An Overview of RBC Royal Bank Small Business Loans
RBC Bank, also called the Royal Bank of Canada, is one of the largest banks with Multinational status in Canada. With deep roots in several sectors across the Canadian economy, this bank is one of the largest providers of small business loans to entrepreneurs and small-scale entrepreneurs. Currently, RBC serves more than 16 million customers, some of whom are owners of small businesses, and some of the loans they offer are short- and long-term loans. In addition, some of the small loans on offer by RBC Royal Bank are backed by government guarantees as a means of supporting the growth of small businesses across the Canadian economy.
The loans offered by RBC have fixed or variable interest rates attached to them. Loans with a variable interest rate can be as low as $5000 and above, while fixed interest rates are for loans starting from $10000 and above. As for the loan tenure, they vary from 6 months minimum to a maximum 7-year tenure.
Types of Loans offered by RBC Royal Bank
There are so many loan options offered by RBC Royal Bank to give borrowers the flexibility of choice. So feel free to go through the options below to find a loan that suits you.
If you wish to buy equipment for your business, a term loan will be an appropriate loan to apply for. Term loans have a maximum tenure of 7 years, and you are allowed to spread the repayment across several years in smaller installments. If the equipment in question or asset is very expensive, the extended repayment period will help you avoid defaults. Term loans are ideal for companies that require equipment or work tools, equipment leasing, debt refinancing, or boosting production capacity.
Loans for Equipment leasing
This loan is similar to term loans, but it is strictly for leasing expensive equipment that the business cannot procure. A qualified applicant can get up to 100% of the leasing cost, including the cost of installation. RBC Bank can customize the loan to fit your business requirement, but the lease payment will be tax-deductible.
Another small business loan offered by RBC Royal Bank is an Equipment PurchaseLine. Rather than being a loan, it is more or less a line of revolving credit granted to production businesses to procure new equipment or lease one. This credit line is a hybrid because you may use it for an outright equipment purchase of a lease. One great feature of this credit line is that once it is approved, you can continue to draw from it, and it comes with either a flexible or fixed interest rate. The Equipment PurchaseLine credit line is ideal for businesses looking to buy expensive equipment without putting their cash flow at risk or those who wish to lease several pieces of equipment at the same time.
If you are interested in applying for this loan, you will need to speak with a representative of RBC Royal to know more about the type of interest rate attached to the loan.
Franciere Agricole Du Quebec
This loan is specially designed for small-time farmers in Quebec, Canada. The purpose of the loan is to support small farmers by giving them secured loans. Farmers who qualify for this loan scheme can access up to $5 million and a forestry loan of up to $750,000. If your farm is domiciled in Quebec or you are looking to diversify your Agribusiness, this is a special loan you can apply for. You can also use the proceeds from the loan to expand farming operations, among other needs.
Canadian Agricultural Loans Act
Also called CALA, the Canadian Agricultural Loans Act is meant for Canadian farmers. This loan is meant for farming production, Agric value chain improvement, and distribution channels. Qualified applicants can receive up to 80% of their financing needs, while new farmers who are just setting up their farms can receive up to 90% of their financing needs. The interest rates attached to this loan are flexible and quite competitive. Businesses can avail up to $500,000 in funding.
Canada Small Business Loan
RBC Royal Bank small business loan is offered to small business owners to help them purchase a business property or improve an existing one. The federal government guarantees about 85% of this loan, and eligible businesses can get up to $1 million in funding. However, there is a caveat;
This loan can only be used to purchase or improve a property that has been under the ownership of the business for at least 6 months before the loan application. Also, only 35% of the maximum loan amount can be spent on equipment procurement or leasing. If you are looking to grow your existing business, this is the loan for you. It is also ideal for improving your cash flow situation or raising working capital.
Farm Management Line of Credit
The last small business loan offered by RBC Royal Bank is also meant for agro-allied businesses. This line of credit is a mix of all the agricultural loans offered by the bank, so it can best be described as a hybrid. It can be used to improve your cash flow, procure farmland, buy farming equipment, or for the general improvement of agricultural extensions.
RBC gives you a choice to customize your repayment in line with the income generation capacity of your business, and you can also choose a tenure and interest rate option you prefer.
What Lending Criteria does the bank have
The lending criteria to qualify for any of the loan types reviewed above are not listed on RBC Royal Bank’s website. For this reason, many of the loan applications submitted by interested borrowers are turned down since they do not know whether they qualify for the loan or not. However, before you apply for any of their loans, we recommend you have a very good credit score.
Also, the business you are looking to finance with the loan must be domiciled in Canada, not outside the country. Another thing you will need to do is to get your accounting records in order. Like other banks, RBC will most likely request all your asset and financial documents, including statements of accounts and sales invoices. These documents will be requested because the banker will like to evaluate the ability of your business to repay the loan you wish to borrow. Lastly, additional eligibility may be requested of you, so be prepared.
Here are some general criteria RBC Bank may use to evaluate your application.
- Your business must be profit-generating
- It must fall within the SBA definition of small business
- The business must be domiciled in Canada
- As the owner, you must have an equity stake in the business
- The purpose of the loan must be clear and detailed
NB: To know more about the lending criteria for an RBC Royal Bank Loan, visit an RBC bank branch or talk to an advisor over the phone to know more.
RBC Royal Bank Interest Rate, Fees, and Loan Options
RBC Royal Bank does not share its interest rates and application fees with the public but suffice to say that their loans attract interest, among other charges. However, several factors will determine the interest rate you will be charged for the loan. Also, you may not be in a position to decide whether you want a fixed or a variable interest rate.
Factors that may influence the cost of the loan include
Credit Score: Your credit score may influence how much you will be charged as interest. If you have a poor credit score, you may be deemed a credit risk, and the interest attached to your loan may be high. If you have a high score, the interest rate may be lower.
Prevailing industry rate: The prevailing banking industry rate may also determine how much RBC Royal will charge as interest. If the industry rate is rising, you may pay a higher rate in line with industry standards.
NB: Contact an RBC agent to know more about the interest rate or other application fees.
RBC Royal Bank Loan Options Application
The RBC Royal Bank loan application process is very easy.
To apply for the loan, all you need to do is visit the RBC official website and click on the Business loan portal. An application form will be generated for you to fill in your details. After submission, an agent will contact you by phone to set the loan process in motion. The portal will also ask you to indicate if your business has less than 10 employees or more than 10 employees.
For a physical application, kindly visit an RBC Royal Bank branch near you to request an application form. A representative will be present to take you through the entire process. Or better still, place a call to
Summary of RBC Royal Bank Loan Options
RBC Royal Bank is for small businesses operating in Canada. Businesses can avail up to $5 million depending on the loan option they apply for. The process is quite flexible, but you will have to speak to an RBC agent to learn more about the prevailing interest rate.
To find out more loan options to fund your small business, kindly click here