluate risk and determine credit worthiness, 2M7 is able to fund businesses that might not otherwise qualify for a traditional loan. Furthermore, the innovative assessment process gets businesses approved faster, with funds deposited directly into their bank accounts within 24-48 hours – delivering a solution to the simplified application process and rapid access to funds that were rated among the priorities for borrowers in the 2022 FinTech study.

About 2M7 Financial Solutions

‍2M7 strives to provide a unique financing solution that is in line with the demands of today’s emerging industry trends in order to create a seamless funding and repayment experience. As the industry continues to evolve, 2M7 remains at the forefront of the innovative technologies and processes that are transforming the Canadian financial industry, providing solutions that better meet the needs of Canadian businesses.