The $500,000 path for a $1,000,000 business

No single facility lends you half your revenue.

Spendable funds means cash that lands in the business bank account and is free to spend at the owner's discretion, net of fees. That is not the same thing as an approved credit limit, and not the same thing as a facility that pays a vendor directly.

A single unsecured, cash flow underwritten facility is commonly sized at ten to thirty percent of annual gross income. Against $1,000,000 that is $100,000 to $300,000, and the constraint is debt service coverage rather than appetite. Earnings on a million of revenue are a fraction of that million, and the payment has to come out of the earnings.

Typical single facility sizing against $1,000,000 of annual gross income. Market norms, not quotes.
Facility	Sized against	Typical outcome
Unsecured term loan	Cash flow and coverage	$100,000 to $300,000
Operating line of credit	Cash flow, margined receivables	$75,000 to $250,000
Revenue based advance	Bank deposits, three to six months	About one month of deposits
Invoice factoring	Eligible receivables	80 to 90 percent of what is out
Equipment finance	Appraised asset value	Follows the asset

You do not ask for $500,000. You assemble it.

Collateral is what moves a facility past a multiple of earnings, because it is priced off value rather than off revenue. Sequence is what turns several ordinary facilities into one total worth noticing.

A revenue based facility sized off deposits and bank activity. Working capital and lines of credit
An asset backed facility sized off equipment, receivables or inventory, where the number follows collateral value rather than revenue. Equipment financing
A receivables facility that converts invoices already issued. How to fund a cash flow gap
Where it fits, two or three of these arranged together so the total clears what any single facility would. How a file gets built
Almost every facility in this range asks the owner to sign personally. Stacking two or three means signing two or three times, and the combined schedule is built before the first one is signed rather than after the third. What a business can borrow against revenue

Same revenue, $290,000 apart.

Two businesses at $1,200,000. One reaches the ceiling and one does not, and the only difference between them is what they own. Illustrative, not a case study and not a client.

Reaches it

An asset heavy business at $1,200,000

Equipment sale and leaseback: $250,000
Receivables facility, revolving: $150,000
Unsecured term, sized off deposits: $100,000
Spendable: $500,000

Each piece is ordinary on its own. The leaseback is priced off an appraisal rather than off revenue, which is what makes the total possible.

Does not

A services business at $1,200,000

Equipment to pledge: None
Receivables facility: $90,000
Unsecured term, coverage limited: $120,000
Spendable: $210,000

Same revenue, different balance sheet, roughly forty percent of the outcome. This is the conversation we would rather have in week one than in week six.

What qualifies a business.

Annual gross income: $1,000,000 or more
The floor for the $500,000 path. Below it we still advise, at a smaller range.
Time in business: 24 months or more
Twelve months can work where the asset is strong.
Deposit consistency: Six months of steady deposits
Lenders read the bank statements before they read the statements.
Filings: Corporate filings current
Financial statements and returns up to date, or close.
Security: Equipment, receivables, inventory or property
Collateral is what moves the number past a revenue multiple.

What usually stops it.

Unresolved CRA arrears with no payment arrangement in place.
Two or more merchant advances already outstanding.
Repeated NSF activity in the last three months of bank statements.
A request with no stated use of funds and no repayment source.
Cannabis, firearms, adult, gambling and certain crypto businesses, where most Canadian lenders will not participate.

See where you stand in forty seconds

The five things people push back on.

Trust Financials Limited is a commercial finance advisory firm. We are not a bank, a lender, or a deposit taking institution, and we do not originate, underwrite or fund credit. Nothing on this site is an offer of credit or a commitment to lend. Amounts and timelines shown are Canadian market norms and maximums, not a quote, a pre approval, a commitment or a guarantee. Every facility is subject to the lender's own underwriting, credit review, documentation, approval and timing. Rates, terms, fees, amounts and eligibility vary by lender, by product and by applicant, and can change without notice. Financing secured by real property is arranged only through licensed mortgage brokerages. All figures are in Canadian dollars.

Is $500,000 a guaranteed amount?

No. It is a ceiling for a company that qualifies, and every facility inside it is subject to the lender's own underwriting, credit review, documentation and approval. It is not a quote and not a pre approval.

Why does one product not get there?

Cash flow lending is capped by debt service coverage, so a single unsecured facility is commonly sized at ten to thirty percent of annual gross income. On $1,000,000 that lands nearer $100,000 to $300,000.

What if my business has no equipment or property?

Then be realistic: the range is lower. A services business with a short receivable cycle and no hard assets rarely reaches the ceiling, and we will say so at the first call rather than at the sixth week.

Is stacking facilities risky?

It can be. Layering facilities without one view of the combined remittance is how a business misses payroll in a slow month.

Find out which structure your balance sheet supports.

Four questions to start, and no email until you have the answer.

No lender hears your name until you say so.

A request emailed to twenty lenders leaves twenty records. The next one to see it reads the declines before they read the deal, and a file that looks shopped is priced as one. So the list is built with you, approved by you in writing, and nothing leaves this office before that.

See where you stand

Call: 416-841-8468
Email: Trustfinancialslimited@gmail.com
Hours: Weekdays, Toronto time

Where $500,000 actually comes from.