Which Industries Benefit the Most from Merchant Cash Advance?

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, 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. 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.

3. Government business grants

The Canadian government provides an array of business grants designed to help small businesses flourish. 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.

4. 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.

5. Merchant 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.

Most owners searching for a small business loan already know roughly how much they need. The harder questions are whether they qualify yet, and what the payments will do to their cash flow in a slow month. Those answers are rarely on the first screen of a lender's website.

For newer businesses, the first question usually comes down to timing. Driven, formerly Thinking Capital, requires six months in business, a 600+ credit score and $120,000 in annual revenue. Greenbox Capital requires five months. 2M7 reviews applications from businesses that have been operating for three months, bring in $15,000 a month and have no open bankruptcies.

Picture a landscaping company that opened in March. By June it has three solid months of sales and a crew to pay through peak season. Under a six-month rule, it can't apply until September, when the season is winding down and the expenses have already been paid.

Driven offers term loans. 2M7 and Greenbox Capital offer merchant cash advances, which work differently, and the difference is explained further down. Every competitor figure below comes from that company's own website.

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Side-by-side: published requirements and terms

All amounts are in Canadian dollars.

Competitor terms as published on October 18, 2026. Sources: 2M7 merchant cash advance, homepage and application page; Driven; Greenbox Capital homepage and merchant cash advance page.

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Why three months versus six months matters

A six-month rule gives a lender more history to judge. Three months already shows most of what matters, though: how much money comes in, how steady it is from week to week and whether the account stays positive. Bank statements show that more directly than a credit report does.

That history matters most in businesses where the costs come first. A restaurant buys equipment and stock before its first busy season. A contractor pays for materials and crew weeks before the client's first payment clears.

2M7 reviews your statements alongside your industry and time in business. Our Fundability Score™ is separate from bank credit scoring, so bad credit doesn't automatically end an application, and applying typically doesn't involve a hard credit check. Driven requires a 600+ credit score and incorporation. Greenbox sets a 400+ credit score and runs a hard credit check when it makes an offer.

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What the funding costs beyond the advance

Each funder in this comparison describes its cost in a different way, which makes a straight comparison harder than it should be.

Greenbox lists two fees in its funding conditions: a setup fee of 4% of the amount funded ($349 minimum) and a $95 disbursement fee for Canadian businesses. On a $50,000 advance, those two fees total $2,095, separate from the cost of the funding itself. Its merchant cash advance page puts typical factor rates between 1.1 and 1.5.

A factor rate is simpler than it sounds: multiply it by the amount funded. A $50,000 advance at 1.3 means repaying $65,000, whether that takes four months or eight.

Driven prices its term loans from 3.9 cents on the dollar, says it charges no hidden fees and offers lower rates to businesses with credit scores above 750. That figure is a starting price, so your actual cost depends on the rate and term you're offered.

2M7 charges a one-time cost of capital instead of interest. It's quoted for your business specifically, you see the full amount before you sign, and there are no hidden fees on top.

Compare the amount deposited in your account, the total you'll repay and the payment schedule. Published figures like these can't tell you which provider will cost less for your business. Only a written offer can.

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How payments change when sales slow down

This is the part of a funding agreement owners most often underestimate. A fixed daily payment that feels easy in July can be hard to carry in February, especially for seasonal businesses. 2M7 offers two structures.

Flex payments take a set percentage of your daily card and debit sales, between 4% and 30% depending on your agreement. At 10%, a $2,000 day puts $200 toward your balance and an $800 day puts in $80. Because it follows your sales, Flex is only available to businesses that process card and debit payments every day.

Fixed payments take the same amount on schedule, and you know that figure before you sign. They suit businesses with steady revenue that want a predictable number. If sales drop, customers in good standing can call us to request a temporary reduction, subject to our approval.

Greenbox takes payments from daily or weekly card and debit sales and mentions both fixed and flexible schedules, but it doesn't publish the percentage. Driven collects daily or weekly payments over terms of 3 to 24 months and doesn't describe payments that adjust with sales.

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Is a merchant cash advance a loan?

No. With a conventional business loan, you borrow money and repay it on an agreed interest and payment schedule. A merchant cash advance is funding against your future sales, and you pay a one-time cost of capital instead. Ours depends on your industry, location, time in business, number of employees and the amount you receive.

That's also why a factor rate or withholding percentage can't be read like an annual interest rate. The useful comparison is the total dollars you'll repay and how quickly the payments come out. We go into more detail in the difference between a merchant cash advance and a business loan.

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Questions to ask any funder, including us

Before you sign anything, get clear answers to these:

• How much reaches my account after setup, disbursement or other fees?
• What's the total I'll repay, in dollars?
• Will applying or accepting an offer trigger a hard credit check?
• How often are payments taken, and are they fixed or tied to my sales?
• What happens to my payment if sales drop for a month?
• Is there a discount for paying early, and what are the conditions?
• Is there a personal guarantee? "No collateral" doesn't mean "no personal guarantee."
• If I need more funding later, how does a top-up change my current payments?

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Frequently asked questions

Can my business apply for funding after three months?

Yes. Canadian businesses can apply to 2M7 after three months if they bring in at least $15,000 a month and have no open bankruptcies. Approval depends on our review. Driven requires six months and Greenbox Capital requires five.

Can a startup with no revenue get 2M7 funding?

No. 2M7 funds operating businesses with at least three months of history and $15,000 or more in monthly revenue, because the review is based on your actual sales.

How fast does 2M7 fund?

2M7 makes a decision within one business day, and approved funds reach your account within 24 hours. Existing customers can text their rep for a top-up, which is typically paid out within 30 minutes if approved.

Does applying to 2M7 involve a hard credit check?

