Guide
Before taking on a new payment, know how much revenue the business needs to cover all costs. A break-even calculation takes an afternoon and prevents expensive mistakes.
✓ Checking what you qualify for does not affect your credit score.
Short answer: Split costs into fixed and variable, work out the contribution margin as the share of each sales dollar left after variable costs, then divide fixed costs by that margin. With $24,000 of monthly fixed costs and a 40% margin, break-even is $60,000 a month. Add the new payment to fixed costs and recalculate.
Key facts
Related: Practical Business Funding Guides for Canadian Owners · Business Funding Requirements in Canada · Documents Needed for Business Funding in Canada · Business Funding Affordability Calculator (CAD) · Funding Readiness Score Canada: Free 30-Second Check
Before taking on a new payment, know how much revenue the business needs to cover all costs. A break-even calculation takes an afternoon and prevents expensive mistakes.
Fixed costs stay roughly the same each month: rent, salaries, insurance, software, loan payments. Variable costs rise with sales: materials, merchant fees, commissions, packaging.
Add up monthly fixed costs and work out variable costs as a percentage of revenue.
Contribution margin is the share of each sales dollar left after variable costs. If variable costs are 60% of revenue, the contribution margin is 40%.
Every dollar of contribution goes first to fixed costs, then to profit.
Break-even revenue equals fixed costs divided by the contribution margin. With $24,000 of monthly fixed costs and a 40% margin, break-even is $60,000 a month.
If a new funding payment adds $3,000 a month in fixed obligations, break-even rises to $67,500.
Ask whether the purpose of the funding raises revenue or margin enough to cover the new payment comfortably. If a new oven adds $10,000 a month in sales at a 40% margin, it adds $4,000 of contribution, more than covering a $3,000 payment.
If the purpose does not raise revenue or margin, the payment simply raises break-even.
Track actual revenue against break-even monthly. The gap is your cushion. When the cushion shrinks, cut costs or slow spending before cash becomes a problem.
Guides like this one are general education written for Canadian owners. They are most useful when you turn them into a few concrete actions with dates, and revisit them when your numbers change. If funding is part of your plan, the same preparation that makes the plan work, clear numbers and a specific purpose, also makes an application faster and stronger.
Merchant Fund Express reviews Canadian businesses in every province and territory. If you would like a specific answer for your business rather than general guidance, send a signed application and your last four months of business bank statements, or call (305) 384-8391 first to ask a question.
Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.
It is general education. Your file and agreements are specific, so read them and ask questions.
Gather four months of statements and write what the money is for in one sentence.
Yes. Apply once and the file is matched to the structure that fits.
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.
