Merchant Fund Express
(305) 384-8391Apply
Home / Canada / Answers / What happens to my advance if I sell my business?

Answers

What happens to my advance if I sell my business? A plain answer.

Usually the advance must be paid off at or before closing, or assumed by the buyer with the funder's written consent. Most agreements require notice of a sale. Ask for a payoff letter early so the amount can be built into the deal.

Apply NowDo I Qualify?

✓ Checking what you qualify for does not affect your credit score.

PlainAnswers
CanadaSpecific
CADExamples in
500+Scores considered

What happens to my advance if I sell my business?

Usually the advance must be paid off at or before closing, or assumed by the buyer with the funder's written consent. Most agreements require notice of a sale. Ask for a payoff letter early so the amount can be built into the deal.

Key facts

  • Most agreements require notice of a sale
  • Payoff at closing is the most common route
  • Assumption by the buyer needs written consent
  • The security registration must be discharged

Related: Business Funding Answers for Canadian Owners · Business Funding Requirements in Canada · What Business Funding Costs in Canada, Compared · Documents Needed for Business Funding in Canada · Merchant Cash Advance Canada: How It Works and Costs

What agreements usually say

Funding agreements commonly treat a sale of the business, or of substantially all its assets, as an event requiring notice and often payoff. The funder's registration against the business also has to be discharged for the buyer to take clear title to the assets. Selling without dealing with the advance can put the seller in breach and trigger the personal guarantee.

Options

Practical steps

  1. Read your agreement's sale and assignment clauses.
  2. Tell your lawyer about the advance early.
  3. Request a payoff letter dated for the expected closing.
  4. Arrange for the registration discharge to be filed at closing.

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

When should you raise the advance with a buyer?

Early, ideally in the letter of intent. Buyers and their lenders will find the security registration in their searches anyway, and an unexpected payoff late in the process can delay closing or reduce the price.

Request a payoff letter with a per-diem or good-until date, and have your lawyer include it in the closing statement so the funder is paid and the registration discharged on the same day.

Sources and review

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

Common questions

Can the buyer take over my advance?

Only with the funder's written consent.

Will paying off early save money?

Only if the agreement has an early payoff discount.

What if the sale falls through?

The agreement continues as before.

Keep reading

Merchant cash advance CanadaHow an advance against future card sales worksRevenue-based financing CanadaRepay a fixed multiple as a share of revenueFunding requirementsTypical starting points for Canadian filesEarly payoffWhat to ask for before you pay aheadIs a PPSA registration the same as a UCC filing?They do the same job in different countries. In the United States, funders file UCC financing statements. In Canada, security interests in business assets are registered under each province's personal property security legislation (Quebec uses its own register of personal and movable real rights). Either way, the registration publicly records a funder's claim.

Educational information only. It is not legal, tax or accounting advice.

See what you qualify for

Same-day decision. Applying takes a few minutes and will not affect your credit score.

Apply Now →
Apply NowCall