Merchant Cash Advances are a means of advancing funds to retail businesses against the retailer's credit/debit card transactions to provide finance against future projected credit/debit card sales.
In the current economic climate many otherwise profitable retail and service businesses are unable to raise capital from traditional lenders for investment in the growth of their businesses or bridge the gap in their daily working capital, because they don't have the required security.
How does it work?
These facilities are available whichever merchant's card, and terminal provider, a business uses.
In simple terms, the lender purchases, at a premium, the retailer’s future credit/debit card transactions to provide cash advances of up to 120% of average monthly card turnover.
The loan is repaid at a mutually agreed percentage (typically between 8% and 20%) deducted from the future credit/debit card transactional income until the loan is repaid.
As the lender is repaid the outstanding capital and interest by retaining a predetermined percentage from daily card transactions, the retailer only pays its percentage when making a sale, so when business is slower, repayments reduce.
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- Limited companies, sole traders and partnerships
- Client must be able to provide a minimum of 6 months card processor statements
- With an average minimum £3,500 aggregate value per month
- Personal guarantees required for ‘Ltd’ companies
- Satisfactory completion of the standard credit application process applicable to the lender
Client benefits include:
- 24 hour approval - 90% approval rate
- No application fees or hidden charges
- Cash advance provided in as little as 10 days from application
- Repayments directly linked to the card income to maintain affordability. Level of repayments directly linked to volume of trade
- Funds can be used for any (legal) purpose
- No early settlement charges
- 'Top-up' advances may be made available
- No security or Business Plans required