Use case

Payroll funding: how to size it and what to watch.

Payroll lands on a fixed date, while the invoice that pays for it may not.

✓ Checking what you qualify for does not affect your credit score.

What this looks like

Payroll lands on a fixed date, while the invoice that pays for it may not.

A Canadian business can be profitable and still run short on the 15th. A new contract, a large customer paying late or a seasonal dip can leave a two-week gap that has nothing to do with the long-term health of the company.

How to size it

Size the request to the gap, not to the year. If payroll is $40,000 every two weeks and receivables will cover it again in three weeks, a request equal to one or two cycles is usually enough.

Illustrative arithmetic

A staffing agency depositing about $150,000 a month asks for $50,000 for two payroll cycles while invoices settle. At a 1.22 factor the payback is $61,000, a cost of $11,000. Over roughly 5 months that is about $581 per business day, or close to 8% of monthly deposits.

Total payback: $61,000.
Cost: $11,000.
Payment: about $581 per business day, close to 8% 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 short merchant cash advance bridges a defined gap. A revenue-share structure suits businesses where the gap repeats seasonally.

Where it goes wrong

Using an advance to fund payroll every month, which turns a bridge into a habit
Forgetting payroll remittances, which are due on a separate schedule
Sizing for the maximum rather than the gap

Before you apply

List the payroll dates and the invoices that will fund them
Include remittances in your gap calculation
Decide how you will avoid needing the same bridge next quarter

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.