Merchant Cash Advance
Merchant cash advance, priced from live revenue data
A merchant cash advance is a purchase of future receivables, not a loan. CanFund prices each advance from connected card processing and bank deposit history, then collects a fixed percentage of revenue until the purchased amount is delivered.
- Amount
- $5,000 – $750,000
- Term
- 3 – 18 months estimated delivery
- Factor rate
- 1.15 – 1.49 factor rate
- Speed
- Decision in minutes, funding in 1 business day
Underwriting
How merchant cash advance is underwritten and priced
What the model reads
Twelve months of deposit history, card processing volume by settlement batch, deposit frequency, negative-day counts, and existing position schedules. Volatility is measured across weekly windows rather than a single monthly average.
How the factor rate is set
The factor rate is a multiple applied to the funded amount. It moves with revenue stability, time in business, and industry chargeback behavior — not with a posted rate card. A stable, high-frequency deposit pattern prices lower than the same revenue delivered in irregular lumps.
How remittance is sized
The holdback percentage is set so estimated delivery falls inside the modeled term at current volume. If revenue declines, the dollar amount collected declines with it; the total purchased amount does not change.
Mechanics
How the structure operates, step by step
- 01
Receivables purchased
You sell a specified dollar amount of future revenue at a discount. The discount is expressed as a factor rate.
- 02
Holdback set
A fixed percentage of daily or weekly revenue is designated for remittance, typically between 5% and 20%.
- 03
Remittance runs
ACH debits run on the agreed daily or weekly cadence and are reconciled against settled processor batches.
- 04
Delivery completes
Collection stops when the purchased amount is delivered in full. There is no interest accrual and no penalty for faster delivery.
Eligibility snapshot
What qualifies for this product
- Time in business
- 6+ months
- Monthly revenue
- $15,000+
- Personal credit
- 500+ FICO
- Business bank account
- Required; 3 months of statements
- Industries
- Most; restricted list applies
Criteria are directional, not absolute. Files near a threshold are reviewed by a credit analyst. Average decision time across products is 4m 12s.
Restaurants, clinics, contractors, and online sellers — funded every day.
Questions
Merchant Cash Advance questions, answered directly
- How is a merchant cash advance different from a business loan?
- A merchant cash advance is the purchase of future revenue at a discount, while a business loan is borrowed principal repaid with interest over a fixed schedule. An advance has no fixed maturity date and no interest rate; it has a factor rate and a revenue-based holdback, so the dollar amount collected each period rises and falls with sales. A loan payment stays the same regardless of what the business earns that week.
- What is a factor rate and how does it differ from APR?
- A factor rate is a multiple applied to the funded amount to determine the total amount to be delivered. A 1.30 factor rate on $50,000 means $65,000 is delivered in total. Unlike APR, a factor rate does not change with time, so paying an advance off faster does not reduce the total cost. Because of that, factor rates and APRs are not directly comparable without converting for the estimated delivery period.
- What happens if revenue drops during the advance?
- Because remittance is a percentage of revenue rather than a fixed installment, the dollar amount collected falls automatically when sales fall. The estimated delivery period lengthens, but the total purchased amount stays the same. Businesses with a sustained decline can request a reconciliation review, which adjusts collections to the contracted percentage of actual settled revenue.
- Does applying for a merchant cash advance affect my credit score?
- The initial review uses a soft credit pull, which does not affect your score. A hard pull may occur only at final approval and only with your consent. Bank data comes from the statements you upload — we never ask for online banking credentials.
More questions are answered on the full FAQ.
Related products
Get a priced merchant cash advance offer
Connect a business bank account to see structure, cost, and total dollar obligation before signing anything.