What is a Merchant Cash Advance?
A Merchant Cash Advance allows you to raise finance using receipts from your credit card machine as security. As long as you've had a card machine for at least six months, you could be eligible for a business cash advance.
- Get as much as your average monthly card turnover
- Repay by giving a percentage of all future card takings
- No minimum monthly payments
- No need to change card terminal
- Can be arranged in as little as 3-4 days (depending on card processor)
One of the biggest challenges facing small businesses is the need to secure quick and reliable financing. To do this, more and more small businesses are investigating the variable finance options available. As a result, a Merchant Cash Advance is increasingly becoming a viable and popular solution.
Here at Choice Loans, we specialise in providing alternative forms of finance to suit the wide range of circumstances confronting small and medium sized enterprises. To find out more about Merchant Cash Advances and other alternative finance options, get in touch with one of our advisors.
What are the advantages of a Merchant Cash Advance?
- No security is required as it's based solely on your card turnover
- It's very flexible if you have adverse credit - the approval rate is 90%+
- There are no repayment deadlines - pay off more in busy months, less in quiet months
- It's easy and quick to arrange without excessive paperwork
- The size of the advance you can get grows with your business
- It's available to all businesses (sole traders, LTD etc) with a minimum of 6 months' card trading
How does a Business Cash Advance work?
start by looking at your last six to twelve months' statements and taking the monthly average. This is usually the maximum advance you can get.
Once approved, you get the merchant advance and a fixed fee is added (usually around 30%), giving you the total you need to repay. For example, if you get a £10,000 advance, you will probably have to pay back around £13,000.
Merchant loans are repaid with a small percentage of all your
card takings going towards repayment. This is usually 10-20% and is done automatically
with each transaction.
Once you have repaid the advance plus the fee in full you go back to getting 100% of all card takings as normal.
What other options are there for small business finance?
If you don't want a Merchant Loan or you don't take card payments, talk to us about a Short Term Unsecured Business Loan or one of the many other finance options we have available for small businesses. Depending on how long you've been trading, your legal structure (sole trader, partnership or LTD), how much you turnover and your credit rating there may be many better options for you. Call us on 01494 410 125
Are you looking for a Merchant Cash Advance?
Just complete a few simple questions below and we'll be in touch soon to get things moving.
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"A quick efficient and certainly hassle free service - would truly recommend you."
Salma Laher, Salon Xperts
What is needed to apply
Applying for a Business Cash Advance is very easy. Below are listed the things you need in order to apply.
- Eligibility Criteria Minimum 6 months' trading history with your card machine. At least a 6 month lease on the premises you are in.
- Documents Required Last 6 or preferably 12 months' merchant statements, proof of ID, proof of bank account and an application form
- Additional Comments The speed at which you get your funds depends on your card network with some taking 5-7 days and others taking 10-14 days
- Is a Merchant Loan secured on anything?
No. It's completely unsecured and based solely on your historical card turnover
- How much can I get?
The amount available depends on your average monthly turnover from the last 9-12 months. 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 vey 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 will it cost?
A fixed fee is added to your advance ands this is usually 25-38% 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 £13,000 (assuming a 30% 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 card network?
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 open 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.
To learn more or to apply for a Business Cash Advance please either ﬁll in the call back form at the top of this page or call us on 01494 410 125 and we'll walk you through your options at no cost or obligation.