Specialist merchant cash advances for UK card-taking businesses

This is the part that makes the product worth understanding properly. A term loan takes the same amount out of your account on the same date every month whether you traded well or not. An advance does not. Because the funder is buying future card sales rather than lending money, the collection is a percentage of what you actually take. A quiet January in a seaside cafe repays less than a busy August. A restaurant closed for a fortnight’s refit repays almost nothing while it is shut, and catches up when the doors reopen.

That percentage is the holdback, sometimes called the split or the repayment percentage, and it typically sits somewhere between 5 and 20 percent of daily card takings. Where it lands is a judgement about your margins, not a standard setting. Too low and the advance takes a year to clear and costs you more in opportunity than it is worth. Too high and the business is trading through a hole in its daily cash flow. Getting that number right for your trade is most of what we do, and it is the single most common thing funders and businesses get wrong when they deal direct.

The practical benefits follow from the structure. Merchant funding is unsecured, so there is no charge over your home or premises, although directors are usually asked for a personal guarantee. It is quick, because underwriting reads card turnover rather than a business plan. And it is flexible in use: businesses apply the money to stock, refits, equipment, a VAT bill, a marketing push before a busy season, or simply to smooth cash flow through a slow quarter. If you want the full mechanics in one place, our guides cover what a merchant cash advance is and how a merchant cash advance works in detail.

The funding we arrange

Each page below is the same instrument shaped for a different kind of business and a different set of circumstances.

The cost is not an interest rate. It is a factor rate: a single multiplier applied to the advance that fixes the total amount you will deliver back. Factor rates typically run from around 1.1 to 1.5, and where you sit in that band depends on your sector, how card-heavy and how steady your takings are, how long you have been trading, and how many funders are willing to compete for the deal. There is no separate arrangement fee on most agreements, so the factor rate is usually the whole price.

A worked example, illustrative only. A business takes a £20,000 advance at a factor rate of 1.25. The total to be delivered is £25,000, so the cost of the funding is £5,000. The holdback is set at 12 percent of daily card takings. On card turnover of £30,000 a month, roughly £3,600 a month goes to the funder, and the advance clears in approximately seven months. Trade better and it clears sooner; trade worse and it takes longer, but the £25,000 total does not change either way.

That last point is the one to hold on to. Because the total is fixed at the outset, repaying an advance early does not save you money the way settling a loan early does. It also means the effective annual cost rises the faster you repay, which is why comparing an advance to an APR is misleading in both directions. Judge it on the total cost of the capital against what the money will earn you. You can model your own numbers with a merchant cash advance calculator before you speak to anyone. All figures here are illustrative, vary by funder and business, and are not an offer of finance.

The threshold is deliberately low. Most funders want a UK business taking card payments, at least three months of card processing history, and roughly £2,500 or more in monthly card takings. Beyond that the question is simply whether the pattern of your takings will support the advance being repaid comfortably. Limited companies, sole traders and partnerships are all fundable, and small business applicants with a single site are the core of this market rather than the exception.

Credit history matters far less here than it does with a business loan or an overdraft. Funders run a credit check, so it is not accurate to call these advances no credit check funding, but a soft search on a director with a patchy file rarely kills an application on its own when the card sales are strong and consistent. County court judgments, arrears and a thin filing history are all things we can usually work with, and the honest version of that argument sits on our page on bad credit merchant cash advances. The full checklist, including what disqualifies an application, is on merchant cash advance eligibility.

What will stop an application is the absence of card sales to buy. Businesses paid by bank transfer or invoice, however profitable, do not fit this product and are better served by invoice finance or a term facility. We will tell you that on the first call rather than after a week of paperwork.

Neither product is better in the abstract. If your revenue is predictable and the payback runs over years, a business loan is almost always cheaper and you should take one. If your takings swing week to week and the opportunity in front of you is worth more than the cost of the money, the advance wins on flexibility and on speed. Invoice finance is the right answer for businesses billing other businesses, and asset finance for equipment with a resale value. We arrange advances, and part of arranging them honestly is naming the alternatives when they fit better. The panel of funders and how direct providers compare with brokers is set out on merchant cash advance lenders.

Hospitality is the natural home of the product, because a restaurant taking card payments has exactly the revenue shape an advance is built around: high card share, weekly peaks, and seasons that do not care about a fixed repayment date. Retail sits close behind, along with salons, garages, takeaways, hotels, gyms and ecommerce sellers whose settlement runs through a payment gateway rather than a terminal. We place funding for businesses across the United Kingdom, with city pages covering the trading districts we see most, starting with merchant cash advances in London.

A merchant cash advance is a purchase of future card receivables, not a loan, and that is a legal distinction rather than a marketing one. Because it is a commercial sale of receivables, an advance to a limited company sits outside the Financial Conduct Authority’s consumer credit perimeter and is an unregulated commercial agreement. Agreements with sole traders and small partnerships can in some circumstances fall within the Consumer Credit Act, and where a transaction would require FCA authorisation we refer it to a regulated firm.

Unregulated does not mean unaccountable, but it does mean the agreement itself is where your protection lives. Read what the factor rate delivers in total, what the holdback is, what happens if you change acquirer, and what the personal guarantee covers. We are a finance arranger and introducer, not a lender: we structure the application, take it to the funders whose criteria and pricing actually suit your business, and tell you plainly when an advance is the wrong product. We do not provide financial, legal or tax advice, and every figure on this site is illustrative rather than an offer of finance.