One week sales are strong, the next week payments are slow to come in. But, the usual expenses such as the wages for your employees, monthly rent, and stocks don’t wait for you and they don’t will not give you a break. This is an act of ongoing balancing as long as the business exists, and it even exists in us individually, just not at the extent of businesses.
We know that traditional bank loans aren’t always the easiest since they are more likely to require more from you and not only that, the approval takes weeks, and after the waiting, approval is still not guaranteed. Not unless if you have millions in your bank account but what about those who don’t?
This article will tell you the advantages merchant cash advances bring, which industries use it the most, how you can choose the right company to coordinate with and if it is the right move for your business.
What is a Merchant Cash Advance?
A merchant cash advance is a funding where businesses, usually those relying on debit or credit card sales borrow an amount and paying them monthly through a specific percentage of future sales.
Here’s how it works in simple terms: a provider gives your business an advance, and you repay it gradually through a percentage of your daily or weekly card transactions. The more you sell, the quicker you pay it back. If sales slow down, your repayments adjust as well.
Because repayments are tied directly to your turnover, an MCA is often described as a flexible funding solution. It’s designed for businesses that rely heavily on debit and credit card sales, such as shops, restaurants, or service providers.
Unlike a bank loan, there’s no long application process, no fixed collateral required, and approvals are generally faster. This makes MCAs attractive to businesses that might not qualify for traditional lending but still need reliable access to working capital.
A Sample Merchant Cash Advance in Practice
To make things clearer, let’s walk through a simple example of how a merchant cash advance might work for a business.
Imagine a restaurant in London that has steady card sales of about £20,000 per month. The owner wants to refurbish the dining area before the busy holiday season but doesn’t have enough savings to cover the cost upfront. Instead of applying for a traditional loan, they decide to use a merchant cash advance.
The provider offers them £25,000 upfront, with repayment taken as 10% of their daily card sales. There’s a fixed cost added (let’s say £5,000), so the total repayment amount is £30,000.
Here’s how it plays out:
- On a busy weekend, the restaurant brings in £3,000 in card payments. That day, £300 (10%) goes directly to the provider.
- On a slower weekday, card sales might only reach £1,000. That day, the repayment is just £100.
- Over several months, the advance is fully repaid. During quieter weeks, the restaurant pays back less, which eases the pressure on cash flow.
By the time repayments are complete, the restaurant has a new dining space that helps boost future revenue, all without the stress of fixed monthly instalments.
How Does a Merchant Cash Advance Work?
A merchant cash advance is built around the idea of future sales. Instead of asking for fixed monthly payments like a bank loan, the provider takes a percentage of your card transactions until the advance is fully repaid.
Here’s the general process:
- Application – A business applies for an MCA by showing recent sales history, usually card sales.
- Advance provided – Once approved, the provider gives a lump sum of cash upfront.
- Repayment through sales – A small percentage of your daily or weekly card takings is automatically deducted to pay back the advance.
- Completion – Repayments continue until the full amount, plus agreed fees, is paid back.
You don’t have to worry about fixed payments anymore regardless if your sales are slow or if it is high. The amount you owed will be paid soon just as long as you have sales.
What a Company Needs to Secure a Merchant Cash Advance
Getting approved for a merchant cash advance is usually more straightforward than applying for a traditional business loan. Instead of digging deep into your credit history or asking for physical assets as security, providers mainly want to see that your business has steady card sales.
Here are the typical requirements most companies need to meet:
- A Record of Card Sales
Since repayments are taken from card transactions, providers will want to see at least three to six months of card payment history. This helps them judge whether your business brings in enough revenue to support the advance. - Minimum Monthly Turnover
Most providers set a threshold — for example, £5,000–£10,000 per month in card sales. If your business regularly takes in this amount (or more), you’re more likely to be approved. - Business Trading History
While you don’t always need years of trading behind you, many lenders prefer that your business has been operating for at least 3–6 months. Some may ask for longer, depending on the size of the advance you’re seeking. - A UK Business Bank Account
Since funds are deposited directly and repayments are linked to your takings, you’ll usually need a dedicated business bank account in the UK. - Basic Documentation
Compared to traditional loans, the paperwork is lighter. In most cases, you’ll just need to provide bank statements (3-12 months), merchant processing statements, and proof of identity for the business owner(s).
Advantages of a Merchant Cash Advance
- Fast Access to Cash
Traditional loans can take weeks to process, but MCAs are usually approved quickly. Many providers release funds within days, making it ideal for urgent expenses. - Flexible Repayments
Instead of fixed monthly payments, repayments are tied to your card sales. If business is slow, your repayment amount is lower. If sales are strong, you pay back faster. - Simple Qualification
Providers focus on your sales history rather than strict credit checks or heavy paperwork. This makes MCAs more accessible to small businesses or those who might not qualify for bank loans. - No Collateral Required
Unlike some traditional financing, you don’t need to secure the advance with property or assets. Your future card sales act as the guarantee. - Keeps Your Business Moving
With quick funding and repayments that match your cash flow, an MCA can help you handle expenses like stock purchases, equipment upgrades, or even covering short-term operating costs without putting unnecessary strain on your business.
What Businesses and Industries Commonly Use Merchant Cash Advances?
Merchant cash advances are most useful for businesses that rely heavily on debit and credit card transactions. Since repayments are tied directly to sales, industries with regular card payments often benefit the most.
