What is a Merchant Cash Advance?

A Business (or Merchant) cash advance is a form of cash advance that’s made by a bank or specialist lender to a business. Business cash advances are often used by small businesses who may struggle to get typical Bank funding.

A business might take out a business cash advance to fund the purchase of new inventory, to open a new location, make other improvements or aid cashflow.

A business might take out a business cash advance to fund the purchase of new inventory, to open a new location, make other improvements or aid cashflow.

They typically have a simple eligibility criteria-

  • Trading and taking card payments for a minimum of 6 months
  • Minimum £5,000 average monthly card payments

Lenders will typically lend between £5,000 and £200,000. There are no APR’s, additional charges or late payment fees. Just one simple all-inclusive cost.

Unlike a conventional business loan, a merchant cash advance is often paid back via a certain percentage of the business’s credit card sales. This means that when business is good, a large amount of the loan is repaid; when business is slow, the borrower pays a smaller amount. Repayment will typically be between 5 and 10 months.

Merchant cash advances offer several advantages. First, they allow a business to access cash very quickly, often without the long approval process of a conventional business loan. Second, they’re frequently available for businesses with a poor credit score or no credit history at all. 

Because merchant cash advances don’t have fixed monthly payments, they’re also a good form of financing for businesses with unpredictable, inconsistent cash flow. 

Funding is open to most business sectors but is especially popular for pubs, bars, restaurants, hairdressers, beauticians, online businesses, retailers and garages (non car sales)

At ABL Business we can introduce you to such Specialist lenders, if you want to know more get in touch with us on 01274 965356 or email info@abl-business.co.uk.