What is a merchant cash advance?
A merchant cash advance is not a loan. A funder buys part of your future receivables at a discount. As an illustration only, an advance of $20,000 at a factor rate of 1.30 would mean a total repayment of $26,000. There is no interest rate and no compounding. The total payback is fixed from the day you sign.
How it works with Growpath
- Apply. Tell us about your business and how much you need. This usually takes only a few minutes.
- Share recent bank statements. Funders usually ask for the last few months.
- Compare offers. We bring back offers from funders that fit your industry, revenue and credit. Each offer states the total payback, the holdback or the payment, and every fee, in writing.
- Receive the funds. After you sign, the funding partner sends the money to your business bank account. We tell you the expected timing before you sign.
Who qualifies
- A business in Canada or the United States with an operating history
- Steady deposits each month
- A business bank account
- Revenue is considered first. Imperfect credit is often still acceptable.
What it costs
Cost depends on your factor rate and the term. Try the merchant cash advance cost calculator or read Factor rate explained. Always ask for the total payback amount in writing.
Merchant cash advance compared with a bank loan
| Merchant cash advance | Bank term loan | |
|---|---|---|
| How quickly funds may arrive | Funding typically within a few business days, once you have signed | Usually several weeks, depending on the bank's review |
| What the decision is based on | Recent sales and deposits into the business account | Credit history, financial statements and collateral |
| How the cost is shown | A factor rate, which sets one fixed total to repay | An interest rate, often shown as an annual percentage rate |
| How you repay | A share of sales, or a fixed debit, until the total is repaid | A fixed payment, usually once a month |
Read the longer guide, merchant cash advance compared with a business loan.
Industries we work with
We work with restaurants, retail and e-commerce, skilled trades, automotive businesses, salons and spas, and medical and dental practices.
FAQ
Ready to see your options? Start your application or call 778-907-0123. We answer Monday to Friday, 11:00 a.m. to 6:30 p.m., and Saturday, 12:30 p.m. to 6:00 p.m. Pacific Time.