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Compare customer financing program costs in the U.S. and Canada, including vendor fees, buyer interest, setup expenses and profit impact.
A customer financing program can help a business offer payment options without funding every customer purchase itself. But “free to join” and “free to operate” are different claims.
For equipment dealers, manufacturers, distributors and other B2B sellers, the real cost includes more than a platform subscription. You need to understand deductions from your sale proceeds, promotional subsidies, administrative work and any obligations that remain after funding.
This guide compares the costs relevant to U.S. and Canadian businesses, keeping the seller’s program budget separate from the customer’s financing agreement.
Quick Answer: A customer financing program may have no setup or membership fee, but that does not make every financed sale free. Sellers can face transaction fees, promotional subsidies and operating costs, while buyers pay their agreed borrowing costs. Compare the written program terms and net seller proceeds, not just the advertised payment. (mehmigroup.com)
There is no standard price because programs charge for different services and allocate costs differently.
Mehmi Financial Group’s published vendor program states that there are no setup fees or membership costs. That statement concerns joining the program; it does not establish that customer borrowing, third-party expenses or custom development are free. (Mehmi Financial Group)
Other models use different pricing.
In Canada, Tabit’s merchant FAQ describes a per-transaction merchant fee, with no monthly platform fee unless the agreement states otherwise. Its promotional financing can also involve merchant-covered interest or incentive charges. (Tabit)
For U.S.-focused B2B net-terms financing, Resolve’s pricing page describes custom plans based on implementation scope and risk-based invoice-advance fees. It does not provide one universal percentage applicable to every merchant. (ResolvePay)
A meaningful comparison therefore starts with what the program includes, who pays each charge and what your business receives after deductions.
Separate launch expenses, ongoing operations and transaction-level charges.
Request a written scope covering onboarding, branded applications, website work, software access, training and support. Identify which tasks your team must perform.
A hosted application and a custom integration are different projects. Stripe, for example, distinguishes hosted, embedded-component and API implementations in its platform-financing offering. Those are Stripe-specific options, not capabilities automatically included by another provider. (Stripe)
Budget your internal time even when the provider charges nothing to join. Someone still needs to update quotes, train staff, manage access and reconcile funded transactions.
Canadian vendors can use Mehmi’s vendor-program setup checklist to identify that operational work.
Ask whether charges apply when an application is submitted, approved or funded. Then establish the calculation basis.
A percentage charged on the full invoice is not the same as that percentage charged on the financed balance after the customer’s contribution.
Also clarify whether fees include payment processing, whether minimum charges apply and whether taxes enter the calculation. Obtain a sample settlement statement showing the sale price, customer contribution, deductions and net vendor payment.
Do not assume an amount withheld from your proceeds is necessarily a permanent fee. A reserve or holdback may be released later, depending on the agreement.
A customer-facing interest promotion can shift cost to the seller rather than eliminate it. Tabit expressly describes merchant-funded promotional pricing within its Canadian offering. (Tabit)
Before advertising a promotion, compare its cost with the discount you would otherwise offer. Consider whether the subsidy applies only to selected inventory or to purchases customers would have completed anyway.
Keep compensation separate from expenses. A referral payment should reduce your projected program cost only when the agreement actually provides for it and you understand when it is earned or reversed. Mehmi’s explanation of vendor compensation models in Canada provides questions to review.
Not automatically. Removing the outside provider also means retaining more responsibilities yourself.
When your company allows customers to repay it over time, include the cost of funding those receivables, payment administration, collection work and potential losses in the comparison.
Do not compare an outside financing fee with “zero cost” internally. Compare it with the cash your business must commit and the work and risk it retains.
For Canadian sellers, Mehmi’s guide to offering financing without becoming a bank explains the distinction between introducing third-party financing and carrying customer balances.
Existing trade terms can still be appropriate for selected customers. The decision should reflect your capital, credit controls and ability to absorb delayed payment.
The customer’s borrowing cost is separate from your cost of offering the program.
Request a complete payment schedule showing the customer contribution, amount financed, fees, payment frequency, total repayment and any final obligation. Identify charges paid separately versus those added to principal.
