Merchant Cash Advance
A merchant cash advance is a unique business finance model designed for businesses taking debit and credit card payments from their customers.
Your business can borrow a lump sum, then repay it gradually in small amounts through your customers’ card payments.
What’s the difference between a merchant cash advance and a business loan?
Business loans are paid back with set terms and payments over a predetermined period of time. Merchant cash advances, on the other hand, are paid back based on and through credit card sales, depending on your daily or monthly credit card transactions.
Who can apply for a merchant cash advance?
In order to apply for a merchant cash advance, the business will need to have 3+ months of trading history.
The business must also take a minimum of £1,500 of card sales per month.
Unlike with some other finance products, all company types are considered and the company director does not need to be a homeowner.
Is a merchant cash advance a good option for small businesses?
The merchant cash advance repayment model makes raising finance much more manageable for small business owners. It adapts to the dynamic of your business, so you always know you can afford repayments.
Just like a conventional business loan, you’ll get a lump sum you can put directly into your business to grow it, renovate it, and more.
What can I use a merchant cash advance to pay for?
You can use the funding for any business purpose. Most of our clients use the funding to buy stock, invest in advertising, carry out refurbishments, add a new location, or to manage a temporary disruption such as a lockdown.
How is a merchant cash advance facility repaid?
Repayment will happen automatically as a fixed percentage of daily sales.
For example, if your repayment is 20% of daily sales and you made £1,000 in sales on a given day, then £200 would go towards repayment and £800 would go to you. On days without sales, you will not repay anything.
How do I apply for a merchant cash advance?
In order to assess your application, the lender will need to see 3 to 12 months of bank statements, Management Accounts for applications over £100,000 and will need a personal guarantee from the company director.
By engaging a business loan broker, you only have to provide your information once, and they can use their expertise to match you with the best product and lender for your business needs.