August 1st, 2023.

Merchant cash advance is the fastest-growing area of business funding, enabling businesses to raise working capital against till sales. It’s a new way of funding driven by technology.

What is a merchant cash advance?

A merchant cash advance, or MCA, is short-term funding for businesses which accept debit and credit card payments. Merchant cash advance lenders provide businesses with an upfront sum of money and the advance is paid as a percentage of their ongoing future credit card sales. Your business repays the MCA using a percentage of its card transaction sales, plus fees.

One attraction is that you don’t need to offer up assets for security, such as property or inventory, to access funding.

How much can I borrow?
Broadly speaking, you could borrow up to 150 per cent of your monthly card sales. A lender wants to see that you have been trading for a minimum of three months and have a card transaction turnover of at least £10,000 per month.

Typically, lenders will advance from £2,500 to £300,000 conditionally linked to turnover.

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How does a merchant cash advance work?
First, once you have decided how much you want to borrow, you and the lender agree the percentage repayment corridor of debit/credit card sales.

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