For equipment, compare ownership and end-of-term terms. A lease with a purchase option or residual should not be compared with a fully amortizing loan using the regular payment alone. BDC’s equipment guidance recommends considering purchase costs, lease payments, end-of-lease costs and operating expenses together. (BDC.ca)
Canadian buyers can use the loan-versus-lease quote comparison and equipment financing fee guide to organize that review.
Ask for the early-payoff calculation in writing. Does paying early reduce future charges, or does a fixed obligation remain?
Review personal guarantees and collateral separately. Determine who must sign, which assets support the financing and whether existing obligations restrict additional borrowing.
A factor rate is not an interest rate or APR. Compare actual cash received, payment amounts, payment dates and fees rather than treating different pricing measures as interchangeable.
A low-cost program is not useful when its financing criteria rarely fit your customers.
BDC identifies cash flow, existing debt, credit history, financial strength and owner investment among important lending considerations. It also describes financial statements, bank information and purchase documents among the records a lender may request. These are preparation areas, not universal approval thresholds. (BDC.ca)
Ask prospective partners how they assess your normal transaction types. Prepare accurate information about operating history, requested amounts, existing obligations and purchase purpose.
For equipment, include age, condition, identifiers, price and expected use. Consider whether the repayment period remains sensible as the asset ages.
A clean file reduces avoidable questions. It does not guarantee approval, a lower rate or a particular funding date.
Also test payment frequency against the buyer’s collections. A weekly obligation and a monthly customer-payment cycle can create pressure even when the annual totals appear manageable.
Assume a Canadian dealer sells equipment for CAD $100,000 before taxes. The customer contributes CAD $20,000, leaving CAD $80,000 financed.
For this mathematical illustration, assume:
The calculated regular payment is approximately CAD $2,029.01 per month.
Total loan payments are approximately CAD $97,392.32, including CAD $17,392.32 in interest. Including the documentation fee, the customer’s financing cost is CAD $17,892.32.
Adding the CAD $20,000 contribution produces total customer cash outlay of approximately CAD $117,892.32, before excluded costs. The final payment may be adjusted for rounding.
The customer needs CAD $20,500 at closing, plus excluded upfront costs.
The assumed vendor fee is:
CAD $80,000 × 2% = CAD $1,600.
The seller receives CAD $20,000 from the customer and CAD $78,400 from the financing proceeds, for total receipts of CAD $98,400, under the assumed closing instructions.
Suppose the equipment cost the dealer CAD $75,000. Gross profit before the financing fee is CAD $25,000. After that fee, CAD $23,400 remains before other business expenses.
The fee consumes 6.4% of the original gross profit.
That is a more useful margin measure than looking only at the percentage charged on the financed amount.
Suppose a slower month leaves the buyer CAD $3,500 after operating expenses and existing debt payments. The new payment leaves approximately CAD $1,470.99 for reserves and unplanned needs.
The seller’s willingness to pay a fee does not establish that the buyer can afford the financing.
Use Mehmi’s Canadian equipment financing calculator for base-payment estimates, then add fees and taxes separately. It is denominated in CAD and provides estimates rather than financing offers. (Mehmi Financial Group)
This example is not Mehmi pricing, a vendor-fee schedule, an approval or a customer result. The 10% assumption is a nominal interest rate, not a calculated all-in APR.
A fee comparison is incomplete without the settlement schedule and risk allocation.
Resolve, for example, explains that its initial advance may represent only part of an approved invoice. A partial advance changes immediate cash availability even when the remaining amount is potentially payable later. (ResolvePay)
Ask how much arrives, when it arrives and what must happen before any balance is released.
Canadian equipment sellers can review how vendors receive financed-sale proceeds. For a U.S. custom-equipment example, the Atlanta palletizer vendor-financing guide raises deposit and production-milestone questions.
Do not release equipment merely because an application has been approved. Confirm the agreed documentation and release instructions.
Then examine recourse: circumstances in which the provider can seek repayment from your company. Resolve distinguishes approved buyer credit risk from disputes involving merchandise or merchant error. That illustrates why “non-recourse” should not be interpreted as protection against every problem connected to a sale. (ResolvePay)
Review cancellations, fraud, inaccurate invoices, non-delivery and returns before pricing the program.
Measure results against what would have happened without financing.
