Loans Hub · Card-Based Funding
Merchant Cash Advance
Raise £5,000 to £300,000 against your card takings and repay a small, fixed percentage of each sale. No fixed monthly payment, no assets at risk — built for retail, hospitality and e-commerce.
Merchant cash advance cost calculator
Illustration only. A factor rate of 1.2 on £20,000 means £24,000 repayable. Payback speed depends on your card takings and holdback.
What is a merchant cash advance?
A merchant cash advance turns your future card sales into upfront cash. The lender advances a lump sum and then collects repayment automatically as a fixed percentage — the “holdback” — of every debit and credit card transaction you take. Because repayment flexes with your takings, you pay back faster in busy periods and slower when trade is quiet.
There is no fixed monthly payment and no fixed end date. The cost is set by a factor rate rather than an interest rate, so a £20,000 advance at a 1.2 factor rate means you repay £24,000 in total. Use the calculator above to model your own numbers in seconds.
How a merchant cash advance works
The mechanics are simple, which is part of the appeal:
- You receive a lump sum based on your average monthly card turnover.
- A fixed percentage of each card sale (the holdback) is taken automatically as repayment.
- Repayment continues until the agreed total (advance × factor rate) is cleared.
- No card sales that day? You repay nothing that day — repayment only moves when you trade.
This is fundamentally different from a fixed unsecured business loan, where you owe the same amount every month regardless of how trade is going.
What it costs — factor rates explained
Unlike a loan, an MCA isn’t quoted as an APR. Instead you’re given a factor rate, usually between 1.1 and 1.5. Multiply the advance by the factor rate to get the total repayable:
- £10,000 advance × 1.25 = £12,500 total repayable
- Repaid as, say, 10–15% of daily card takings (the holdback)
- Typical payback period is 6–12 months, depending on your turnover
The convenience and flexibility come at a higher effective cost than standard term lending, so an MCA is best when card income is strong and you value flexible, sales-linked repayments.
Who merchant cash advances suit
An MCA is built for businesses that take a high share of income by debit and credit card, such as:
- Shops and retailers
- Restaurants, cafés, pubs and takeaways
- Hair and beauty salons
- E-commerce stores using card gateways
Because approval is driven by card turnover rather than credit history, an MCA can be available to businesses that would struggle to get a traditional loan. Funding is typically £5,000 to £300,000 and can arrive within 48 hours.
Pros and cons at a glance
Advantages
- Repayments flex with your sales
- No fixed monthly payment to find
- No assets used as security
- Bad credit frequently accepted
- Fast, often within 48 hours
Things to weigh up
- Higher effective cost than a term loan
- Only suits card-reliant businesses
- Daily holdback reduces working cash
- Not regulated like consumer credit
Eligibility for a merchant cash advance
To qualify you’ll generally need to:
- Take card payments through a terminal or online gateway
- Process a minimum monthly card volume (often £5,000+)
- Have traded for at least 4–6 months
- Provide recent card-processing statements
No assets are required and there’s no fixed repayment, which is why card-reliant businesses favour this product. We match your card-turnover profile to the providers most likely to fund you on the best factor rate.
It takes under a minute — and enquiring never affects your credit score.
Frequently asked questions
How is a merchant cash advance different from a loan?
A loan has a fixed monthly repayment and an interest rate (APR). An MCA has no fixed payment — you repay a set percentage of your card takings until the agreed total is cleared, and the cost is set by a factor rate, not an APR.
Do I need a good credit score for an MCA?
Not usually. Lenders focus on your card turnover because repayments come straight from your sales. This makes an MCA accessible to many businesses with imperfect credit, though stronger profiles get better factor rates.
What is a holdback or retrieval rate?
The holdback is the percentage of each card sale that goes towards repaying the advance — commonly 10–20%. A higher holdback clears the advance faster; a lower one keeps more cash in the business day to day.
How much can I get with a merchant cash advance?
Advances are typically £5,000 to £300,000 and are sized on your average monthly card takings — often around one month of card turnover, sometimes more for strong, established traders.
Is a merchant cash advance regulated?
Merchant cash advances are a form of commercial finance and are not regulated in the same way as consumer credit. Always check the total repayable, the factor rate and the holdback before signing, and make sure repayments are affordable.
Can I repay a merchant cash advance early?
Because the cost is fixed by the factor rate rather than daily interest, repaying early usually doesn’t reduce the total owed unless the provider offers a discount. Always confirm the early-settlement terms before you sign.
What happens in a quiet sales period?
You simply repay less. Because the holdback is a percentage of card sales, a slow week means a smaller repayment that week — one of the main reasons seasonal businesses choose an MCA.
How quickly can I get funded?
Because the decision is based on card-processing data, an MCA can be approved within 24–48 hours of providing your card statements, with funds following shortly after.