Merchant cash advance
An advance repaid as a percentage of your card takings, so quiet weeks cost less than busy ones. Built for businesses that trade over a terminal.
Request a callback- Typical amount
- Set by card turnover
- Typical repayment
- 10% to 20% of takings
- Security
- Usually unsecured
- Priced as
- A fixed fee, not a rate
Figures are indicative market ranges at the time of writing, not offers or quotes. What is available to your business depends on the lender, your circumstances and the security available.
About merchant cash advance
A merchant cash advance gives you a lump sum which is repaid automatically as an agreed share of every card transaction. There is no fixed monthly payment and no set end date: a strong month clears the balance faster, a weak month costs you less. For seasonal businesses that is a genuinely useful feature.
It is priced as a fixed fee rather than an interest rate. You agree to repay a set total — say a fixed multiple of the advance — however long that takes. Nothing is added for time, which makes the cost certain but also means repaying early saves you nothing.
That pricing convention is the thing to watch. Because there is no annual rate quoted, a merchant cash advance can look inexpensive next to a loan when in fact, over a short repayment period, it is considerably dearer. We will convert it into a comparable figure so you are choosing on the same basis.
Where it fits
- Retail, hospitality, salons, garages and leisure businesses with steady card income.
- Trade that swings hard with the season, where fixed monthly repayments are uncomfortable.
- Businesses with limited assets or property to offer as security.
- A defined, revenue-generating purpose — a refit, extra stock, new equipment.
- Situations where speed matters and the paperwork for a term loan would take too long.
Read carefully before agreeing
- Work out what the fixed fee equates to as an annual cost — it is often higher than it first appears.
- Early repayment usually saves nothing, since the total is fixed at the outset.
- The percentage taken applies to every transaction, which reduces daily cash flow throughout.
- Taking a second advance before the first has cleared compounds the cost quickly.
- Check whether switching card provider during the term is restricted or triggers a default.
Frequently asked
How much can I advance?
It is driven by your average monthly card turnover, commonly around one month's worth, sometimes more where trading is consistent and the business is well established. Providers will want to see several months of merchant statements.
What if takings drop off completely?
Repayment slows with them, which is the main attraction of the structure. That said, agreements normally include provisions for prolonged inactivity, so read what happens if the terminal goes quiet for an extended period.
Is it cheaper than a short-term loan?
Frequently not, once the fixed fee is expressed as an annual cost. What it offers instead is flexibility — repayments that fall away when trade does. If your income is steady, a term loan is usually better value, and we will tell you when that is the case.
You might also want
Tell us what the money is for
A short conversation is usually enough for us to tell you what is realistic — including when the answer is that you should not borrow.