Applying to 2M7 typically doesn't involve a hard credit check. The review focuses on your bank statements, revenue, time in business and industry.

Does 2M7 charge fees on top of the cost of capital?

No. 2M7 doesn't charge interest or application, origination, documentation or brokerage fees. You pay one cost of capital, and you see it before you sign.

Does paying early reduce my cost?

Yes. 2M7 takes 10% off your remaining balance when you pay early, as long as your account is in good standing and the payment comes from you rather than from another funder.

What happens after I click Check If I Qualify?

You fill out a short form with your contact details, business name, time in business and monthly revenue. A 2M7 funding specialist then calls to verify your details. If you move forward, you'll need three months of bank statements, photo ID and a void cheque.

Do 2M7 payments drop when my sales drop?

With Flex payments, yes. The amount collected is a percentage of daily sales, so it falls on slower days. With fixed payments, the amount stays the same unless you ask for a temporary reduction and 2M7 approves it.

Check whether your business qualifies

Since 2008, 2M7 has issued more than $650 million to over 5,000 Canadian businesses, and about 80% of our customers come back for additional funding. We're a direct funder rather than a broker, so the money comes from our own account and you deal with the people making the decision.

If you've been operating for at least three months and bring in $15,000 or more a month, the first step is a short form with your contact details and basic business information. Have three months of bank statements, photo ID and a void cheque ready for the next step.

Check If I Qualify

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Most business owners think cost control means cutting corners. It doesn't. It means paying closer attention to where money actually goes and closing the gaps that quietly drain a business month after month. Every dollar you keep is a dollar you don't have to borrow, and every dollar you borrow at a high rate is a dollar working against you before it even hits your account.

Canadian small business owners are operating in a tighter environment than a few years ago. Supply costs have climbed, labour is more expensive to retain, and customers are pickier about where they spend. According to the Federal Reserve's Small Business Credit Survey, rising costs are the top financial challenge reported by small firms, cited by 75 percent of them, and more than half say they struggle just to cover operating expenses or manage uneven cash flow. That survey covers American firms, but the pattern holds true north of the border as well. Costs rise faster than owners expect, and the businesses that survive are the ones that build habits around watching them closely.

Know Your Real Break-Even Number

A lot of owners know their revenue targets but not their true break-even point once every fixed and variable cost is accounted for. If you don't know that number cold, you're guessing at pricing, guessing at how much slack you have in a slow month, and guessing at whether a new hire or piece of equipment actually pays for itself. Sit down quarterly, not annually, and recalculate it. Costs shift faster than most owners update their spreadsheets.

Audit Recurring Expenses Twice a Year

Subscriptions, software licenses, insurance policies, and vendor contracts have a way of renewing quietly at higher rates. A retail shop paying for three overlapping point-of-sale add-ons, or a trucking company carrying insurance riders it no longer needs, is losing money to inertia rather than necessity. Block time twice a year to go through every recurring charge and ask whether it's still earning its keep. Cancel what isn't, renegotiate what is.

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Watch Labour Costs Without Cutting Corners on Staff

Labour is usually the largest controllable cost for restaurants, retail, and construction and contracting businesses. The fix isn't fewer hands, it's better scheduling. Overstaffing during slow periods and scrambling during peak ones both cost money, just in different ways. Track hours against actual sales patterns rather than habit, and you'll usually find five to ten percent of labour spend that isn't tied to real demand.

Negotiate With Suppliers Like You Mean It

Too many owners accept the first price a supplier quotes and never revisit it. Long-standing vendor relationships are valuable, but loyalty shouldn't cost you money you don't have to spend. Ask for volume discounts, ask about early-payment terms, and get quotes from at least one competitor annually even if you have no intention of switching. Suppliers move on price when they know you're paying attention.

Fix Cash Flow Timing Before It Fixes You

A profitable business can still run into trouble if money comes in slower than it goes out. Research from the JPMorgan Chase Institute found that the median small business holds only 27 cash buffer days, meaning it could survive less than a month without incoming revenue. That's an American figure too, but the underlying lesson translates directly: most businesses are operating with almost no margin for a bad month, which is exactly why trimming avoidable costs matters as much as growing revenue.

Tighten invoicing timelines, follow up on late payments faster than feels comfortable, and consider deposits for larger jobs, something contractors in particular underuse. The goal isn't just profitability on paper, it's having cash on hand when a bill comes due.

Rethink How You Finance Growth

Cost control isn't only about spending less, it's also about borrowing smarter. A business with bad credit or thin financials often assumes a bank loan is the only option, then gets discouraged when the application drags on for weeks and still comes back denied. That delay itself is a cost. Time spent waiting on a bank is time a competitor spends serving your customers.

This is where alternative funding options like a merchant cash advance can outperform traditional small business loans, particularly for restaurant owners managing seasonal swings, retail operators needing inventory before a busy season, or trucking companies covering a maintenance bill that can't wait. Fast business funding based on your actual cash flow, rather than a rigid credit score cutoff, means you're not stuck choosing between missing an opportunity and taking on financing that doesn't fit your business.

Build a Habit, Not a One-Time Fix

The businesses that consistently lose less money aren't the ones that did one big cost-cutting exercise and called it done. They're the ones that treat expense review as a routine, the same way they treat inventory counts or payroll. Set a recurring calendar reminder. Assign someone  on your team to own it if you can't. Small, consistent attention beats a single dramatic overhaul every time.

Get the Right Financing Partner in Your Corner

Cutting costs only gets you so far if your financing structure is working against you. At 2M7, we've spent over a decade helping Canadian business owners, including those with bad credit, access merchant cash advances and fast business funding built around how their business actually earns money, not around a rigid checklist. Contact 2M7 today!