Use case

Opening a new location funding: how to size it and what to watch.

A second location needs fit-out, stock, staff and a lease deposit before the first sale.

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What this looks like

A second location needs fit-out, stock, staff and a lease deposit before the first sale.

Owners with a proven first location often open a second. The first location's deposit history is the evidence, and the risk is whether the model travels.

How to size it

Build a budget from lease deposit, fit-out, equipment, opening inventory and three months of operating costs. Fund the part that the first location's deposits can carry.

Illustrative arithmetic

A café depositing about $52,000 a month asks for $30,000 to open a second café. At a 1.25 factor the payback is $37,500, a cost of $7,500. Over roughly 8 months that is about $223 per business day, or close to 9% of monthly deposits.

Total payback: $37,500.
Cost: $7,500.
Payment: about $223 per business day, close to 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.

Which structure tends to fit

A longer revenue-based facility spreads the payment while the second location ramps. Smaller, staged advances can reduce risk.

Where it goes wrong

Underestimating ramp time
Thin management bandwidth
A location that takes sales from the first one

Before you apply

Prepare a one-page budget with a ramp-up assumption
Show the first location's deposits clearly
Decide what you will stop if the second underperforms

Typical starting points

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.

Common questions

How much should I ask for?

Ask for the amount you can name in dollars and tie to a quote, invoice or schedule. A smaller, specific request is easier to approve and cheaper to repay.

Which structure is best?

It depends on whether the need is a one-time purchase or a recurring gap. See the comparison pages for the trade-offs.

How fast can I get it?

Decisions are often the same day on a complete file, and funding can follow the next business day.

Keep reading

Funding use casesPayroll, inventory, expansion and more Merchant cash advance CanadaHow an advance against future card sales works Revenue-based financing CanadaRepay a fixed multiple as a share of revenue Cash-flow affordability calculatorCan the month carry the payment?Underwriting situationsCredit, NSFs, time in business and more

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

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