Yes. Merchant cash advance loans are a legitimate form of business lending used by thousands in the UK.
Merchant Cash Advance: Funding from your card machine
The simple way to secure a Merchant Cash Advance for your business - that your customers repay for youSpeak to one of our experts020 4525 5312
- Cash advance - equivalent to your monthly turnover
- No repayment schedule
- No interest charges
- Repayments made when your card facility is used
Simple to arrange
- Ideal for retail and hospitality sectors
- Adverse Credit – no problem
- Arrangements tailored to your business
- Easy and fast to arrange
- Funds for any legal purpose
- Repayments keep pace with business
- No impact on other credit arrangements
- Supports growth
Merchant Cash Advance
The perfect solution for those who don't have assets but have a good volume of card transactions
Merchant cash advancing is amongst the most innovative products available in business financing.
Table of Contents
Merchant cash advancing allows businesses to use card terminals to secure lending—the perfect solution for those who don't have assets but do many card transactions.
What is a merchant cash advance?
Merchant Cash Advance - also known as Business Cash Advance - can provide a simple way to deal with short-term and seasonal cash issues – or to fund your business growth plans.
A merchant cash advance is a type of lending that is designed to help businesses flexibly gain access to cash. The lender will provide the company with a cash advance, and the business will then pay it back through a percentage of its customer's card payments used by the card terminal.
Merchant cash advances are the ideal solution for many businesses that use car terminals. It can be easier to access this than other forms of finance. This is the ideal solution for those who have no or very little assets or need capital but have a limited credit score.
Merchant Cash Advance, or Business Cash Advance (MCA/BCA), can provide cash advances that are typically equivalent to your monthly takings.
The advance is then paid back automatically as your customers make card payments. With many conventional lenders still reluctant to lend, it can provide a simple way for businesses, and especially those in the retail sector, to raise the funds they need.
How does merchant cash advance work?
A business will borrow a lump sum from a lender, and then they'll pay it back through card payments. Just like other types of finance, you can use the loan in any way to grow your business.
The lender will work directly with the card terminal provider, so they'll see how much money is going through the business. Unlike other types of lending, there's no need for credit checks.
A merchant cash advance will adapt to your business and how much money it makes. This will give you much more confidence in knowing if you can make the repayments. How much you'll be able to borrow will depend on things like annual turnover and how much you can repay in the lender's eyes.
Here at Rangewell, we work with many merchant cash lenders and help source the right deal for your business needs. So speak to our team today to start your merchant cash advance application to improve your future sales.
How much can you borrow?
With a merchant cash advance loan, the loan amounts can be as much as 100% of your average monthly card transactions between £5,000 and £50,000. So if you earn £7,000 per month from your PDQ machine, you'd qualify for a merchant cash advance of £7,000.
Most lenders will advance a maximum of one month's takings. They may look at an average of 3 months' trading to get a representative figure.
What are the advantages?
The main advantage of cash merchant advances is that it provides a lump sum with no restrictions, so you can use it however you want to help your business develop and grow. In addition, it's easier for small businesses to get finance as there is no need for credit checks, and there is minimal paperwork - money can be accessed quickly!
An MCA or BCA can bring you the funds you need fast, often in just days. Then it makes repayment automatically, with a set percentage of every credit card payment you take going straight to the lender.
It means your customers repay your cash advance for you.
What are the disadvantages?
A merchant cash advance can be risky, especially for small businesses. It takes a chunk of the cash that comes in, even when the sales are lower than usual, potentially putting a business under strain until the advance is paid off. The factor rate for an MCA is fixed and is applied to the entire cash advance upfront.
What are the criteria for qualifying?
If you're a business owner that uses a card terminal to take payments from customers, you'll be able to apply for a merchant cash advance. Any business that receives payment via a card terminal can get a merchant cash advance.
What can merchant cash advance be used for?
As a lender can quickly see what a business makes over a month, they can agree on a loan amount and a repayment plan much faster than another form of lending. So it can be a great solution to businesses who need cash fast.
Training and recruiting new staff
It's common knowledge that attracting and retaining employees is the key to the success of any ongoing business. In addition, this type of lending can free up the cash so that you can invest in their developments.
You can use the money from your lenders to purchase the inventory you need for your business to operate. At Rangewell, we can also offer inventory loans. This means that you'll repay what's borrowed over time and will usually pay it back with interest.
