How to Attract Customers to Your Store in 2021

When the Tool Has to Fit the Business, Not the Other Way Around

At some point, almost every small business owner in Canada has looked at a business loan and felt the gap between what the bank wants and what their business actually looks like. Too short a history. Too small an ask. Too little collateral. Too much paperwork for too slow a process. The loan was designed for a different kind of business, and you were left to figure out something else.

That something else, for a growing number of Canadian business owners, is a merchant cash advance.

This is not about settling for a second option. In a lot of situations, a merchant cash advance is simply the better tool. Understanding why starts with understanding what most business loans are actually built for.

Business Loans Were Not Designed With You in Mind

Traditional business loans are structured around large capital needs, extended approval timelines, and borrowers who can prove years of consistent financial history. Many institutional lenders will not begin a conversation below a certain loan threshold, often $100,000 or more. If you need $30,000 to cover a cash flow gap between two contracts, or $50,000 to lock in a supplier discount before it expires, it helps to understand what alternatives to a business loan actually exist before assuming a traditional loan is your only path. 

The qualification requirements compound the problem. Banks want detailed business plans, multiple years of financial statements, personal guarantees, and often collateral. For a business that is six months old and generating solid monthly revenue, that history simply does not exist yet. The bank sees risk where the business owner sees momentum.

A merchant cash advance evaluates different signals entirely. Providers look at your actual sales volume, typically your credit and debit card transaction history, and use that to determine what you can reasonably receive and repay. The business you have built is the application. You are not being asked to prove what you might eventually become.

Repayment That Moves With Your Business

One of the most significant differences between a business loan and a merchant cash advance is how repayment works. A loan comes with a fixed monthly obligation. It does not matter whether November was your quietest month in three years or whether a large receivable is still outstanding. The payment is due, and it is the same number it was last month.

A merchant cash advance repays as a percentage of your daily sales. When business is strong, more gets remitted and the advance gets paid down faster. When business slows, the remittance drops accordingly. Your obligations shrink with your revenue and recover when revenue does.

For businesses that operate with any kind of seasonal pattern, this distinction is not a minor detail. A retailer carrying inventory into the holiday season, a contractor waiting on a draw schedule, a restaurant navigating the stretch between summer and fall: all of these businesses face months where a fixed loan payment creates real strain. The flexible structure of a merchant cash advance removes that strain, replacing it with a repayment rhythm that reflects how the business is actually performing.

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Accessible When You Are Just Getting Started

The businesses that most need capital are often the ones traditional lenders are least willing to fund. A business that has only been operating for a few months does not yet have the credit history or financial documentation that banks require. That does not mean the business is not viable. It means the track record has not accumulated yet.

Merchant cash advances are accessible to Canadian businesses that have been operating for as little as three months and are generating consistent monthly revenue. The bar is set around what you are doing now, not what you were doing two years ago. For newer businesses already gaining traction, that is a meaningful difference.

It also means that an MCA can be used proactively, before a cash gap turns into a crisis. Business owners who understand their financing options ahead of time are the ones who can move quickly when a real opportunity appears: hire before the busy season, lock in inventory pricing, or cover a short-term gap without pulling from personal funds or slowing operations down.

No Hidden Fees, No Runaround

One of the quieter frustrations with traditional lending is that the real cost of a loan often does not become clear until you are already committed to it. Fees buried in fine print, penalties for early repayment, and compounding interest structures make it difficult to know upfront what you are actually agreeing to.

2M7's approach is different, and that commitment is not just marketing. You see what you will pay before you sign, and that is all you pay. No prepayment penalties, no hidden fees, no financial gibberish. For a business owner trying to make a clear-eyed decision about capital, that transparency matters.

The Right Tool for the Right Moment

A business loan has its place. For large, long-horizon capital investments where extended repayment timelines make sense, it can be the right answer. But for the specific pressures most small businesses in Canada actually face, tight cash flow windows, seasonal cycles, growth that is moving faster than receivables, a merchant cash advance is built closer to the shape of the problem.

If you want to understand what an advance might look like for your situation, 2M7 is ready to walk through it with you.

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The business world has been turned upside down in the last few months, which has led to many questions for business owners. One of the most pressing has been about finances. In the current global climate, you may wonder what options you have to keep cash flowing. As it turns out, you have quite a few choices. The question is more about which options will work best for your business. There are quite a few reasons merchant cash advance and working capital loan could be the right fit.

What is Merchant Cash and Working Capital Loan?

‍Merchant cash and working capital loan refers to business financing options available to merchants on the basis of their future sales. It includes tools like merchant cash advances.A merchant cash advance, for example, is estimated on your future sales. The lender offers you cash to help you keep the business operating by estimating what your future sales are likely to be. Unlike a business loan, this option can be quite flexible as a result.

Why Choose Merchant Cash and Working Capital Loan?

‍Why are options like merchant cash advances so popular? One reason is that they provided the flexibility small businesses need.Since the advance is estimated on future sales, you pay the advance as you earn those sales. That means your payment can vary. If you have high sales, you can pay the advance down faster. If your sales are low, you won’t have to struggle to meet a high payment.The amount of the advance can also be variable. It’s also a great option for businesses that need ongoing cash injections. It also works for newer businesses or businesses that need smaller loan amounts.If any of this sounds like your business, then it could be time to discover what a merchant cash advance can do for you. Get in touch and find out if this option fits your business’s needs.

