Merchant Cash Advances

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What Is A Merchant Cash Advance?

Merchant Cash Advances are a relatively new type of unsecured borrowing for business, offering a short-term cash injection from £2,500 to £500,000 typically borrowed over a period of 6 – 12 months. Unlike a typical business loan there is no interest charged and repayments are based on a percentage of your card machine sales each month, helping to ensure that repayments stay inline with your cash flow during both busy and quiet periods throughout the year. The amount your pay back each month is based solely on your card receipts and not on cash takings.

Merchant cash advances have been praised by the government as an alternative funding option for UK businesses and have already helped thousands of small business owners secure the funding they need for new expansion, new equipment and more.

Will My Business Qualify?

If you have been in business for more than 6 months, have monthly card sales of £5,000 or more, are a UK resident and over 18, you can qualify for a merchant cash advance. All credit histories are welcome, so even if you have bad credit we can still accept you for funding.

The application process is quick and requires no paperwork or credit check.

Which Lenders Offer Merchant Cash Advances?

There are a small number of dominant merchant cash advance lenders in the industry with the market leaders being 365 Business Finance, Liberis & Capify. Using our quote system enables you to apply to the majority of merchant cash advance lenders in the market and then receive quotes from the lenders that your business qualifies for. Our solution not only saves you time applying individually but also improves your chances of being accepted and enables you to compare offers from multiple lenders.

What Are The Advantages Vs A Typical Business Loan?

  • Fast Funding: Receive funds in as little as 24 hours from the time of application.
  • Flexible Payments: Repayments are based on a percentage of monthly card sales, adjusting inline with your cash flow.
  • Unsecured Borrowing: Merchant Cash Advances are unsecured, leaving your business assets safe.
  • Card Only: Repayments are based solely on card sales, keep 100% of company’s cash transactions.
  • No Hidden Costs: There is no interest to pay, no fees and no hidden costs. Money is borrowed with a typical factor rate of 1.10-1.25
  • No Paperwork or Business Plan: No business plan or paperwork is required. Simply apply online in under 30 seconds and we’ll be in contact

What Does A Cash Advance Look Like For A Typical Business?

A restaurant owner has average card sales of £10,000 per month and wants to borrow £10,000 to cover the cost of new equipment. The owner agrees to pay back £12,000 using 10% of card sales each month. The repayment will last approximately 12 months. If the restaurant’s card sales are less than the average over the 12 month period, there are no additional charges or fees to pay.

Merchant Cash Advance FAQs

What business types are suitable for a merchant cash advance?

Any business that takes card payment as their primary form of payment. Typical clients are restaurants, bars, nightclubs, hotels, b&b’s, hair and beauty salons, garages, retail businesses and more.

How long does it take for the funds to be available?

Funds can be available in your account from as little as 48 hours from the time of application.

How much can I borrow?

Funding starts from £2,500 and is based upon your business’ cash flow up to a maximum amount of £500,000. A business can typically borrow up to 1 month’s card sales, however this can increase to 1.5 month’s.

Is the loan secured?

Merchant Cash Advances are an unsecured product and therefore you do not need business assets to secure against your borrowing. However some lenders may ask you to give a personal guarantee dependent on your circumstances.

How much will I have to repay?

The amount you repay is decided by a factor rate which is set by the lender when you apply. This is typically between 1.1 and 1.25. If, for example, a lender sets a factor rate of 1.15 and you borrow £10,000 you would repay £11,500. There is no interest and no other charges to pay.

Do I qualify for a merchant cash advance?

To qualify you need to have been trading for 6 months, have monthly card sales of £5,000 or more, be a UK resident and be over 18.

Are applicants with poor credit accepted?

Unlike traditional funding methods, poor credit is not a barrier to accessing a cash advance when your business needs it.

Author Image - Michael Foote

Written By Michael Foote, Insurance and Finance Expert

Michael Foote is the founder of Quote Goat and has over 13 years experience working in the finance, insurance and currency sectors. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city for a number of firms including HSBC.