A useful operating measure is:
Seller cost per funded sale = total seller-paid program expenses ÷ completed financed transactions.
Include first-year setup expenses when evaluating the launch. For later periods, separate recurring costs from one-time work.
But cost per transaction is not proof of profitability.
Some customers would have paid cash or used their bank without your program. Moving those purchases into a subsidized arrangement may add expense without adding sales.
Evaluate additional gross profit before program costs, verified collection-cost savings and earned compensation against all program expenses and retained losses. Do not count the same fee twice.
Track customer acceptance, funded sales, net proceeds and reasons transactions fail to complete. An approval-rate headline cannot tell you whether pricing is attractive or whether your business gets paid efficiently.
Keep U.S. budgets in USD and Canadian budgets in CAD. Confirm currencies and conversion charges separately for cross-border payments.
Budget for review of the program’s actual activities and states served. Regulation B reaches business credit, and certain provisions also apply to businesses regularly referring applicants or selecting creditors. A referral label does not settle every responsibility. (Consumer Financial Protection Bureau)
State disclosure requirements also differ. New York requires specified cost, repayment and collateral disclosures for covered closed-end commercial financing offers. These requirements are not universal rules for every product. (New York State Senate)
Ask who pays applicable UCC search and filing expenses. Asset-specific exceptions matter; Washington’s enacted Article 9 provision, for example, establishes filing as a general perfection method with exceptions. (Washington State Legislature)
Do not assume every fee connected with financing is GST/HST-exempt. CRA guidance makes the treatment of intermediary services dependent on their actual activities and the predominant service supplied. Have an accountant distinguish financing-arrangement compensation from software, administration or implementation charges. (Canada)
Identify applicable PPSA search and registration expenses, or Quebec RDPRM requirements, rather than copying U.S. terminology into Canadian quotes. (BCLaws)
Privacy work belongs in the implementation budget too. Canadian guidance emphasizes meaningful consent, while the FTC’s U.S. business guidance recommends limiting collection, controlling access and protecting retained information. (Office of the Privacy Commissioner)
Start with a straightforward application process when it addresses the actual need. Require evidence that deeper integration will save enough work or support enough additional sales to justify its cost.
For recurring inventory requirements, evaluate an existing operating line. For durable equipment, compare appropriately structured loans or leases. Factoring concerns existing receivables and should not be treated as interchangeable with customer purchase financing.
Pause when repayment depends on speculative revenue or another future loan. Distinguish a temporary cash gap from continuing losses.
Borrowing less, reducing the purchase, renting or waiting can be more appropriate than forcing an unaffordable payment into the sales process.
Do not assume a fee can automatically be passed through. Obtain confirmation under the program agreement and applicable law. Present the actual purchase price and financing charges clearly rather than hiding a surcharge inside an estimated payment.
Request a fee schedule identifying what triggers each charge. Separate application, assessment, third-party inspection and funded-transaction fees. Clarify which expenses remain payable when the customer does not proceed.
The agreement should answer that explicitly. Ask whether cancellation before funding differs from a return after settlement, and whether processing, appraisal or legal charges remain payable. Do not promise a refund policy your financing partner has not confirmed.
Request a proposal based on your expected funded volume, average transaction size and customer mix. Compare any volume commitment with the savings offered. A lower fee is not valuable if the required volume is unrealistic.
Mehmi’s published policy states that it does not charge an upfront fee simply to submit a financing application. Independent providers and third parties may still charge transaction expenses. Its disclaimer also explains that compensation arrangements can vary and that any applicable client-paid brokerage fee must be separately disclosed and lawful. (Mehmi Financial Group)
Compare the vendor agreement, customer financing terms and settlement process together before deciding which program is economical.
Mehmi Financial Group operates as a financing brokerage and intermediary, not a direct lender. Final approvals, pricing and funding remain with independent financing providers. U.S. availability is subject to state- and product-specific restrictions; confirm eligibility through Mehmi’s current geographic-availability policy before committing to implementation costs. (Mehmi Financial Group)
To discuss a customer financing program, share your typical financing amount, U.S. or Canadian customer location, states or provinces served, products sold or use of funds, expected volume and desired launch timing.
Call Mehmi Financial Group at 833-863-4644 or contact the team. (Mehmi Financial Group)
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