Glossary
The average cost to win a new customer.
✓ Checking what you qualify for does not affect your credit score.
Short answer: Customer acquisition cost is the average cost to win a new customer: marketing and sales spend divided by new customers in the same period. Spending $10,000 to win 125 customers is a CAC of $80. It decides whether marketing paid for with growth funding will earn back its cost in time.
Key facts
Related: Business Funding Glossary: 70 Terms Explained · Factor Rate Explained: How MCA Pricing Works · What Business Funding Costs in Canada, Compared · Business Funding Comparisons for Canadian Owners · Business Funding Calculators in Canadian Dollars
The average cost to win a new customer.
CAC is marketing and sales spend divided by new customers in a period.
It decides whether growth funding pays back.
$10,000 spent to win 125 customers is a CAC of $80.
Used to judge marketing spend.
Reviewers do not need CAC but it supports marketing requests.
A low CAC with high churn may still not pay back.
Glossary terms are most useful next to the decisions they affect. If you are comparing offers, read the pages on factor rates, payback amounts and the repayment cap together. If you are preparing an application, the documents checklist and requirements pages explain what is read. And if a term in an agreement is unclear, ask the funder to explain it in writing before you sign; a good funder will.
CAC should be compared with the gross profit a customer generates over their lifetime. A common rule of thumb is that lifetime gross profit should comfortably exceed CAC, and that payback should be well within a year for funding-backed growth.
CAC is calculated from your marketing and sales spending, which appears in bank statements as payments to ad platforms, agencies and sales staff, and from the number of new customers in your sales system. Funders rarely ask for it, but having it ready strengthens any request to fund marketing.
Most funding terms come back to two questions: how much will I repay in total, and how will each payment affect my cash in a normal month and a slow one. When you meet an unfamiliar term in an offer or agreement, translate it into those two answers before deciding whether it matters. If a funder cannot explain a term in plain language and with your own numbers, treat that as useful information about the offer.
These terms often appear alongside customer acquisition cost (cac) in offers, agreements and conversations with funders:
Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.
It shows whether marketing funded by an advance can repay it.
See the related guides and the comparison pages, or apply and ask.
No. It is educational information, and agreements vary.
Educational information only. It is not legal, tax or accounting advice.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
