Merchant Cash Advance
Unlock Tomorrow’s Revenue Today with Merchant Cash Advances
Merchant Cash Advances
Quick, flexible, and scalable, merchant cash advances have become a popular choice for UK hospitality, retail, and leisure businesses. By leveraging your card payment terminal, you can access unsecured funding—an ideal solution for businesses with limited assets but strong daily card transactions. Repayments are automatically taken as a percentage of your card revenue, easing cash flow concerns. Pay more when business is booming, and less during slower periods. It’s the perfect fit for many SMEs.
How do they work?
Any business that accepts payments through a card terminal may qualify for a Merchant Cash Advance (MCA). Since the lender collaborates directly with your card terminal provider—the company that processes your transactions—they have insight into the volume of card payments your business receives. This information helps the lender determine the amount they can offer and design a tailored repayment plan.
Because the loan and repayment plan are based on your business’s trading patterns and revenue, MCAs adapt to how your business operates. While the percentage of customer receipts allocated to repayment remains constant, the amount you repay daily, weekly, or monthly adjusts in line with your card payment income. This flexibility is especially beneficial for businesses with variable or seasonal income.
Merchant cash advances simplify the repayment process—you never need to worry about making payments manually. Repayments are taken ‘at source,’ meaning they are automatically sent to the lender by your card terminal provider.
The amount you can borrow depends on factors such as your card turnover and what the lender believes you can comfortably repay.
Commonly Asked Questions About Merchant Cash Advances
Is a merchant cash advance a loan?
Technically, all borrowing is a loan, but a merchant cash advance (MCA) differs from standard business loans in key ways. It’s unsecured, requiring no collateral, and is repaid as a percentage of your card payment income, adjusting with your business performance. Unlike traditional loans, MCAs have no late fees or penalties for early repayment, making them a flexible option tailored to your business’s cash flow.
What can I use a merchant cash advance for?
A merchant cash advance can be used for various legitimate business purposes, such as purchasing stock, funding expansions, managing cash flow, covering tax bills, marketing, or buying equipment. If your business needs funds to grow, a merchant cash advance could be a great solution.
How much does an MCA cost?
The cost of a Merchant Cash Advance (MCA) is determined by factors like your industry, credit rating, card receipts, and turnover, and is expressed as a fixed factor rate per £1 borrowed, typically ranging from 1.07 to 1.35. For example, borrowing £1,000 at a factor rate of 1.2 means you’ll repay £1,200. The rate is fixed when the loan is issued and won’t change, even if you repay early. Contact us today for a personalized rate quote.
What is a factor rate?
The factor rate is a fixed fee charged by the merchant cash advance provider, expressed as a set amount per pound borrowed, typically ranging from 7p to 35p. Unlike variable interest on some business loans, the factor rate remains constant, so if you borrow £1 at a factor rate of 1.35, you’ll repay £1.35. This fixed rate eliminates the volatility of fluctuating interest rates, offering a predictable repayment plan based on your customer card payments.
Offers within 24 hours
If your card payment volume, business profitability, and credit rating are strong, you can receive an MCA offer within a day of applying, with funds deposited soon after. However, while merchant cash advances are generally quicker than other lending options, lenders typically conduct a full risk assessment, including contacting your card terminal provider.
Testimonials
“British Business Funding transformed our cash flow management. As a retail store with fluctuating sales, a Merchant Cash Advance was the perfect solution. The fixed factor rate was clear and easy to understand, and the repayments adjusted seamlessly with our daily card transactions. We used the funds to expand our stock and renovate our store, which has significantly boosted our sales. The flexibility and simplicity of the MCA allowed us to focus on growth without the stress of traditional loan repayments. Highly recommended for any business looking for adaptable financing!”
We turned to British Business Funding for a Merchant Cash Advance when we needed quick capital for a major equipment purchase. The process was straightforward, and the fixed factor rate gave us a clear picture of our total repayment from the start. With repayments linked to our card sales, managing cash flow became much easier. We’ve already seen a return on our investment with increased efficiency and productivity. The flexibility to repay more during busy periods and less when things slow down has been a game-changer for our seasonal business. Excellent service and a great financing option for any business!
There are numerous merchant cash advance providers, and reaching out to each individually can be time-consuming. Let us handle the legwork for you. Leverage our lender network to find the best MCA or other funding solutions tailored to your business needs.
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Apply for a Merchant Cash Advance and unlock tomorrow’s revenue, today.
