All You Need to Know About Merchant Cash Advance
Tuesday April 07, 2020
A Merchant Cash Advance is a form of short-term business credit. However, unlike other types of finance, the repayments you make are based exclusively on the payments your business receives in the form of card transactions. These repayments are a percentage of the credit and debit card payments you receive. A Merchant Cash Advance might be suitable for your business if you want a flexible lending solution that fits with the fluctuations of your cash flow.
All You Need to Know About Merchant Cash Advance
Quick overview: A Merchant Cash Advance is a form of short-term business credit. However, unlike other types of finance, the repayments you make are based exclusively on the payments your business receives in the form of card transactions. These repayments are a percentage of the credit and debit card payments you receive. A Merchant Cash Advance might be suitable for your business if you want a flexible lending solution that fits with the fluctuations of your cash flow.
What is a Merchant Cash Advance? All You Need to Know About Merchant Cash Advance
A Merchant Cash Advance, also known as a Business Cash Advance, can provide your business with between £2,500 and £300,000 in funding (other lenders offer differing upper and lower lending amounts).
The repayments for a Merchant Cash Advance are variable, depending on how much you take in payments via your card terminal. These repayments are calculated at the end of each working day using a pre-agreed percentage of your total card sales. The adaptable nature of percentage-based repayments provides the unique advantage of flexing to your cash flow.
Merchant Cash Advances are an unsecured form of finance, so you won’t need to provide property or a business asset as collateral.
Are you Eligible for a Merchant Cash Advance?
In order to be eligible to apply for a Merchant Cash Advance your company should take a high percentage of its payments via card terminal. Your company must also:
What are Merchant Cash Advances Commonly Used For?
Merchant Cash Advances are used by companies ranging from pubs and bars to shops and restaurants, and are perhaps most commonly used by companies in the leisure and retail sectors.
Businesses often use Business Cash Advances for:
Merchant Cash Advances - A Working Example
Your company processes £5,000 in monthly card sales. This makes you eligible for a £5,000 Merchant Cash Advance. The finance is unsecured with no APR or a fixed term of repayments. How much you repay depends on the amount of card sales you receive each month. Repayments are made as a percentage of each and every card payment.
Alternatives to Merchant Cash Advances
InfinityPay Merchant Cash Advance versus the Typical High Street Loan
InfinityPay provides payment solutions to businesses of every size and in all industries. Whether front of house or over the phone, online or on-the-go, our business is payment innovation that can grow your business.
So, how can we help you?
01642 262866 | info@infinitypay.co.uk
Quick overview: A Merchant Cash Advance is a form of short-term business credit. However, unlike other types of finance, the repayments you make are based exclusively on the payments your business receives in the form of card transactions. These repayments are a percentage of the credit and debit card payments you receive. A Merchant Cash Advance might be suitable for your business if you want a flexible lending solution that fits with the fluctuations of your cash flow.
What is a Merchant Cash Advance? All You Need to Know About Merchant Cash Advance
A Merchant Cash Advance, also known as a Business Cash Advance, can provide your business with between £2,500 and £300,000 in funding (other lenders offer differing upper and lower lending amounts).
The repayments for a Merchant Cash Advance are variable, depending on how much you take in payments via your card terminal. These repayments are calculated at the end of each working day using a pre-agreed percentage of your total card sales. The adaptable nature of percentage-based repayments provides the unique advantage of flexing to your cash flow.
Merchant Cash Advances are an unsecured form of finance, so you won’t need to provide property or a business asset as collateral.
- No fixed-monthly payments - Repayments which change according to your revenue
- Good chance of acceptance - 90% application approval rate
- Fast - Apply in minutes, receive the funds within days
- Simple - No business plan needed
- Free from security - No collateral required
- Short-term - Pay back terms of between 6 - 12 months
Are you Eligible for a Merchant Cash Advance?
In order to be eligible to apply for a Merchant Cash Advance your company should take a high percentage of its payments via card terminal. Your company must also:
- be UK-based and be a sole trader, partnership, or limited company
- been trading for at least 6 months
- have a monthly turnover of at least £6,000
- process a minimum monthly credit and/or debit card sales of £5,000
What are Merchant Cash Advances Commonly Used For?
Merchant Cash Advances are used by companies ranging from pubs and bars to shops and restaurants, and are perhaps most commonly used by companies in the leisure and retail sectors.
Businesses often use Business Cash Advances for:
- Unexpected bills
- Cash flow challenges
- Stock upgrades
- Business premises refurbishment
- Cash flow improvement
- Seasonal sales adaption
- Taking an opportunity for growth - such as purchasing a one-off deal on stock
Merchant Cash Advances - A Working Example
Your company processes £5,000 in monthly card sales. This makes you eligible for a £5,000 Merchant Cash Advance. The finance is unsecured with no APR or a fixed term of repayments. How much you repay depends on the amount of card sales you receive each month. Repayments are made as a percentage of each and every card payment.
Alternatives to Merchant Cash Advances
- Short term business loan
- Invoice financing or factoring
- Overdraft
- Small business line of credit
- Financing from your payment processor
InfinityPay Merchant Cash Advance versus the Typical High Street Loan
| InfinityPay Merchant Cash Advance | Typical High Street Loan | |
| Funding amount | £2,500 and £300,000 | £1,000 and £25,000 |
| Minimum credit status required? | Poor | Good (for the best possible interest rates) |
| Able to make additional repayments? | Linked to daily turnover | Lender and terms dependent |
| Repayment terms | Between 6 months and 3 years | Between 12 months and 10 years |
| Repayment method | A variable daily amount based on card sales (usually between usually 5 – 25%) | Fixed monthly amount paid on a set date |
| Top-up or renew option? | Possibly, depending on provider once some or all of the advance has been repaid | Only with certain ‘revolving’ loan types |
InfinityPay provides payment solutions to businesses of every size and in all industries. Whether front of house or over the phone, online or on-the-go, our business is payment innovation that can grow your business.
So, how can we help you?
01642 262866 | info@infinitypay.co.uk
