Merchant Cash Advances
Merchant Cash Advances are a means of advancing funds to retail businesses against the retailers credit/debit card transactions to provide finance against future projected credit/debit card sales
In the current economic climate thousands of otherwise profitable retail and service businesses are unable to raise capital from traditional funders for investment in the growth of their businesses, or bridge the gap in their daily working capital.
In simple terms, the lender purchases, at a premium, the retailer’s future credit/debit card transactions to provide cash advances.
The loan is repaid at a mutually agreed percentage (usually between 10% and 20%) deducted from the future credit/debit card transactional income until the loan is repaid (usually 7 to 9 months)
The lender is repaid by retaining a pre determined percentage from each day’s business so only gets paid its percentage when the retailer makes a sale
Qualifying criteria:
- Client must be able to provide a minimum of 12 months card processor statements
- With an average minimum £3,500 aggregate value per month
- And a minimum average of 25 transactions per month
- Personal guarantees required for ‘Ltd’ companies
- Undertake the standard credit application process applicable to the lender
Client benefits can include:
- No application fees or hidden charges
- Cash advance provided in as little as 10 days from application
- No audited accounts or tax returns required
- Repayments directly linked to the borrowers income
- Funds can be used for any (legal) purpose
- Once 75% of the advance has been repaid further advances may be made available
