Whether investing in equipment, hiring talent or covering other costs, businesses often need finance to keep operating and growing. Securing a traditional loan can be difficult for some business owners, and a route others simply prefer not to take.

Awareness of alternatives to traditional finance is growing among UK businesses however, and a merchant cash advance is one of the innovative and flexible products helping small businesses secure the funding they need. 

What Is a
Merchant Cash Advance?


Also known as a business cash advance, a merchant cash advance is a quick and easy source of cash that effectively brings forward your future card sales, using your card machine to secure lending rather than your personal or business assets.

Your repayment terms are worked out based on a pre-agreed percentage of your monthly card transactions, and the total repayable amount is fixed. There’s no rush to pay it back as you only repay when you trade - so when business is slow, you’ll pay less, and vice versa.    

How is a Merchant Cash Advance
Different to a Business Loan?

A merchant cash advance is a relatively new finance product, compared to traditional loans. Whereas part or all of a business loan may be secured against your personal or company assets, a business cash advance can be seen as safer as it is based solely on a percentage of your future revenue. There are no fixed term or monthly repayments so late payments simply aren’t possible, which is helpful if your cash flow isn’t consistent from one season to the next.  

Getting approved for a business loan can take time with some finance providers as your application goes under review. A merchant cash advance is often a quicker alternative – apply online and we’ll get back to you within 24 hours, if you meet the criteria detailed further down the page. 

There are typically less borrower requirements too. We don’t need to see detailed business plans, whereas most banks will with a traditional business loan. This means even if you have been rejected for a business loan, you could still get a business cash advance.      

How does a Merchant Cash Advance
Work?

As its name suggests, this financial product is an advance of cash based on your future card sales. Merchant cash advance companies work directly with your card terminal provider – the company that processes your business transactions – and therefore see the money flowing through your business as it happens.

As they’re a type of finance directly linked to card sales, you only pay when you make money and the amount you pay is proportional to how much you earn. Your agreed repayment total won’t change even if it takes a little longer than expected to pay it back, and you’re not at risk of any nasty penalties or fees.       

Who is a Merchant Cash Advance
Suitable for?

In theory, any business that earns on average £5,000 or more through card payments per month and has six months of merchant data available could get a merchant cash advance.

Thanks to their flexibility, our merchant cash advances are particularly helpful to businesses that tend to have a fluctuating or seasonal trade, such as those in the retail, hospitality and leisure industries. Businesses in these sectors typically find it more difficult to secure the finance they need.    

How much can I
Borrow?

Our merchant cash advance loan amounts can be as much as 100% of your average monthly card transactions between the values of £5,000 and £500,000. This means that if you earned £6,000 per month through your PDQ machine, you could qualify for a Merchant Cash Advance from Merchant Money of up to £6,000.

How do I
Repay?

We’ll agree the repayment amount with you based on your business card transactions and a factor rate starting from 1.15. The factor rate is subject to underwriting, which means there is no hard and fast cost associated with a Merchant Cash Advance.

What are benefits of a
Merchant Cash Advance?


Perhaps most importantly, a merchant cash advance from Merchant Money is a flexible and scalable source of finance. With no fixed payment periods, your repayments vary in line with your income, so you’ll pay more in months when things are going well, and less when you’re not as busy. This way your cash flow is never interrupted. Other advantages include:

Quick and easy

You can get the cash injection your business needs in as little as 24 hours, with no need for an appointment.

Simple repayments

Repayments are taken automatically before entering your account in much the same way as most people pay income tax. This means you don’t need to worry about forgetting or struggling to make payment.

Transparency

The cost of repayments is agreed up front, won’t change over time, and there are no hidden fees or penalties.

What are the
Disadvantages?


While there are few negatives, there are a couple of things to consider before deciding to apply. Firstly, you’ll need to be realistic - merchant cash advance direct lenders will typically lend you up to 100% of your monthly card turnover, so you’re unlikely to be approved if you’re hoping to apply for an amount that doesn’t match up with your cash flow.

Secondly, it’s important to remember that a business cash advance is based directly on card sales made through a card terminal. If you primarily rely upon cash payments, bank transfers or other online payment methods, this option may not be the right one for you.

Why
Choose Merchant Money?


This solution is highly advantageous for a business with high seasonality and fluctuating cash flow.

  • Get up to £500,000 to grow your business in 24 hours
  • Top-ups are available after 4 months
  • We work with all card terminal providers (not all lenders do this)
  • We’ve been helping small businesses since 2013
  • We’re trusted by independent customer reviews
  • Automated process with no manual payments from the customer
  • We’re authorised and regulated by the Financial Conduct Authority (FCA)
 

Can I get a
Merchant Cash Advance?


We offer this product to all UK based limited companies, sole traders and unincorporated partnerships. If you feel like it’s the right financial option for you, you’ll need to meet the following criteria:

Criteria:

  • Minimum of 6 months trading through PDQ machine
  • Minimum turnover of £5,000 per month through card terminals
  • No other Cash Advance in place (unless to be refinanced)

How do I
Apply?


It’s quick and easy to apply for a Merchant Cash Advance with Merchant Money. If you’re in need of a boost, a Merchant Cash Advance from Merchant Money could provide you with the help you need to take your business in the right direction.

Step 1 Apply for the amount you have in mind online using the GET A QUOTE button. This can be as much as 100% of your average monthly card transactions. You’ll need to give us a few details such as your name and contact information, the number of years you’ve been trading, and your current average monthly credit card sales.
Step 2 Wait to hear back. Someone from our team will contact you to ask for some extra documents such as trade data and business bank statements to support your application. Once we’ve got everything we need, we can give you an answer within 24 hours.
Step 3 Agree on the repayment amount. We’ll agree an amount with you up front based on a factor rate starting from 1.15. For a £6,000 Merchant Cash Advance with a 1.2 factor for example, the total repayable amount would be £7,200.
Step 4 Keep on running your business as normal. We’ll collect a fixed percentage from your card transactions automatically – so if a customer pays you £100, £88 would go to you and £12 would go to us.

Frequently
asked questions


When it comes to securing business finance, it’s vital to make an informed decision. We’ve answered some of the most commonly asked questions to help you in that task.

How much can I borrow?


We can provide you with an advance up to 100% of your average monthly card turnover, to use in any way your business needs. With a minimum amount of £5,000 and a maximum of £500,000.

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How does it work?


Get up to 100% of your monthly card turnover upfront, then pay it back as you trade. You repay via a set percentage of future card transactions. The beauty of this product is that you repay at your own pace. You only repay when customers pay you.

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What documents do
I need to apply?


3 months' bank statements, last 6 months' merchant statements and in some cases we ask for filed accounts (applications over £30,000).

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