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Lending Loop Review: Peer-to-peer loans in Canada

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Updated: December 27, 2023

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Lending Loop is Canada’s most popular peer-to-peer lending platform and touts itself as a viable alternative to traditional lenders for small businesses looking to access funding. Lending Loop offers loans to small businesses with competitive interest rates, but with a twist. Instead of supplying small business financing themselves, they access funding from individual investors within Canada who are looking to invest in small businesses.

Apply for a loan from Lending Loop

What is Lending Loop?

Lending Loop is a Toronto-based peer-to-peer lending platform that connects small businesses looking to access funds with individuals with money available to lend out. While they are based in Ontario, Lending Loop is a regulated institution registered as an Exempt Market Dealer in Canada’s provinces and territories. The process to access funds through Lending Loop is completed entirely online and they have already connected 11,100 active lenders with a combined $70 million in funds with small businesses looking for funding.

Lending Loop features

  • Dashboard: Lenders and borrowers each have access to a customized dashboard that allows each user a comprehensive look at their current loans, interest rates, and repayment details.
  • Flexible repayment: Borrowers can repayment their loans ahead of schedule with no penalties or extra fees
  • AutoLend: For lenders, the AutoLend feature automatically finds borrowers for your funds that match your risk tolerance, and lends out your money based on your predefined risk criteria.
  • Loan types: All loans are classified as either Express or Standard loans. Express loans and Standard loans have identical grading systems, but Express loans help LendingLoop better adjudicate loans in the $1,000 to $40,000 range.

How does it work?

Lending Loop isn’t a lender themselves. Instead, they connect individuals who want to invest their money with small businesses looking for funding. Lending Loop makes money by charging a fee to their borrowers of 1.5% per year. The fees and processes for Lending Loop are different depending on if you are a lender or a borrower.

Lending Loop for investors

Suppose you’re interested in becoming an investor. In that case, you’ll need to sign up for Lending Loop, which requires some essential financial documentation and personal information, as well as at least $200 to invest.

There are three types of lending loop lenders, non-eligible, eligible, and accredited. An investor must meet one of the conditions listed below to be considered for an investor category. Investor categories dictate the investment limits that will apply to your account.

Eligible investor (Up to $100,000 per 12 months)

  • An investor whose net assets, alone or with their partner, exceeds $400,000.
  • An investor whose income before taxes is $75,000 or more in the two years prior to applying
  • An investor whose income when combined with their spouse’s is $125,000 or more in the two years prior to applying.

Accredited investor (no limit)

  • An investor whose net assets, alone or with their spouse, exceeds $1 million net of related liabilities, or $5 million including liabilities.
  • An investor whose income before taxes is $200,000 or more in the two years prior to applying
  • An investor whose income when combined with their spouse’s is $300,000 or more in the two years prior to applying
  • An investor who is or was a registered adviser or dealer
  • Companies with assets of at least $5 million
  • Individuals or companies who are recognized by the OSC as an accredited investor

Non-eligible investor (Up to $100,000 per 12 months)

Any investor who doesn’t meet the qualifications above are classified as a non-eligible investor.

After your account is approved and your investor classification is determined, you’ll get access to the Lending Loop Marketplace. The marketplace lists the small businesses currently seeking funding, and from here, you’ll be able to choose which companies for whom you’d like to act as a lender. Funding amounts range from $1,000 to $500,000, and in many instances, multiple investors will fund a single small business. The due diligence for each business isn’t entirely your responsibility. Each small business has a risk rating assigned to them by Lending Loop, ranging from A+ for businesses that are extremely reliable, to E, for businesses that are at risk of not paying back their loan. The rating that a business receives distills many factors about the business, including:

  • Ability to service the debt
  • The owner’s score (a minimum score of 640 is required)
  • Existing debts (less debt improves your chances)

You can find out more about Lending Loop’s default rate on their statistics page, but as you can see from the snapshot below, the business’s rating is a good predictor of how reliable they will be in repayment.

Once enough lenders come forward to fund the loan, the money is advanced to the small business, which will begin to make payments to the Lending Loop platform to repay their loan. When the loan is repaid in full, you’ll receive your loan amount back, plus interest. The interest charged to the businesses for their loans goes straight to the investors, and ranges between 4.96% and 24.93% depending on the business’s risk rating A+ businesses are the least risky and will have the lowest interest return, at 4.96%, while E businesses are considered at risk for default and so have the highest interest rate return of 24.93%.

Lending Loop for borrowers

If you’re interested in applying for a small business loan through Lending Loop, the process starts with an application that takes about ten minutes. You’ll answer a variety of questions about yourself and your business, including your business’ financial health. In some cases, you may be contacted for further documentation, such as bank statements.

Once you have submitted all of your information, Lending Loop will evaluate your loan request and extend you a personalized offer for funding with a set amount and interest rate. After you receive your loan documents, you have seven days to accept. Once you get the offer, your loan will appear in the marketplace for investors to fund. You might receive funding from one or many investors, depending on the total amount you borrow. You can opt-out of the borrowing process at any time before 50% of your loan request is funded.

When you receive funding, you’ll begin making payments back to Lending Loop, and in turn, to the investors that funded your business.

How to apply

1. If you own a small business and think that Lending Loop might be a good choice for you, the first step is applying. You’ll answer basic questions about your business on the first screen and how much you are looking to borrow. This will not impact your credit score.

2. You’ll need to provide personal contact information on the second screen and create an account using an email and password.

3. Once you’ve created an account, Lending Loop asks for more detailed information about your business finances.

You may not have some of the information on hand, like your CRA number, your actual annual sales, or your SIN number, so it's a good idea to gather the information beforehand.

