Merchant Cash Advance

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What is a Merchant Cash Advance ?

How does it work?

Merchant cash advances are designed for businesses that have regular card income, the lender will provide a loan facility (typically up to £500k) based on your card receipts.

This sort of facility is very popular with retailers and the leisure sector.

Repayments are taken from your daily card transactions at the end of the day.

The great thing about the repayments is that as a percentage of your card receipts, they will flex with how your business day has gone – if you’ve done a lot of business you’d pay a bit more, but if you’ve had a quiet day then it will be a bit less. This means you are not constrained with a fixed loan repayment to make each month.

This is great for a business that is trading, say a shop or bar, but does not own the premises so is unable to access conventional funding because of a lack of security.

Considerations

Retailers will need to take at least £3,000 in card payments monthly and have processed card payments for at least 60 days. Lending is still subject to credit assessment by the lender and other factors such as existing borrowing will be taken into account.

If you need a longer term loan, ask us about a business loan. Other products may also suit your needs and help you manage your working capital have a look at these ideas here.

Talk to us today – tell us about your needs here.

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