Merchant Cash Advance, what is it?
Lending solutions aren’t only speaking to your bank manager these days. Many businesses need to consider faster and simpler lending, and some businesses may feel they have no options. Not all businesses can get lending through traditional pathways, which can also be slow and cumbersome. MCA may be suitable for you, and we also have options with other lending partners to consider.
"Lending tailored to you."
FOR MERCHANTS
If you've never used a merchant cash advance, here's the short version: a lender gives you a lump sum today; you repay it as a percentage of your card takings, every day, until the advance plus an agreed fee is paid back. There's no monthly payment, no fixed term, no "missed payment" letter — repayment scales with what the business actually earns. It's not a loan in the traditional sense. It's an advance against future revenue, settled automatically out of your card payment proceeds.
AN HONEST NOTE FROM TONY TO MERCHANTS
MCA is genuinely useful for the right business in the right moment — a refurb you'll repay out of the resulting uplift, a stock-up before peak, a hiring round before a strong quarter. It's an expensive way to fund routine cash-flow gaps. The dynamic-rules version we power with our lending partners is better than the flat-percentage version most platforms offer, but "better than" still means "work the maths". Ask us to walk through it, and our lenders partners will be happy to explain in full your costs and options.
What you get?
A lump sum of working capital, usually within a few days of application. Used for whatever the business needs — refurbishment, stock, hiring, covering a quiet month, taking advantage of a bulk-supply discount. No restrictions on use of funds in most agreements.
How you repay?
A fixed percentage of your daily card takings, every day, settled automatically. On a busy day you repay more; on a quiet day you repay less. No fixed monthly amount that has to be found regardless of trading. We are however trying to build a new approach, or more flexible lending. Dynamic ways to move this with variable rules, which work better for you – and hopefully the lender too.
Why would you take this over a loan?
Getting a loan from a bank can a tough, take a long time or for many businesses impossible. Things aren’t always foreseen in business, and some opportunities you may need to take quickly. Many merchants prefer this approach of not being a fixed monthly amount, certainly in seasonal businesses who need a flex in terms, or others who just like the method more than traditional lending. Sometimes MCA can be cost effective, certainly time effective, or the best option for you personally.
What it costs
A factor rate, not an interest rate. You agree up front to repay (for example) £12,000 against a £10,000 advance — the £2,000 is the lender's fee, fixed at the start, not compounding. Whether you repay in six months or twelve, the total stays the same.
Is this regulated?
One key point is this is unregulated lending. This does not mean in any way this is not ‘safe’ or right for you. It does mean we only look to work with well established providers, and those which we feel are the right cultural fit for our customers also.