4. Once you submit your application, it is reviewed by Lending Loop specialists; if approved, you'll receive an offer. One of the questions asked during the application process is the total amount you'd like to borrow, and your offer will include whether you are approved for that amount and the corresponding interest rate.

5. When you accept the offer, your profile will appear on the marketplace, where investors can supply you with the funds you need. You can use the loan for various purposes to grow or maintain your business, including expanding your inventory, construction or renovations of your business location, purchasing necessary equipment, marketing, hiring new staff, and more.

Apply for a loan from Lending Loop

Other Lending Loop features

If you aren’t ready to seek funding from Lending Loop just yet, there are still a variety of tools you can take advantage of to grow your business and reach your goals.

  • Credit score monitoring: Lending Loop offers free credit score monitoring from Equifax. This feature is available when you create a Lending Loop account.
  • Business loan calculator: If you’re considering borrowing from Lending Loop and are interested in what your monthly payments will be, you can use the Business Loan Calculator to estimate monthly costs associated with various loan amounts and interest rates.
  • Business loans guide: Learn everything you need to know about applying for a business loan before you take the plunge. Lending Loop’s business loans guide is an extensive resource.

Fees and pricing

It’s not free to apply for a loan with Lending Loop. All lenders across Canada charge interest when they lend money. Interest charges compensate lenders for the risk of lending money out. Lending Loop is not an exception to that rule. When you take out a small business loan with Lending Loop, you’ll pay between 4.96% and 24.93% interest. There is no penalty for early repayment of your loan, which is an uncommon benefit for small business borrowers. You could also pay the following fees:

  • A loan origination fee (the full amount will be listed on your loan agreement)
  • An opt-out fee (paid if you change your mind about borrowing money after your loan request has been 50% funded)
  • Missed payment fees, if your missed payment is not rectified within seven days
  • Insufficient funds fee of $50, if your loan payment withdrawal is denied by your bank

As an investor, you’ll also pay a fee to use the Lending Loop platform to find investment opportunities. When a repayment is made on a loan you have extended to a small business owner, Lending Loop charges a 1.5% fee.

Eligibility requirements

For investors

Lending Loop has eligibility requirements for both its investors and small business owners. As an investor, you’ll need to fulfill the following criteria to qualify as a Lending Loop investor.

  • Be a Canadian citizen or permanent resident of Canada
  • Live in Canada
  • Be of the age of majority in your province or territory
  • A valid bank account with a regulated Canadian financial institution
  • At least $200 to begin investing

For small business owners

There is a different set of criteria for small business owners seeking loans. There are two categories for loan qualification: SL and LL loans. SL loans range from $1,000 to $40,000 and require the following:

  • A valid email account
  • A bank account at a regulated financial institution
  • A principal place of business in one of the provinces or territories of Canada
  • Have been in business for at least two years
  • At least half of the business’ management are Canadian residents
  • Be the age of majority in Canada
  • Have earned at least $30,000 in 12 months within the past two years

LL loans range from $5,000 to $500,000 and require the following:

  • A valid email account
  • A bank account at a regulated financial institution
  • A principal place of business in one of the provinces or territories of Canada
  • Have been operating the business for at least one year
  • Have earned at least $100,000 in 12 months within the past two years

In both cases, the small business needs to meet two additional criteria if it is a corporation:

  • Have at least 50% Canadian directors
  • All directors must be 18 years of age or older

These are the minimum qualifying criteria. If you exceed these criteria, you’ll have access to the best interest rates Lending Loan has to offer. You can still be approved if your loan application is riskier, but you will have a lower rating (remember Lending Loop grades your application from A+ to E).

Pros and cons

There are pros and cons to using this service when it comes to Lending Loop versus other small business lenders.



  • The process is entirely online

  • Quick access to a massive pool of potential investors

  • The platform offers other tools like credit monitoring and small business guides

  • Loan amounts from $5,000 to $500,000

  • Interest rates that are competitive with other lenders



  • As a business owner, your loan may not be funded immediately or at all, even if approved

  • As a business owner, your interest rate may be higher than other traditional lenders

  • As an investor, you run the risk of losing your investment

The final word

Should you use Lending Loop as a small business owner? The answer is why not? Lending Loop is a regulated peer-to-peer service with competitive interest rates. That makes it a good alternative to traditional lenders. You have the opportunity to review your loan offer before agreeing to use Lending Loop, so there no reason not to apply for a Lending Loop loan when seeking funding for your next investment into your small business as part of a greater exploration of your loan options.

Apply for a loan from Lending Loop
  • Can I repay my loan ahead of time?


    Yes, you can repay your loan ahead of time at any time without incurring any extra fees.

  • Is Lending Loop safe to use?


    Lending Loop as a platform is safe to use. When you deposit money into Lending Loop as an investor, your money is with a Canadian Chartered Bank. For borrowers, peer-to-peer lending is a mature, regulated industry in Canada, and Lending Loop maintains a good reputation and meets those regulatory standards. That said, investors incur some risk when choosing which small businesses they will fund. The money you lend is not guaranteed, just like investing in the stock market. That said, Lending Loop does their best to accurately determine the level of risk associated with each small business so that you lend within your unique risk tolerance.

  • What are the terms of the loans offered through Lending Loop?


    Lending Loop offers loans with terms from one to five years in length.

  • What are the interest rates for small business loans through Lending Loop?


    Lending Loop offers loans with interest rates between 4.96% and 24.93% interest.

Jordann Brown is a freelance personal finance writer whose areas of expertise include debt management, homeownership and budgeting. She is based in Halifax and has written for publications including The Globe and Mail, Toronto Star, and CBC.


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