A Merchant Cash Advance is a way that merchants/retailers who take debit/credit card payments can get finance for their business. As a rule of thumb, whatever the average amount of payments you take every month on your debit/credit card machine, that’s the advance that you get.

How much can I get ?

The amount you can get is based on your average monthly card takings over the past 6-12 months. The minimum advance is £2,500 and the maximum is £500,000

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.

How much does it cost ?

When you take the advance a fee is added to give you the total amount you need to repay. This fee is usually 25-35% of the advance so, for example, if you took a £10,000 advance you would probably have to repay £13,000. There are no arrangement, legal, administration, broker or any other fees.

How do I repay the advance ?

You agree to give a small percentage (usually 10-20%) of every future transaction towards repaying the advance. This means if someone spends £100 in your business, instead of getting £100 into your bank account you would get £85 (assuming a 15% deduction) and £15 would go towards repaying the advance. This means that in busier months you’ll pay off more and in quieter months you will have less to repay so less of a strain on your cash flow.

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.

How do I get the advance ?

It is transferred to your business bank account. Simple!

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 in 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.