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A Merchant Cash Advance is a way of getting finance into your business by using the payments you receive though your credit card terminal. You can usually get a sum equivalent to your average monthly takings and you pay it back by agreeing to give a percentage of future receipts towards repayment.
We 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.
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.
All we usually need are proof of your merchant statements and ID
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.
There are no deadlines. It takes as long as is required though typically we see most advances get paid off in 6-9 months
This can depend on who you process your card payments with but usually no more than a few days.
It is transferred to your business bank account. Simple!
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.
01494 410125
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