Merchant Cash Advance Eligibility

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Written by Michael Foote, founder of Quote Goat, has over 13 years experience working in the finance, insurance and currency sectors.
27/03/2020

Merchant cash advances are a form of alternative lending for businesses. Although they tend to be more flexible than traditional forms of lending, a business will of course still need to meet a lender’s criteria prior to accessing finance.

Is your business eligible for a merchant cash advance?

In theory, any business that receives payment via a card terminal is eligible for a merchant cash advance so there is nothing to stop you applying and lenders will do their best to find a solution. However typically, to be eligible for a merchant cash advance your will need to meet the following criteria:

  • Accept card payments: Merchant cash advances use a business’ monthly sales through card terminals (PDQ terminals) as a form of security to lend against. To be eligible you are therefore required to take at least some proportion of their revenue through a card terminal. Merchant cash advance repayments are also made via your card terminal.
  • Trading Time: Your business must have been trading for a minimum of 3 months, enabling you to demonstrate prior business sales.
  • Location: your business must be based in the UK or Ireland.
  • Sales: you must take a minimum of £2,500 per month via your card terminal
  • Business Type: Eligible businesses are limited companies, partnerships or sole traders

What Types of Business Typically Use A Merchant Cash Advance?

Merchant cash advances are a particularly useful form of funding for businesses that experience fluctuations in sales from month to month due to the fact that repayments are based on a percentage of a business’s daily card takings. This makes repayments more manageable for the bar in the winter and enables the business to pay off more of the finance in busier periods.

Typical companies that apply are Barbers, Hair/Beauty Salons, Pubs, Hotels, Restaurants, Retail Businesses, Garages & Taxi Firms.

Apply online

If your business is looking for a merchant cash advance you can apply via our website to receive quotes from a leading panel of lenders.

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