Purchasing new equipment
Equipment financing will provide your business with the funds to purchase or lease equipment you need in order to grow and operate. An equipment loan can help improve cash flow and will meet ongoing business expenses.
To find out more about repayments based on your monthly card takings, speak to Rangewell today. We can arrange a financial product to suit your needs, and we'll let you know about your loan approval rate chances.
Helping with your cash flow
Cash flow-based loans are a good way for businesses to manage credit costs efficiently. Asset-based loans are an alternative to merchant cash advance loans because this is a secured loan, it will have better credit terms.
Rangewell can offer you more flexible deals in comparison to a traditional bank loan or a traditional business loan. We can discuss your business plan in more detail and help you with your application process.
To find out more about merchant money lending through debit card sales, speak to Rangewell today.
Can you get a Business Cash Advance?
Technically an MCA/BCA is not a loan because it provides the money as an advance on your projected takings. This may mean that even businesses with an impaired credit rating may be able to use them to raise the cash they need.
It is also very simple to arrange. Because you already have a business arrangement with your card service provider, there should be no need for the usual checks and underwriting that are required if you apply for a loan.
If you use a card terminal - a PDQ machine - you can apply. Because the lender can see what the business makes over an average month they can agree on a loan amount and repayment rate fast. You can get cash in days, making it a great option if you don't have assets, or need finance fast.
If you're looking for a business loan to help grow your business, get in touch with our experts today. Our expert brokers can discuss your repayment terms and offer flexible repayments to suit your needs.
We'll discuss debit card payments, and how you can pay back a loan by using your future card transactions. Please be aware that if you make a late payment, your loan terms will change. Speak to your lender for more information
How Rangewell can help you
There are a growing number of lenders providing Business Cash Advance arrangements. Finding the most competitive deal for your business means finding the right lender.
At Rangewell, we can help. We know the lenders who can offer the most competitive rates for all types of finance - including BCA/MCA.
To get a better idea of cash advances based on credit card sales, speak to Rangewell today.
REAL EXAMPLES OF WHAT WE CAN DO
Find the most competitive lender for a pub wanting to raise cash to refurbish
Helped a seaside fish and chip restaurant raise cash to help them through the slow season
Source an arrangement to help an independent bookshop to set up a coffee area for customers
Find the most competitive deal for a petrol station to fund a new retail area
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Fast - the cash you want in daysApplications are easy, there’s no need for extra security – get the cash you want in days, and use it for any business purpose.
Flexible - money for any purposeBuy stock, fund growth, even help buy premises – or deal with temporary cash flow issues.
Automatic repayment - from your card takingsRepayment is automatic and the more business you do, the faster your advance is paid off.
No security requiredBecause there is no need for extra security it is much easier to set up than a traditional bank loan or overdraft.
No repayment schedule commitmentYour repayments keep pace with your business. No penalties if business is slow and repayment takes longer than anticipated.
Poor credit history?Business cash advance is not a loan – it is an advance on future earnings. Even businesses with poor credit rating may be able to use it to raise cash.
Download Rangewell’s free and detailed guide to Merchant Cash Advances
What are cash advances?
What do your card sales have to do with business financing?
Is Merchant Cash Advance a business loan to help with cash flow?
Does Merchant Cash Advance only consider debit card sales or credit cards also?
How do future card payments repay the agreement?
What kinds of small businesses are best suited to this type of business funding?
Do you have a monthly repayment schedule with MCA?
Does it take all card transactions into account?
Is MCA classed as a short term form of finance?
What do other business owners say about Merchant Cash Advance?
How do lenders calaulate the loan using transactions for an average month?
What is the average interest rate?
Why do lenders refer to it as 'future credit'?
Do I have to have a business card to apply for Merchant Cash Advance?
Is a Business Cash Advance the same business finance product?
What does the monthly repayment scheme look like?
Are there any similar products for businesses without a card machine or those who don't accept credit and debit card payments?
What percentage of the business card payments will be intercepted?
Will my credit scoring affect my monthly card repayments?
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Frequently asked questions
Have a question?
Cash advances do not affect your credit rating or credit score. But as this type of lending comes with high-interest rates and high fees, it may cause the balance on your account to grow quickly.
If you're a limited company or a sole trader, we can help grow your business. To get an estimate on your monthly repayments - Speak to Rangewell today.
When you take out a cash advance, there is no credit check. This is why it's suitable for those with a bad credit rating or credit history.
To find out how merchant cash advances work, and to find out more about future card sales, speak to Rangewell today.