What does a merchant cash advance actually cost in Canada?
MCAs are priced using a factor rate, typically between 1.15 and 1.45. A $100,000 advance at a 1.25 factor means total repayment of $125,000. Effective APR varies with the term but commonly ranges from 30% to 90%.
Start an applicationFactor rates are not APRs. A 1.25 factor on a 6-month term implies a much higher effective APR than the same factor on a 12-month term, because the dollar cost is the same but the time-to-repay is shorter.
MCAs are appropriate when (a) speed matters, (b) the use of capital generates ROI greater than the cost, or (c) traditional credit is unavailable. They are not appropriate as long-term working capital.
Voxen Capital's role is to identify whether an MCA is the right instrument and, if so, secure the lowest factor available for the file — and to refinance into cheaper instruments (LOC, term loan) as the business strengthens.
How cost is quoted, by product
Figures are typical ranges for a complete file, not guarantees. Final terms depend on revenue, time in business, credit profile and lender review.
| Merchant Cash Advance (MCA) | Factor 1.15–1.45 |
|---|---|
| Business Line of Credit | ~8–20% APR |
| Invoice Factoring | 1.5–4% of invoice |
| Equipment Financing | ~7–18% APR |
| Bridge Loan | ~10–18% APR |
| Term Loan | ~8–22% APR |
| Inventory Financing | Quoted per file |
| Purchase Order Financing | Quoted per order |
| Acquisition Financing | Stack-dependent |