If you’re looking for access to fast business cash and take most of your revenue via card transactions, the Merchant Cash Advance could be a good option for your business.

What is a Merchant Cash Advance?

Merchant cash advances, also known as business cash advances, are a relatively new addition to the business finance world. This innovative product, first introduced by lenders a few years ago, uses your card terminal to ‘secure’ lending and then repayments are taken as a proportion of your revenue, making it effortless to repay the loan.

This type of finance has become very popular in the retail and leisure sector and can work well for any business that takes a good volume of card sales every month.

Can I get a Merchant Cash Advance?

Technically, any business that uses a card terminal to take payments from customers could be eligible for a Merchant Cash Advance. However, most lenders want to see a minimum level of sales, usually around £2,500 per month and will need to see at least 4 months of trading history.  

With a merchant cash advance, the lender works with the terminal provider to gain visibility on how much money is running through the business, this means that there’s no need for credit checks or a thorough review of your accounts in order to approve the advance. This makes the merchant cash advance one of the fastest ways to raise finance for your business.

The advantages of a Merchant Cash Advance

Fast and flexible

If your business is eligible, this type of finance is one of the fastest ways to unlock capital and funds can be in your account within 24 hours of applying.

Can be used in conjunction with other finance

A merchant cash advance is seen as a line of credit, and therefore it’s possible to get other forms of finance like asset finance or a secured loan alongside one another.

Effortless repayments

Another advantage of merchant cash advances is that repayments automatically ‘taken at source’. Because the lender works directly with the card terminal provider, the repayments never reach the business bank account, and therefore no is repayment set up or management required by the business owner. So you can spend less time worrying about admin and more time running your business.

The disadvantages of a Merchant Cash Advance

Borrowing limited to revenue

The amount you can borrow is relative to your average card takings per month. So, if you want to borrow £10,000 but your business only takes £2,000 per month, it’s unlikely you’ll be approved for the level of finance you need. As a rule of thumb, you’ll be able to get the amount of finance equivalent to what your business receives in an average month.

Only looks at card takings

If your business takes payments in a variety of ways then a merchant cash advance may not be a good solution. You may be better off looking at unsecured business loans, as these lenders will look at your total revenue which will give you more chance of getting approved for a more substantial loan.

Limited to specific terminal providers

Some lenders only work with select terminal providers, which means your choice is likely to be limited to specific lenders depending on your merchant provider.  

The benefits of a Merchant Cash Advance arranged through Fundaco:

  • Funding in 24 hours
  • Advances between £2,500 – £500,000
  • No security required
  • Flexible repayments
  • Borrow up to 120% of your average monthly card transactions
  • Factor rates from 1.25

How do I apply?

Applying is simple. At Fundaco, we’re experts at taking the hassle out of a funding application. After just one phone with one of our team, your dedicated finance manager will use their expertise and experience to source the most suitable funding solution for your business and circumstances, often in as little as 24 hours.  

Simply give us a call to discuss or submit your funding requirements here and one of our friendly experts will get back to your shortly. 

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