A merchant cash advance gets working capital into your business in hours, not weeks, and you repay it as a share of your sales rather than in fixed monthly instalments. That makes it fast and flexible. It also makes it more expensive than a bank loan, so the honest question is not whether you can get one, but whether it is the right tool for what you need.
We fund Canadian businesses with merchant cash advances every day, so this page tells you how ours actually works: what it costs, who qualifies, how fast the money lands, and the situations where you would be better off with something else. Including, sometimes, something other than us.
What a merchant cash advance is
An MCA is not a loan. We advance you a lump sum today and buy a portion of your future sales at a discount. You repay automatically as a percentage of your daily or weekly card sales, so when business is busy you repay faster, and when it is slow you repay less. There is no fixed monthly payment to find and no fixed end date. The repayment flexes with your revenue.
That structure is what makes an MCA suit businesses with steady card sales but uneven cash flow. Restaurants, shops, salons, auto shops, seasonal businesses. The kind of business a bank often struggles to serve.
How much you can get, and what it costs
We fund advances from $10,000 to $300,000. The amount depends on your sales volume, because repayment comes out of those sales. As a rough guide, most businesses can access somewhere between one and two times their average monthly card sales.
The cost is set by a factor rate, not an interest rate, and ours runs from 1.1 to 1.5 depending on our assessment of your business. Here is what that means in plain terms, because too many providers leave it vague. A factor rate of 1.3 on a $25,000 advance means you repay $32,500 in total. The $7,500 difference is the cost of the capital. If your card sales run around $3,000 a day and we collect 10% of them, you would repay roughly $300 a day, clearing the advance in about five months. Those figures are illustrative, not a quote, but they show you the shape of the deal before you ever apply.
A factor rate is not the same as an APR, and comparing the two directly will mislead you. If you want to understand exactly how factor rates work and how to compare the true cost against other funding, our plain-English guide to factor rates walks through it.
How do I qualify?
The bar is deliberately low, because we weigh your recent business performance more heavily than your credit history. There are three requirements:
- In business for at least 6 months
- Gross monthly revenue above $15,000 for 4 consecutive months
- Credit score over 500
A patchy credit file a few years back does not rule you out. We are looking at how your business is performing now.
What documents you need
We keep the paperwork light. To apply you need a signed application, your last 4 months of business bank statements, a void cheque, and ID. That is it. No business plan, no forecasts, no mountain of forms.
How fast can I get the money?
Once you have sent your funding specialist the required documents, your business is typically funded within 8 to 24 hours. The bottleneck is almost always getting the documents in, not our decision, so the faster you send them, the faster you are funded.
When a merchant cash advance is NOT right for you
Here is the part most funders leave out. An MCA is the wrong tool in several situations, and signing you up anyway would not be doing you a favour.
If your business does not take steady card or daily sales, there is nothing for the repayment to flex against, and an MCA will not fit. If your margins are very thin, the factor cost sits on top of already-slim profit and can hurt more than the cash flow gap it solves. If you need money for a long-term investment that will take years to pay back, the short repayment window of an MCA makes it an expensive way to fund it. And if your credit and trading history are strong enough to qualify for a bank loan or line of credit, that will almost always be cheaper, and you should use it.
There is one case where the fix is still us, just a different product. If your business is healthy but you take payment by cash, cheque, or bank transfer rather than card, a standard card-based MCA will not work. A business cash advance solves that, because it considers all your incoming revenue, not just card terminal sales. Same speed, same flexibility, built for businesses that do not run on card payments.
How it compares to other funding
Most people weighing an MCA are comparing it against something else. Here is the honest version.
Against a bank loan or line of credit, an MCA is faster and far easier to qualify for, but more expensive. If you can wait weeks and you qualify, the bank is cheaper. If you need cash this week or the bank has said no, the MCA earns its cost.
Against invoice factoring, the difference is how you get paid. Factoring suits B2B businesses that invoice clients and wait 30 to 90 days for payment. An MCA suits businesses paid at the point of sale by card. If you invoice rather than take card payments, factoring is likely the better route, and our comparison of the Canadian factoring companies will help you choose one.
Against a business cash advance, the only real difference is what counts as repayable revenue. MCA uses card sales. Business cash advance uses all incoming payments. If you are mostly card-based, the MCA fits. If not, the business cash advance does.
Common questions
Is a merchant cash advance a loan?
No. It is the sale of a portion of your future sales at a discount, not borrowing against a fixed interest rate. That is why there are no fixed monthly payments and no set end date.
Can I get one with bad credit?
Often yes. We need a credit score over 500, but we weigh recent business performance more heavily than credit history. Strong, steady sales matter more here than a clean credit file.
How is repayment taken?
As a percentage of your daily or weekly card sales, collected automatically. Busy periods repay faster, slow periods repay less. You do not write a cheque each month.
What can I use the funds for?
Anything legitimate for the business. Wages, supplier payments, equipment, repairs, inventory, marketing, covering a seasonal gap. There are no restrictions on use.
How much will it cost me?
Your total repayment is the advance multiplied by your factor rate, which for us runs from 1.1 to 1.5. On a $25,000 advance at a factor rate of 1.3, you would repay $32,500. We tell you the full cost before you agree to anything.