Navigating funding for SMBs in 2026: a lender's perspective

#StandWithOwners · Jun 1, 2026

You may have heard that 2026 is a "tough credit environment", but what does that mean for your team?

At the recent

event in Vancouver, Kirsten Reinholz, Business Banking Lead at

, gave a realistic, behind-the-scenes look at what lenders are evaluating right now and how Canadian small businesses can put their best foot forward.

The current reality: a tough credit environment

Kirsten shared, "Demonstrating strength beyond the financials shows lenders you understand your business model and how to manage risk."

She addressed 4 key challenges shaping the current lending environment to help small businesses better prepare:

1. Unpredictable cash flow: Rising costs, late customer payments and seasonal dips can make your revenue unpredictable. This is especially true in hospitality, retail and food service, making it harder to prove to lenders that you can make steady loan payments.

2. Weak or thin financial reporting: Many owners don't have up-to-date statements, clean bookkeeping or clearly documented "add-backs". These are legitimate, non-recurring expenses that lenders add back into your profit figure to reveal your true debt-servicing capacity. This slows lender decisions and can reduce approved limits.

Common examples include:

One-time legal or professional fees
Non-recurring business development costs
Owner salaries that may be adjusted for analysis
Extraordinary or one-off expenses that won't repeat

3. Collateral and equity constraints: Rising rates and tighter underwriting mean many borrowers now need more owner investment, stronger guarantees or additional security than they anticipated.

4. Rising operating costs: According to the

CFIB Monthly Business Barometer

, businesses are reporting insufficient demand, labour shortages and limited cash flow, compounded by rising insurance, taxes, regulatory expenses, wages and higher-than-normal fuel surcharges.

3 pillars to a stronger funding application

Getting a "yes" from lenders requires a deliberate approach that addresses what lenders care about: clarity, credibility and confidence in your ability to repay. These three pillars form the foundation of a compelling funding application.

Pillar 1 - Credibility: align your story with your numbers.

Prepare:

Current financial statements - don't walk in with just a balance sheet
A clear 12-24 month cash flow forecast
A simple explanation of what's driving your revenue, margins and expenses

In a crowded marketplace, being explicit about what you do matters. Lenders need to understand how your business solves a real problem. Critically, the numbers must align with the ask. When the story, the numbers and the trajectory all point in the same direction, that's when we can confidently press go.

Pillar 2 - Clarity: be specific about the ask.

Be explicit about:

How much you need
Details on what it will be used for
How that translates into growth, stability and repayment capacity.

The clearer your ask, the faster and more confidently a lender can say yes. Come with some quotes and invoices and show how it will drive revenue or increase your margins.

Pillar 3 - Confidence: demonstrate strength beyond the financials.

Show lenders:

Strong personal and business credit history
How you manage customer concentration risk
Key contracts, invoices and letters of intent
A working capital management plan for slower periods

Show us the work you do in your community and how you're building your brand. We need to see your brand strategy and your personal role in driving it. Leverage your local resources and use LinkedIn strategically to build reputation and relationships and meet the people who matter.

“Financials are just the foundation. It's your passion, your credibility and the calibre of people beside you that make the difference."

While understanding what lenders look for is essential for long-term planning, TELUS Business knows that navigating today's economic climate requires immediate, hands-on support. That's why the

#StandWithOwners

program exists, helping champion and lift up scaling companies when they need it most. Keeping these three pillars in mind is the perfect way to sharpen your business narrative when developing your application.

TELUS Business is a proud supporter of Canadian business and has committed close to $7 million to #StandWithOwners since 2020, providing funding, technology and exposure to help owners thrive.

Apply for a chance to win* $125,000 in prizing

to access the tailored tools and resources you need to boost your business growth.

Extending support to diverse founders

Our commitment to supporting business owners is shared by our event partners. To help close the funding gap further, the

Scotiabank Women Initiative

provides women- and non-binary-owned businesses with the capital, advice and networks needed to scale. The program reduces traditional barriers by offering dedicated banking support, flexible lending solutions, financial workshops and access to a community of successful mentors.

As Kirsten explains, "A key part of addressing the funding gap is ensuring entrepreneurs understand what lenders look for and providing the right coaching to build stronger applications. Creating more pathways to capital alongside mentorship and community helps businesses grow with confidence."