Here are some examples:
Retail Stores
Shops that sell clothing, electronics, or everyday goods often experience busy and quiet seasons. An MCA helps them manage cash flow during slower months while preparing for peak seasons.
Restaurants and Cafés
Food businesses usually deal with daily card transactions, making them ideal candidates. They may use an MCA to buy new kitchen equipment, fund renovations, or cover supplier bills.
Hospitality and Tourism
Hotels, travel agencies, and leisure businesses experience seasonal fluctuations. With an MCA, they can access cash quickly to manage staff costs or prepare for peak holiday periods.
Salons and Personal Services
Hairdressers, spas, and beauty salons often rely on card payments. An MCA gives them flexibility to expand, bring in new products, or handle unexpected expenses.
E-Commerce Businesses
Online stores processing card payments every day can use merchant cash advances to invest in stock, marketing campaigns, or new technology.
Gyms and Fitness Centres
With steady membership payments made via cards, fitness businesses are in a good position to use MCAs for upgrades, expansions, or promotional offers.
How to Choose a Company for Merchant Cash Advance
If you come to a conclusion that merchant cash advances are the best move for your business, then the next step is to identify the ideal company to work with since not all providers are the same and they have their own terms. So it is wise to scour the internet before making a move and compare fees and rates. However, here is a quick guide on the ideal company for you:
- Transparency in Fees
A good company will not only feel good at the start but through the rest of the ongoing process, but before that, you must feel comfortable talking with them on the fees. They should be able to make you understand and clear all your doubts and not rush you in making a decision. - Speed of Funding
It only takes 24-48 hours for the funds to be available in your account. Longer than that would mean there is something fishy going on with that particular company since the whole point of MCA’s is to give you quick cash. - Reputation and Support
Choose the company that is not all about money but puts you first. Read their reviews on the internet to see if they really do take care of their customers. Some may not have enough credibility on the internets surface but be careful, have a feel with them first by talking to them via call. - Flexibility in Terms
MCA’s are supposed to be highly flexible, they are what you call “pay-as-you-earn”. This means that when sales are slow, the payments are also low, when sales are high, the payment is proportionally high. So you don’t ge stuck with the same amount monthly regardless of sales. This is what you should be able to encounter. - Alternatives They Offer
An MCA is only one type of business funding. Some finance companies, like MacManus Asset Finance, provide a wider range of solutions such as asset finance or invoice finance. Working with a company that offers options means you can explore different routes and choose the one that best suits your needs.
Where You Can Get a Merchant Cash Advance in UK
If you’re based in London and exploring MCA options, several reputable providers are worth checking out. Here’s a look at some standout options:
- Lloyds Bank (via Liberis)
If you’re already using Lloyds Bank’s Cardnet service, you can apply for an MCA through their partner, Liberis. This option offers a fixed cost structure, with repayments automatically deducted as a percentage (3%) of your card transactions, and funds can land in your account within two working days after approval. - Liberis (directly)
Liberis also works with non-bank customers across the UK. If your business processes at least £1,0p00 monthly in card sales, you may be eligible. The approval process is fast—many businesses see funds within 48 hours—and you repay via daily or weekly sales with a single flat fee instead of interest. - 365 Finance
London-based and award-winning, 365 Finance offers fast and flexible MCAs (branded Rev&U™), at least £10,000. Approval decisions can be made within 24 hours, and repayments are automatically deducted as a percentage of your daily card sales—so you pay more when business is booming and less when it’s slow
- Liquid Corporate Finance
Based in London, Liquid Corporate Finance offers MCAs up to 2× your monthly card turnover (£1,000 – £500,000). They’re known for fast decisions (within hours), low documentation requirements (none if under £100k), and a fixed-fee repayment structure with no collateral needed. - AptPay
AptPay serves London-based businesses specifically—offering flexible MCA solutions with fast approval (often within 24 hours) and funds in as little as two days. - Tower Leasing
Serving across the UK (including London), Tower Leasing offers MCAs from £5,000 up to £1 million, typically based on up to twice your monthly card sales. They pride themselves on fast approvals (as quick as 24 hours), no homeowner guarantees, and the opportunity for top-ups once you’ve repaid 50% of your advance.
Is a Merchant Cash Advance Suitable for Startups?
Merchant cash advances are generally not ideal for very early-stage startups because providers rely on a history of card sales to approve funding. If your business is brand new and hasn’t built up at least a few months of transaction history, you’ll likely struggle to qualify. However, once a startup has been trading for a while and consistently takes in card payments, an MCA can become a useful tool for managing cash flow or funding growth.
What MacManus Asset Finance Offers
At MacManus Asset Finance, businesses can access a wide range of funding solutions tailored to different needs:
- Business Loans – Unsecured up to £500,000, with terms from 3 months to 5 years. Ideal for working capital, growth, or general business needs.
- Asset Finance – Spread the cost of equipment, machinery, or commercial vehicles while keeping cash reserves free for other priorities.
- VAT Loans – Loans starting from £10,000 to £2,000,000 to cover VAT bills without disrupting cash flow.
- Invoice Finance – Turn unpaid invoices into instant working capital to manage cash flow gaps.
- Car & Vehicle Finance – Car financing solutions for business and high-income individuals of up to £2,000,000 with 1 to 5 years term.
