Side by side

Choose Inventory Financing when

• The capital is specifically for stock, and the stock has a resale market
• You can produce inventory reporting a lender can margin against
• The buy is planned — a season, a container, a volume discount
• Cost matters more than a one-day close

Choose Merchant Cash Advance (MCA) when

• Deposits are strong but the file is not bankable — credit challenges, short history
• The stock is seasonal, perishable, or hard to appraise
• The window closes in days, not weeks
• You want repayment to track sales rather than a fixed schedule

When both make sense

A retailer sometimes starts on an advance because it closes fast, then refinances the position onto an inventory facility once reporting exists — the advance buys the season, the facility makes the next one cheaper.

Running both at once needs care: the advance already takes a share of daily deposits, and an inventory lender will count that draw against the facility it is willing to extend.

Frequently asked questions

Which one is cheaper for buying stock?

Inventory financing, in almost every case where the stock qualifies — the lender holds security with resale value, and the pricing reflects it. A merchant cash advance carries no security in the stock and is priced on deposit risk, which costs more. The advance's edge is access and speed, not price.

My credit is bruised but sales are strong. Which fits?

That is the merchant cash advance profile: approval follows the deposits, not the credit score. If the business also holds standard, resellable stock, it is worth quoting an inventory facility at the same time — security can carry a file that credit alone would not.

Can an advance be refinanced into an inventory facility later?

Frequently, and it is a common path: the advance funds the immediate buy, and once the business can show inventory reporting and a season of turnover, the position is refinanced onto a secured facility at better pricing. Voxen structures that transition as one file rather than two separate applications.

Related

• Chartered bank term loan vs Business Line of Credit — A chartered bank term loan is cheaper and should be your first call if the business is bankable — two or more years of history, clean financials and strong credit.
• Invoice Factoring vs Merchant Cash Advance (MCA) — If the business invoices other businesses, factoring is almost always the cheaper answer — it advances money the business has already earned, priced from 1.5% per 30 days, and creates no debt.
• Term Loan vs Merchant Cash Advance (MCA) — A term loan is the cheaper instrument and the right one whenever the file can carry it — fixed payments, a defined end date, and pricing quoted as an annual rate.
• Equipment Financing vs Term Loan — If the money is going into a specific piece of equipment, finance the equipment.
• Inventory Financing vs Business Line of Credit — A line of credit is underwritten on the business as a whole and can be spent on anything; inventory financing is underwritten on the stock and is used to buy stock.
• Equipment Financing vs Business Line of Credit — Buy the machine on equipment financing and keep the line of credit for working capital.
• Chartered bank term loan vs Invoice Factoring — If your file is bankable — strong credit, two-plus years of history, clean financials — the bank loan is the cheaper instrument and you should pursue it first.
• Chartered bank term loan vs Merchant Cash Advance (MCA) — These sit at opposite ends of the same spectrum.
• RBC Royal Bank business operating line vs Business Line of Credit — If RBC will approve the operating line inside your timeline, take it — the rate on a bank line is lower than anything a non-bank lender can price.
• TD Canada Trust business line of credit vs Business Line of Credit — For a business with filed statements and clean guarantor credit, a TD business line of credit is cheaper than any non-bank alternative and should be the first application.
• Scotiabank receivables-secured operating facility vs Invoice Factoring — A Scotiabank receivables facility is the cheaper way to finance invoices and the right call if your receivables fit a bank margin formula: many customers, none dominant, all under ninety days, all easy to credit-check.
• BMO Bank of Montreal equipment term loan vs Equipment Financing — If BMO will write the equipment term loan and the delivery date allows, take the bank rate — nothing else prices lower on a long-lived asset.
• CIBC business term loan vs Term Loan — A CIBC business term loan is the cheapest way to fund a defined, one-time capital need, and a bankable file should apply there first.
• National Bank of Canada receivables-secured operating facility vs Invoice Factoring — For a Quebec business with a diversified receivables book, a National Bank operating facility is cheaper than factoring and easier to run in French from end to end.
• Desjardins equipment financing through a caisse vs Equipment Financing — If you are an established Desjardins member and the caisse will finance the machine, that is the cheapest capital available and the relationship is worth protecting.
• Vancity business line of credit vs Business Line of Credit — For a British Columbia business whose work fits Vancity's mandate, a credit union line of credit is cheaper than a non-bank facility and worth the application.
• ATB Financial equipment term loan vs Equipment Financing — For an Alberta business buying new equipment, ATB is a genuinely well-matched lender and should get the first quote — provincial focus means the underwriting understands your cycle.

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