Merchant Cash Advance UK

A Merchant Cash Advance is a form of business funding where a lender advances you a lump sum in exchange for a percentage of your future card sales. It is also commonly called a Business Cash Advance. Repayments are taken automatically as a fixed percentage of your daily or weekly card takings until the advance plus the agreed fixed fee is repaid.

You receive a lump sum based on your recent card turnover (often up to 200–250% of average monthly card sales). A fixed factor rate is agreed in advance. The lender then takes an agreed percentage of your future card machine or online card payments until the total amount due has been collected. Quiet months mean lower repayments; busier months mean faster repayment.

Most lenders offer between £5,000 and £1 million. The exact amount depends primarily on your average monthly card sales, trading history, sector and existing commitments. Many UK businesses can access 1.5–2.5 times their average monthly card turnover.

Costs are expressed as a factor rate rather than an interest rate. Typical factor rates currently range from approximately 1.08 to 1.35 (meaning you repay between £1.08 and £1.35 for every £1 advanced). The total cost is fixed at the outset so you know exactly what you will repay.

e.g. Factor Rate 1.3, for every £1000 you borrow you repay £1300.

Most UK businesses that take regular card payments can apply, including limited companies, sole traders and partnerships. Typical minimum requirements are 3–6 months trading and average card turnover of £2,500–£5,000 per month (criteria vary by lender). Low credit scores or previous declines do not automatically rule you out.

Once approved, many Merchant Cash Advances can be paid into your business account within 24–48 hours. The application itself is usually straightforward and can often be completed with open banking or recent bank statements.

You can usually repay early, but because the total cost is fixed by the factor rate you will not normally save money by doing so. You simply pay the remaining balance of the agreed total.

If you already have a cash advance in place you may be able to renew or refinance once 50% has been repaid.

Most lenders only allow one advance against a single card processor at a time. However, if you take payments through multiple providers (for example Worldpay plus Just Eat or Shopify), it may be possible to arrange additional facilities.

The funds can be used for almost any legitimate business purpose, including stock, refurbishment, marketing, tax bills, equipment, expansion or general cash flow support.

A UK business can apply for a Merchant Advance loan if you have been trading for 6 months and have card turnover above £2500 per month.

You do not need to be a homeowner and could still be accepted with a low credit score.

A Merchant Cash Advance provides access to business finance on a short term basis and are usually repaid within 6-12 months. It could give access to funding, when you are not able to get other types of business funding and have been declined.

However it may be more expensive than an alternative, like a business loan.

We cannot give financial advice, therefore you will need to access if the benefit is worth the cost of borrowing.

Merchant Cash Advances are generally unregulated products in the UK when provided to limited companies. They do not fall under the same consumer credit rules as personal loans. We always recommend you carefully consider the total cost and whether the flexibility justifies the fee.