Answers

Can I use business funding to pay the CRA? A plain answer.

Yes. Many businesses use working capital to clear GST/HST, payroll source deductions or corporate tax owed to the Canada Revenue Agency. Funders will want to know about the arrears, because unpaid remittances can lead to CRA collection action that takes priority. Disclose the amount and any payment arrangement.

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Can I use business funding to pay what I owe the CRA?

Key facts

Unremitted GST/HST and source deductions are treated as trust funds
A CRA requirement to pay can redirect money from your account
Modest arrears cleared by an advance can strengthen a file
Active CRA collection narrows options

Why CRA debt matters to funders

The Canada Revenue Agency has strong collection powers. It can issue a requirement to pay that redirects money from your bank account or customers, and unremitted source deductions and GST/HST are treated as funds held in trust. A funder reading your file needs to know whether CRA could take money that would otherwise go to repayment.

If the arrears are modest and the advance clears them, that can actually strengthen the business. If CRA has already started collection action, options narrow.

How to present it

State the amount owed and what it is for: GST/HST, source deductions or income tax.
Include any payment arrangement letter from CRA.
Show how the advance will be used to clear or reduce the balance.
Keep current filings up to date so new arrears are not building.

Keeping it from happening again

Set aside GST/HST and payroll deductions in a separate account as revenue arrives. Many Canadian owners fall behind simply because tax money sits in the operating account and gets spent.

Where Canadian files usually start

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

If your question is about your own file rather than the general rule, the fastest route to a specific answer is a review. Send a signed application and your last four months of business bank statements, mention this question in a note, and the response will address it directly. You can also call (305) 384-8391 and ask before applying; there is no cost to ask.

Questions owners ask next

Sources and review

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

Will CRA arrears get me declined?

Not necessarily. Modest, disclosed arrears with a plan are often workable.

Can the funder pay CRA directly?

Sometimes part of the advance is directed to clear specific obligations. Ask.

What if CRA has frozen my account?

That makes funding very difficult until resolved. Speak with CRA and an advisor first.