Loop offers a credit facility to businesses that can be accessed through our corporate cards. This article explains who is eligible, what we review during underwriting, what you'll need to provide, and how the application process works.
Who is eligible for a Loop credit facility?
To be eligible for a Loop credit facility, your business must:
Be eligible to open a Loop account through our online application (see requirements here). If you haven't onboarded yet, you'll need to complete that step before applying.
Have a minimum of 6 months of operating history
Make a minimum of $120,000 CAD in annual revenue
Have no prior bankruptcies or consumer proposals
Have no derogatory marks on your business credit profile or the credit profile of the business owners
What does Loop review during underwriting?
Our underwriting process focuses primarily on your business's ability to repay. We assess this through a combination of:
1. Cash flow and revenue. We connect directly to your bank accounts and/or your sales channels (e.g. Shopify, Stripe) to verify your revenue and assess cash flow patterns. We look at:
Monthly revenue trends: is the business growing, stable, or declining?
Revenue consistency: how predictable and regular are your deposits?
Average balance: does the business maintain a healthy liquidity cushion?
2. Debt and repayment capacity. We look at your existing debt obligations to understand whether the business can comfortably service additional repayments. Key factors include:
Total outstanding debt relative to your revenue.
Your repayment history: we look favourably on businesses that consistently pay balances on time.
Whether your requested limit is proportionate to your gross revenue.
3. Character and credit. We review the overall profile of the business and its owners, including:
How long the business has been operating (businesses open for 3+ years are viewed more favourably).
Profitability: whether the business is currently generating positive net income.
The personal credit history of the people running the business, which serves as an indicator of financial responsibility.
4. Business stability. We also look at your revenue model and line of business to identify any risks there.
Concentration in revenue: whether the business has a dependence on top clients for the majority of their revenue generation.
Working capital ratio: whether the business has enough assets throughout the year to cover its liabilities.
What documents will you need to provide?
The documents and information we ask for vary based on the size of your request and your business profile. Here's what to expect:
Based on your loan size
Under $50,000: Last 3 months of bank statements; sales channel data; formal financial statements are helpful but not required.
$50,000–$250,000: Last 6 months of bank statements; accountant-prepared financial statements; and most recent tax filing.
Over $250,000: Last 6 months of bank statements; audited financial statements; most recent tax filing and statements of account for all tax accounts.
Based on your business type
Retail or wholesale businesses: Inventory listing with values and inventory aging report.
B2C businesses: Payment processor statements (e.g. Stripe, Square, Shopify).
B2B businesses: Accounts receivable (A/R) and accounts payable (A/P) aging reports.
Businesses with related entities: We will require financial statements and intercompany agreements for all affiliated companies.
If a personal guarantee is required
In some cases we may ask one or more owners to personally guarantee the facility. When this is required, we may require that you provide:
Personal tax return (most recent).
Personal net worth statement.
When is a personal guarantee required? A personal guarantee may be required if any of the following apply:
Business has been operating for less than 3 years
Business is not currently profitable
Total debt is more than 4x net income
Credit cards are not paid in full every month (12/12 months)
Gross profit scale (Revenue x Margin) is less than $5,000,000
How to apply for credit
Our process is designed to be fast and data-driven. Here's what to expect:
Connect your bank account — see here for more information.
Apply for credit on your homepage — fill out a questionnaire about basic business details and financial information.
Connect your sales channel — if applicable, sign into any sales channel you use (e.g. Shopify, Amazon, Stripe) to connect your sales data to your application.
Upload any required documents — our system or Customer Support team will be in contact with you and tell you exactly what's needed based on your application.
Underwriting review — our credit team performs a full review of your application.
Sign your agreement — everything is done digitally.
Receive funding — your credit limit is activated immediately.
How do I request a credit limit increase?
If you already have credit and would like to apply for a credit limit increase, please reach out to our Customer Support team. They will create the application for you, and the rest of the process is similar to the credit application process from Step 4 onwards.
Still have questions?
If you have questions about the application process or want to check whether your business is likely to qualify, reach out to our Customer Support Team at support.bankonloop.com. We're happy to help.