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Can you use Cash Advances if you don't take credit cards?

Published on 5th July 2017 - Last update on 4th December 2019

Tending to the growth and sustainability of your SME is the focus of any business owners. Yet ensuring that our businesses continue to prosper and develop in a healthy way can be trying, there is so much to consider and often very little time. That’s why acquiring a source of external funding can prove so invaluable. If you’re looking for an agreement that’s flexible and able to mould itself around your business’ credit and debit card sales, perhaps a Merchant Cash Advance could help? But, what if your business doesn’t accept card-based transactions?

Can you use Cash Advances if you don’t take credit cards?

Also known as a Business Cash Advance, Merchant Cash Advance is often considered as a means of quickly accessing funding and throws a lifeline to business’ that may be suffering from poor credit. What makes this product so invaluable is that lenders typically do not pay attention to your credit score and business history, their only concern lies with your card-based sales. Consequently, applying for a Merchant Cash Advance is usually a simple process that could see decisions and funds offered in as little as 48 hours.

When discussing Merchant Cash Advance there two things you need to acknowledge. Firstly, it is not a loan and, secondly, it works using your card based sales. During the application process, business lenders will request to review your latest sales reports for 3, or more, months. This will allow them to ascertain a greater understanding of your card sales, customer spending patterns and help determine whether your business can afford the product. Plus, by choosing Merchant Cash Advance your card-based sales will play an important role in every aspect of the agreement, affecting everything from the size of the lump sum you could be offered to how the product is eventually repaid. As such, if your business is unable to accept card or digital sales you will not qualify for a Merchant Cash Advance.

What is the alternative solution to a Merchant Cash Advance?

Although Merchant Cash Advance has one of the highest acceptance rates in the financial landscape, being rejected is still a possibility you need to aware of. If you’ve been rejected merely because your business doesn’t support card sales it can be very disappointing and frustrating. But there’s no need to worry, there is another way for your business to enjoy some of the same benefits that a Merchant Cash Advance can offer.

If Merchant Cash Advance is the older brother, then a Business Revenue Advance is no doubt it’s sister product. In many ways, a Business Revenue Advance operates very closely to what you’d expect from a Merchant Cash Advance, but with one major difference. Rather than focusing solely on your card based revenue, this finance product takes into account your whole revenue. So, if your business earns around £5,000 each month but doesn’t support card sales, a Business Revenue Advance can offer the same unique flexibility you need.

When applying for a Revenue Advance you will, again, need to present potential business lenders with your monthly sales reports for 3 or more months. But, instead of just looking at your card sales, they’ll be scrutinising and making decisions based on your business’ overall combined revenue. As with a Merchant Cash Advance solution, they’ll be looking to see customer spending patterns, sales strength and that the product is viable for your business.

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Should they agree to offer your business a Revenue Advance, the lump sum will be based on your business’ monthly sales figures. So, by using your submitted sales reports, they’ll work out an average. What this means is that if your business roughly has a revenue of £5,000 each month, the lump sum on offer will in the same region. The sum acquired can go onto to be used to grow and support your business in any way you see fit.

Plus, like Merchant Cash Advance, Business Revenue Advance also offers your business Flexible Monthly Repayments but with some differences. Lenders will, again, offer your business a rate, or percentage, which will determine how you’ll need to repay them each month. For example, if you’re offered a rate of 15% and your business earns £10,000 in a particular month the amount payable will be £1,500. However, rather than automatically taking money, the lenders use your business’ sales report for that month to determine how much you need to pay. From here, you’ll then go on to transfer the sums required, giving you a greater degree of control each month.

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At Rangewell, our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.

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