If you’re a Canadian small business owner like me, you know how tough it can be to get funding from traditional banks. Between long wait times, loads of paperwork, and strict credit requirements, it can feel like you’re stuck in a never-ending loop. That’s where companies like Clara Capital come in. I recently explored their services, and here’s my honest take — no fluff, just what I wish I knew before applying.
What Is Clara Capital?
Clara Capital is a Canadian alternative lender that provides fast business financing for small and medium-sized enterprises (SMEs). They’re not a bank, which means they have more flexible lending criteria. They offer short-term business loans, working capital, and merchant cash advance (MCA)-style funding.
Their application process is fast — I got a response within 24 hours — and they mainly focus on your monthly sales rather than just your credit score. That was a game-changer for me since my credit wasn’t perfect at the time.
What We Liked
✅ Speedy Process – It took less than 10 minutes to apply, and I had an offer the next day. If you need cash quickly to cover inventory, payroll, or a short-term expense, that speed is incredibly helpful.
✅ Flexible Requirements – Unlike banks, Clara doesn’t require you to be in business for years or have amazing credit. If your business has steady monthly sales, you’ve got a shot.
✅ Transparent Communication – I had a direct line to a real person (shoutout to Dave from their support team) who walked me through every step.
What We Didn’t Love
⚠️ Repayment Frequency – Most offers come with daily or weekly repayments, which can be tough on your cash flow if you’re not used to that.
⚠️ Costs Can Add Up – The rates are higher than traditional lenders (banks and credit unions)— no surprise here though as you probably know this is a “subprime lender”. Make sure to ask for a full cost breakdown before signing anything.
⚠️ No True Line of Credit – They offer lump-sum and MCA-type products, but unlike lenders like Journey Capital, Clara doesn’t offer a revolving line of credit (at least not yet).
Clara Capital vs Other Business Loans
If you are curious how Clara Capital compares to other small business lenders in Canada, check out this table:
| Feature / Lender | Clara Capital | Journey Capital | Merchant Growth | Driven Financial |
|---|---|---|---|---|
| Loan Types | Working Capital, MCA | Term Loans, Flex Funds, Line of Credit | Term Loans, MCA, Line of Credit | MCA, Term Loans |
| Loan Amount | $5,000 – $250,000 | $5,000 – $300,000 | $5,000 – $500,000 | $5,000 – $300,000 |
| Time to Funding | 24–48 hours | As little as 24 hours | 24–48 hours | 1–2 business days |
| Minimum Credit Score | No strict minimum | 600+ | 550+ | 550+ |
| Repayment Frequency | Daily or weekly | Daily/weekly/monthly options | Daily or weekly | Daily or weekly |
| Line of Credit Available | ❌ | ✅ True revolving line | ✅ (not revolving) | ❌ |
| Online Portal | ✅ Limited dashboard | ✅ Full portal access | ✅ | ✅ Dashboard access |
| Customer Reviews | 4.5/5 (Google, Trustpilot) | 4.8/5 (Google, Trustpilot) | 4.5/5 (Google, Trustpilot) | 4.6/5 (Google) |
Frequently Asked Questions about Clara Capital
🤔 What is Clara Capital?
Clara Capital is a Canadian alternative business lender offering small to medium-sized businesses access to short-term financing. They provide term loans and merchant cash advances with flexible requirements.
💵 What types of funding do they offer?
Clara Capital offers working capital loans, short-term business loans, and merchant cash advances. These are typically unsecured, and repayment terms range from a few months up to 24 months.
📉 What are their interest rates like?
Rates vary depending on your business’s credit profile and cash flow. As with most alternative lenders, expect higher rates than banks—usually in the 12% to 30% range.
📆 How fast can I get funding?
Funding can be approved and deposited within 1 to 3 business days, depending on the completeness of your application and the underwriting review.
📋 What documents do I need to apply?
Generally, you’ll need to provide 3 to 6 months of bank statements, basic business info, and a void cheque. They may also request a photo ID or proof of business registration.
🔒 Does applying hurt my credit?
Clara typically runs a soft credit check during the pre-approval process, which won’t impact your score. A hard inquiry might be made if you proceed to final funding.
💬 Is Clara Capital a broker?
No — Clara Capital is a direct lender, which means they fund the loans themselves. You’re not being passed off to a third-party lender, which helps speed things up and reduce fees.
🚫 Are there any hidden fees?
Like any lender, fees may apply — especially for missed payments or early repayment. Always ask for a breakdown of fees in writing before you sign anything.
🌐 Is Clara available across Canada?
Yes. Clara Capital provides funding to businesses in most Canadian provinces, but availability may vary depending on local regulations and business type.
✅ Who is Clara best for?
Clara is best for business owners who need fast access to funds, don’t qualify for bank loans, and are comfortable with short-term repayment and potentially higher costs.
Final Verdict
If you’re looking for fast and flexible funding — and you’re okay with the higher cost of capital — Clara Capital can be a great option. I wouldn’t recommend it for long-term investments or low-margin businesses, but it’s solid for short-term cash flow needs, marketing pushes, or seasonal expenses.
That said, if you’re looking for a revolving line of credit or dual product offers (like a loan + line of credit combo), Journey Capital might be better for you. I personally use both depending on the situation, but it’s always worth comparing options.
Pro Tip: Always get at least two quotes and read the fine print — especially around fees, repayment terms, and early repayment penalties.
Mark Turner is a retired financial writer that now enjoys blogging about different financial topics, such as commodities, inflation, debt, retirement, alternative investments and Canadian politics.
