Comparison

Fixed vs variable remittance: the differences that decide it.

A neutral side-by-side, with the arithmetic, so you can pick the structure that fits.

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The short version

Two advances with the same payback can behave very differently in a slow month. The difference is whether the payment is a fixed amount or a percentage that moves with sales.

Fixed remittanceA set amount debited each business day or each week, regardless of sales.

Variable remittanceA percentage of sales or deposits, so the payment rises and falls.

PredictabilityFixed: easy to budget. Variable: harder to predict but self-adjusting.

Slow monthFixed: the same payment on thin revenue. Variable: a smaller payment.

Strong monthFixed: no faster payoff. Variable: repayment accelerates.

Time to repayFixed: known up front. Variable: depends on sales.

FitsFixed: steady, predictable revenue. Variable: seasonal or uneven revenue.

A worked example

Illustrative arithmetic

A seasonal restaurant depositing about $70,000 a month asks for $30,000 for a patio build. At a 1.25 factor the payback is $37,500, a cost of $7,500. Over roughly 6 months that is about $298 per business day, or close to 9% of monthly deposits.

Total payback on the advance: $37,500.
Cost: $7,500.
Roughly $298 per business day, or about 9% of monthly deposits.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

How to decide

If your sales are stable week to week, a fixed payment is clean and you know the end date.
If revenue swings with weather, events or seasons, variable remittance eases the weak weeks.
If a fixed payment feels tight on a slow week, test it in the affordability calculator.
If you need certainty about the finish date, fixed is the better answer.

Where people go wrong

Assuming variable always costs less. Total payback is set separately.
Choosing fixed to save a little and then straining a slow month.
Not asking what happens if sales fall far below the usual range.

Common questions

Does variable repay slower?

In slow months, yes, and faster in strong ones. The total repaid is the same.

Is there a minimum on variable?

Some agreements include one. Ask.

Can I switch?

Only by amendment or by refinancing into a new agreement.

Keep reading

ComparisonsAdvance vs loan, line, factoring and more Merchant cash advance CanadaHow an advance against future card sales works What it costsTotal payback, cost and comparing structures MCA vs loan calculatorTotal cost against a term loan GlossaryPlain-language definitions

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

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