There is a wide array of services available to businesses in Canada seeking to bolster their cash liquidity. This article will explore some of the most popular options, as well as their best use cases. These financial solutions typically include a combination of bank loans, CEBA loans, government business grants, factoring, cash advances, payday loans, and microloans.

Businesses can utilize these financial options to optimize growth, gain liquidity, bridge emergency situations, or capitalize on opportunities.

Let's delve into our options:

1. Traditional bank loans

This is the most conventional form of financing that small businesses can utilize to obtain Typically, these loans are secured by collateral, and may offer lower interest rates, making them an appealing choice for businesses with strong credit. However, small and medium-sized businesses adhering to conservatism and GAAP principles might have lower perceived financial strength, which can make obtaining traditional financing more challenging, especially if the bank relies on financial statements as part of its due diligence process. This can be particularly problematic for new startups and businesses without a significant financial track record. Furthermore, liquidity provided might be limited if a business is relatively new or experiencing volatility, even with collateral in place.

2. CEBA loans

The Canada Emergency Business Account (CEBA) loans are interest-free loans of up to $60,000 designed for small businesses impacted by the COVID-19 pandemic. These loans are 100% backed by the government and do not require any collateral. Businesses can use these loans to cover operating expenses such as payroll and rent, as well as for purchasing equipment or expanding their operations. The CEBA loans offer flexibility and accessibility with a few caveats. Firstly, the loan forgiveness repayment date has been extended to December 31, 2023, for CEBA loan holders in good standing. This means that loan holders may have to start repaying their CEBA loans as early as 2024. Secondly, eligibility is only applicable to businesses that have had an active business account with their financial institution as of March 1, 2020, and can demonstrate a decline in revenue due to the pandemic.

3. Factoring

Factoring enables businesses to sell their accounts receivable (invoices) to a third-party (a factoring company) at a discount. The factoring company then acts as the agent to collect payments from the invoice customer, providing the business with liquidity (cash) based on a certain percentage of the invoice amount. Factoring can significantly improve cash flow for small and medium-sized businesses by offering liquidity and quick access to funds. It is also helpful that the factoring company will be the one taking care of ensuring invoices are paid, freeing up valuable resources for small businesses.

4. Government business grants

The Canadian government provides an array of business grants designed to help small businesses flourish and These grants typically target specific industries or business activities, such as clean technology, innovation, workforce development, and international trade, among others. A considerable number of grants currently emphasize research, development, and exporting. The application process for these grants can be intricate, requiring well-prepared grant proposals that effectively communicate the business's objectives, anticipated outcomes, and potential impact. This process is often competitive, as numerous businesses vie for the limited funding available. Newer businesses or those without prior grant writing experience may find this process daunting, and may benefit from seeking professional grant writing assistance or collaborating with experienced partners in their industry. Despite the challenges, securing a government grant can be a game-changer for small businesses, providing essential funding without the burden of repayment, and fostering growth, innovation, and competitiveness in the marketplace.

5. Payday loans or Microloans

Payday loans and microloans are small, short-term loans that are typically utilized to address unexpected expenses or navigate temporary cash flow gaps. While these loans may not be suitable for long-term financing needs due to their relatively higher interest rates and fees, they play a vital role in providing financial support during emergencies. By offering quick access to funds, payday loans and microloans help businesses remain afloat and operational during challenging times, allowing them to successfully weather temporary cash flow issues that are anticipated to improve in the near future. This targeted financial assistance can be a lifeline for businesses, enabling them to maintain stability and continue serving their customers as they work towards recovery and growth.

6. Cash Advance

A cash advance, particularly in the form of a Merchant Cash Advance (MCA), is an innovative financing solution that provides businesses with a lump sum of cash in exchange for a percentage of their future sales (typically credit card sales). Cash advances and MCAs can be exceptional financing options for businesses that need funds swiftly or require increased liquidity to seize opportunities that demand prompt. One of the key advantages of this financing option is its speed and flexibility. Cash advances can be processed more quickly than traditional loans, often within a matter of days, allowing businesses to address their financial needs without delay. Additionally, repayment terms are tailored to the business's sales volume, making it a more manageable solution for businesses with fluctuating revenues. MCAs are particularly valuable for new businesses and small enterprises that may face challenges in obtaining traditional bank loans due to a lack of financial history, inadequate financial book strength, or a dearth of collateral. By offering an alternative financing avenue, cash advances empower these businesses to overcome financial barriers and pursue their growth objectives. Ultimately, the various financing options available to Canadian businesses each have their own strengths and specific use cases. Traditional bank loans can be attractive for businesses with strong credit, while CEBA loans offer interest-free financing for those affected by the COVID-19 pandemic. Factoring provides immediate liquidity to businesses with outstanding invoices, and government grants can support targeted industries and activities. Payday loans or microloans can assist in managing short-term cash flow gaps. And cash advances offer rapid access to funds for businesses lacking financial history or collateral. The choice of financing option will depend on the unique needs and circumstances of each business. By understanding the advantages and limitations of each option, businesses can make informed decisions about the most suitable financing solution to support their growth, liquidity, and success.