Merchant Cash Advance

A Merchant Cash Advance (MCA) is a type of financing where a lender advances a lump sum of money to a business in exchange for a percentage of the business's future sales. It's commonly used by small businesses that need quick access to capital to fund immediate expenses or growth opportunities.

The lender will provide a lump sum of cash to the business, which is typically repaid through a percentage of the business's daily credit and debit card sales. The repayment process continues until the advance is fully repaid, and the percentage of sales can vary depending on the agreement between the lender and the business.

Some benefits of a Merchant Cash Advance include quick access to capital, no collateral required, and flexible repayment terms based on the business's sales. Additionally, the application process is often quick and easy, and credit requirements may be less stringent than with traditional loans.

Some drawbacks of a Merchant Cash Advance include higher fees and interest rates compared to traditional loans, potential for long-term debt, and the possibility of cash flow problems if sales decrease. Additionally, some businesses may find the repayment process to be burdensome, as it involves a percentage of daily sales rather than a fixed monthly payment.

Eligibility requirements vary depending on the lender, but most lenders consider factors such as the business's credit score, length of time in operation, and monthly sales volume. Some lenders may also require collateral or a personal guarantee from the business owner.

  Business must be trading in the UK.

  Processing card payments for over 4 months.

  Taking a minimum of £2,500 a month in card sales.

The amount of funding available through a Merchant Cash Advance varies depending on the lender and the business's sales volume. Speak to the team at Switch365 to find out more!

The time it takes to receive funding with a Merchant Cash Advance depends on when funding is approved, from this point it should take up to 24 hours. Generally it takes up to 48 hours to be approved and receive funding.

The application process for a Merchant Cash Advance typically involves submitting an online application, providing documentation such as bank statements and credit card processing statements, and completing a credit check. Some lenders may require additional documentation or information depending on the business's circumstances.