Merchant Cash Advance for UK Businesses

A merchant cash advance provides fast funding based on your future card sales, with repayments taken as a small percentage of your daily card takings, so what you repay flexes with your turnover. Busy week, you repay more. Quiet week, you repay less. There is no fixed monthly direct debit to find when trade dips. Sadi's Commercial Finance is an NACFB and FIBA registered commercial finance brokerage and arranges merchant cash advances suited to your trading pattern.

Who it is for: shops, cafes, restaurants, pubs, salons, barbers, garages, gyms and online retailers that take regular card payments and want quick, flexible funding without fixed monthly repayments.

How a merchant cash advance works

A provider advances a lump sum, usually sized against your average monthly card takings. Repayment happens automatically at the point of sale: an agreed percentage of every card transaction, often somewhere between 10 and 20%, is split off and sent to the provider until the advance and its cost are cleared.

The cost is quoted as a factor rate rather than an annual interest rate. If you are advanced a sum at a factor of 1.2, you repay 1.2 times that sum in total, however long it takes. There is no separate monthly interest accruing, and the total you owe does not change if trade is slower than expected. It just takes longer to clear.

Key features

  • Repayments linked to turnover, not a fixed monthly amount
  • No fixed term, the advance clears when your card sales clear it
  • Quick approval and release, often within days
  • Usually unsecured, with no charge over property
  • Decision weighted heavily on card sales history rather than filed accounts
  • Top ups are often available once a proportion of the advance is repaid

Common uses

  • Refurbishment and shop or restaurant fit outs
  • Equipment purchases and replacements
  • Stock ahead of a peak trading season
  • Marketing campaigns to drive footfall
  • Covering an unexpected cost without disturbing a fixed loan
  • Bridging a seasonal dip in trade

How to get a merchant cash advance with Sadi's Commercial Finance

  1. Speak to a specialist. Tell us your average monthly card takings and what the funding is for. We respond the same working day.
  2. Share your card sales history. Recent merchant processor statements, usually four to twelve months, so providers can assess your trading pattern.
  3. Get matched with a provider. We compare providers on total cost and repayment percentage for your type of business.
  4. Approve terms. Review the advance amount, the factor rate, the total repayable and the daily percentage before accepting.
  5. Funds released. Money lands quickly, often within a few working days.
  6. Automatic repayment. An agreed percentage of daily card sales is collected until the advance is repaid, with nothing for you to administer.

What providers assess

Card turnover is the main test. Providers look at how much you take on card each month, how consistent that is across the year, how long you have been trading and how long you have been with your current card processor. Most want at least six months of card trading history, though some will look at less.

They will also check existing advances, since stacking multiple advances is the most common reason a business gets into trouble with this product. Filed accounts and personal credit matter less than they would for a bank loan, which is why an advance is often available to a business that a high street lender has declined.

What it costs

Cost is expressed as a factor rate applied to the amount advanced, so the figure to compare between offers is the total repayable, not a monthly rate. Some providers also charge a setup or admin fee. There is no separate early repayment saving on most advances: the total is fixed at the outset, so clearing it faster does not reduce what you owe, though it does free you up sooner.

A merchant cash advance is generally more expensive than a secured business loan. What you are paying for is speed, flexibility and the absence of a fixed repayment. That trade off is worth it for some businesses and poor value for others, and we will tell you which we think you are. Our broker fee is disclosed in writing before you commit.

How long it takes

Approvals are often quick because the decision is based largely on your card sales history, which the provider can read straight from your merchant statements. Many cases are agreed within 24 to 48 hours and funded within a few working days. There is no valuation and usually no legal work, which is what makes it one of the fastest forms of business funding available.

Case study

A café secured £25k to refurbish its interior, repaid via a small percentage of daily card takings.

Merchant cash advance compared with a business loan

A business loan gives you a fixed sum repaid in equal monthly instalments over a set term, usually at a lower cost, and it suits a business with predictable trading and a clear budget. An advance costs more but removes the fixed commitment, which matters a great deal if your takings swing between seasons.

The honest test is whether your card income is both strong and variable. Strong and steady, a loan is usually cheaper. Strong but seasonal, an advance often fits better. Weak or thin card income, neither is the answer and we would look at invoice finance or asset finance instead.

Why use a broker

Factor rates and holdback percentages vary widely between providers for the same business, and the headline offer often hides a setup fee or an aggressive daily split that squeezes cash flow harder than you expect. We compare providers on total cost and terms, and we will tell you plainly if we think an advance is the wrong tool for what you are trying to do.

We are registered with the NACFB and FIBA. We do not recommend taking a second advance on top of an existing one, and we will say so if that is what is being proposed.

Frequently asked questions

How is a merchant cash advance repaid?

Automatically, as a set percentage of your daily card sales, so repayments rise and fall with your income. There is nothing to remember and no fixed monthly payment date.

How fast can I get funded?

Approvals are often quick because the decision is based largely on your card sales history. Many cases are agreed within 24 to 48 hours and funded within a few working days.

Do I need to take card payments to qualify?

Yes. Because repayment is linked to card revenue, a consistent card sales record is key. Businesses paid mainly by bank transfer or invoice should look at invoice finance or a business loan instead.

How much can I borrow?

Advances are typically sized against your average monthly card takings, so the amount available scales with turnover. Providers vary in how far they will stretch, which is one reason to compare rather than take the first offer.

Is there a fixed term?

No. The advance clears when your card sales clear it. Most are designed to run somewhere between six and twelve months, but a slower trading period simply extends it rather than putting you in arrears.

Do I need to give security or a personal guarantee?

An advance is usually unsecured with no charge over property, though a personal guarantee from the directors is common. We will tell you exactly what any provider is asking for before you sign.

Will it affect my credit file?

Providers normally carry out a credit check, and the agreement may be recorded. Because underwriting leans on card turnover, historic credit issues are less likely to block an application than they would with a bank.

Can I take a second advance while one is running?

Some providers allow a top up once a proportion of the first is repaid, which is usually the safer route. Taking a second advance from a different provider on top of an existing one, known as stacking, compounds the daily deduction and is where businesses most often get into difficulty.

Related guides

Speak to us about a merchant cash advance

Send us your average monthly card takings and what the money is for, and we will tell you what is available and what it will really cost. We respond the same working day. Contact Sadi's Commercial Finance.