Glossary
An authorization allowing a funder to withdraw payments from your business account.
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An authorization allowing a funder to withdraw payments from your business account.
In Canada, a pre-authorized debit (PAD) lets a payee draw agreed amounts from your account on set dates. The agreement defines the amount and schedule.
It is the mechanism that moves the payment, so you should know exactly what you have authorized.
A PAD of $496 on each business day is repaid until the payback is complete.
PADs are governed by payments rules in Canada, and you generally have rights to dispute unauthorized withdrawals. Read the PAD terms alongside the agreement.
A pre-authorized debit is read as a commitment tied to a specific account. Funders confirm the account is the one that receives your deposits, and that the signatory on the PAD matches the business. A mismatch is a common reason files stall at the paperwork step.
A PAD is often read as a blank cheque. The amount and schedule are written into the agreement, and rules on pre-authorized debits give you rights if a withdrawal does not match them.
You can stop a PAD in line with its terms, but doing so may breach the agreement, so speak to the funder first.
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.
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