Merchant Cash Advance

Finance based on your card machine turnover 

Fill out this form to enquire about a Merchant Cash Advance

How a Merchant Cash Advance works

  • Get up to your monthly average turnover as a business cash advance
  • Repay by giving a percentage of card sales towards repayment. No deadlines.
  • Very flexible with adverse credit histories but minimum trading time is 9 months
  • No need to change your card processor 

Frequently Asked Questions

How do I qualify?    

All you need is to be running a business and taking card payments for at least 6 months. Your credit history is not very relevant. Unfortunately, it won’t work if you are a start-up as we do need to see at least 6 months’ card payment history.

Is a Merchant Cash Advance secured on anything?    

No. It’s completely unsecured and based solely on your historical card turnover.

How much can I get?    

The amount available is usually equivalent to your average monthly turnover from the last 9-12 months (plus maybe 10-15% if your business is established). The minimum amount is £3,000 and the maximum is £500,000

If I have adverse credit, can I still get a Business Cash Advance?    

A Merchant Loan is very forgiving of most adverse credit histories. In the past we have got Merchant Cash Advances for businesses with CCJs and defaults, businesses run by those in IVAs and even run by ex-bankrupts.

What does a Merchant Cash Advance cost?    

A fixed fee is added to your advance ands this is usually 20-35% to give you the total amount you need to repay. There is no other set-up, admin, documentation or broker fee - that’s it. So, as an example, if you take a £10,000 advance you would probably have to pay back £12,500 (assuming a 25% charge)

How are repayments made?    

You agree to give a small percentage of your card takings towards repaying the advance. this is usually 10-20% and your system is set up so it is automatically deducted form each trisection so you don’t have to make a weekly/monthly payment. For example, if the deduction percentage was 15% and someone spent £100 in your business you would get £85 and £15 would go towards reducing the balance you have to repay. When the advance + fee is paid off you go back to getting 100% of all takings.

Do I have to change the company that processes my card payments?    

No. You can stay with your current provider.

Will this deduction process mean it takes longer for me to receive the money I take on my card machine?    

No, it shouldn’t. Your takings should still appear in your bank account 3 days after payment was received. The only exception here is if you currently get your money on a next day basis (HSBC and some other banks can facilitate this) in which case the payment would drove to being 3 days.

What if I need more finance later?    

A Cash Advance can be ‘topped-up’ once you have paid back about half or two-thirds of the advance you’ve taken. It remains a facility you can dip into in the future if you need more funds.

Can I get a Merchant Cash Loan if I don't take card payments?    

We can look instead at a Revenue Advance (based on sales) or a Short Term Unsecured Business Loan. Call us on 01494 410 125 to discuss.

Are there other business finance options available to me?    

Yes, we have a wide range of business finance options. Please call us on 01494 410 125 if you’d like to know more.

How long do I have to repay?    

There are no deadlines. It takes as long as is required though typically we see most advances get paid off in 6-9 months

How long does it take to arrange?    

This depends on who you process your card payments with at the moment. Some processors allow the advance to be paid to you with in 3-4 days but in most cases, it takes about 2 weeks.

Does it matter if I'm a sole trader?    

This is not a problem. A Merchant Cash Advance is available to Sole Traders, Partnerships or Limited companies.

What security is required?    

None, though you may be asked to give a Personal Guarantee. This is an unsecured form of finance. This means you don’t need to be a homeowner, you don’t need to put any assets on the line and you won’t be asked to supply a Guarantor.

What can I use the advance for?    

There are no restrictions on what you can use the advance for as long as it is legal and for your business. This means you can take a Merchant Cash Advance to buy stock, do refurbishments, pay a bill, catch up on VAT payments, invest in marketing or whatever you need it for.

Is this a loan?    

No. Technically speaking it is not a loan. What you are doing is selling an amount of your future card takings for a fixed price today. These future takings are ‘sold’ incrementally transaction by transaction via the deduction percentage you agree to while you get a cash payment today for them.

Merchant Cash Advance Requirements 

Applying for a Business Cash Advance is very easy. Below are listed the things you need in order to apply.

  • Eligibility Criteria Minimum six months' trading history with your card machine & a minimum six month lease on the premises you are in. 
  • Documents Required Last six (or preferably 12) months' merchant statements, proof of ID, proof of bank account and a completed application form.
  • Additional Comments The speed at which you receive your funds depends on your card network. Some networks take 5-7 days and others taking 10-14 days

In our experience, there are two types of businesses which are especially well-suited to merchant cash advance loans:

1. Seasonal businesses and companies who don't want no monthly minimum payments. This is because repayments are linked to your card sales. When business is good, you pay off more. During quieter periods, you pay less until the full loan amount is repaid.

2. Business with adverse credit histories for whom a business loan is not an option. When you choose a merchant cash advance bad credit isn't usually an issue. That's because repayments are taken from your top line. This means that advance providers are often more comfortable with poor credit histories. 

Cash advances against merchant sales are a great fit for many businesses, but not for everyone. Problems can arise when businesses are mis-sold merchant cash advances when other finance options such as straightforward loans are a better option. To ensure you find the right fit for you, please call our experienced business finance specialists today

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