Merchant Cash Advance

MCA's offer a flexible finance option for businesses that need quick cash, but might not qualify for traditional loans.

Access funds from £5k to £1 million
Repayments are linked to sales, thus supporting your cashflow
Typically approved within 24 hours

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Understanding Merchant Cash Advance

Merchant Cash Advance (MCA), sometimes known as Business Cash Advance is a way for businesses to get cash quickly by borrowing money against future sales. Unlike invoice financing which are secured against due invoices, Merchant Cash Advances are secured against card-based transactions.

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Please note this is not a quotation for finance, this is for illustrative purposes only. The figures are available to UK incorporated businesses only. The value provided is intended as a guide only. For an accurate quotation please contact us.

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Here's how it works in simple terms:

1. Apply Online: Using our online form, apply for MCA online, and receive a free, no-obligation quote.
2. Get Cash Now: Once approved, your business will receive a lump sum of money upfront.
3. Pay Back Later: Instead of making fixed payments, your business repays a small portion of its daily credit/debit card sales until the full amount is paid back. This deduction is typically around 10% of each card sale.
4. Repayment: As you would expect, the total amount paid back is more than what was borrowed because of added facility fees. For example, if your business borrows £10,000, you might have to pay back £13,000, depending on the specific terms agreed for your offer. Repayment is made daily and depends on how much your business earns each day, so if sales are slow, you’ll pay less that day, which helps preserve your cash flow.

Is My Business Eligible?

To qualify for Merchant Cash Advance, your business must:

Be a sole trader, partnership, or limited company.
Minimum trading history of 3 months, and must be currently trading.
Minimum card sales revenue of £5,000 per month.
Be registered in the United Kingdom.
Not have an active default.
Regularly process customer transactions using credit or debit card payments; these can be processed through card machines or merchant gateway providers, such as PayPal or Shopify.
The following business groups are excluded:
- Adult
- Gambling
- Vehicle Sales
- Firearms Sales
- Charities, and non-profit organisations

What Type of Businesses Is Merchant Cash Advance Suitable For?

MCA is a suitable form of short-term finance for small to medium-sized enterprises (SMEs) that primarily receive payments via credit or debit cards.

For businesses that are heavily affected by seasonal trade, such as certain hospitality or retail-based businesses, MCA is a suitable form of finance to deal with urgent capital requirements, such as:

Purchasing more goods to keep on top of unexpected demands, such as at Christmas.
Repairing or renovating equipment or property.
Covering expansion or growth costs.
Marketing or advertising campaigns
Working capital.

The Benefits of Merchant Cash Advance

Businesses can benefit from our MCA finance in several ways, such as:

Access funding within 24 hours (and in some cases, within the same day) to deal with unexpected cash flow shortages.
No APR or fixed monthly payments.
Instead, you repay via a percentage of your card sales (typically 3% - 30%).
High approval rates of over 80%.
Our process is transparent throughout, with no hidden costs.
MCA’s are typically unsecured finance so security is not required (other than Director Personal Guarantees).
Same day top-ups available (once more than 50% of the advance has been repaid.

How Can I Apply?

Applying for Merchant Cash Advance is simple:

Give our team a call on 01442 617 799, or use our enquiry form below. A member of our team will quickly get back to you for a no obligation chat about your requirements.
If you would like to go ahead, simply provide us with the required documentation, such as merchant account statements that prove monthly card sale revenue.
Your application will be reviewed and, if accepted, an offer amount, agreement and repayment terms will be sent directly to your business.
If you are satisfied with the offer and agreement terms, simply sign and return the agreement.
The funds will be transferred into your business account within 24 hours.

Don’t Let Your Business Suffer From Seasonal Cash Flow Worries

At Union Business Finance, we understand that there are many different factors which can cause unexpected cash flow demands. Therefore, we are committed to providing eligible businesses with access to finance to handle uncomfortable financial situations, keeping you on the right track.

Please contact us today to discuss your financial needs, and we will endeavour to provide you with an accurate quote promptly.

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FAQs

What can we use Merchant Cash Advance funding for?

Retailers are typically free to use the finance for almost any legitimate business purposes ranging from aiding cashflow, purchasing stock, buying new equipment (including funding deposits), hiring staff, refurbishment costs, tax bills and more.

How much funding can I access?

Typically funding will be in the region of 100 to 125% of the monthly card turnover, up to a maximum of 200%. Therefore, if a business turns over £40k per month in card transactions, you can typically obtain £40k in MCA funding).

Are there any early repayment fees?

No.

What are the repayment length terms for an MCA?

Traditionally, MCAs are repaid within 3 to 18 months. However, there are no conventional repayment terms since the repayment length for a Merchant Cash Advance depends on the volume of your card sales. The more credit and debit card sales are made, the quicker the advance can be repaid.

Is a Merchant Cash Advance different from a Business Cash Advance?

Merchant Cash Advances and Business Cash Advances are the same form of financing. These terms are used interchangeably, depending on the preference of the lender or broker; they offer no added benefit over each other since they are the same finance product.

Does this work if I process payments online?

Yes. The facility is repaid daily, by the lender automatically taking an agreed percentage of the card payments through the merchant's card machine(s) account.

Does this work if I process payments offline?

Unfortunately no. That’s because the agreed percentage value is automatically paid to the lender via your payment provider from your card transactions.

Does that mean I need to change our card machines?

No.

How long is the funding for?

On average, funding is typically requested for between 6 to 12 months and is intended to provide short term funding. However, once you have repaid over 50% of the advance, you can request a top-up if necessary.

What credit checks will you perform?

Credit checks for MCAs are usually less stringent than those for traditional forms of financing. Instead, we place more of a focus on your business’s cash flow management and card sales history. However, a strong credit history could help you secure more favourable terms

What if I have a poor business credit score?

Having a poor business credit score does not necessarily disqualify you from receiving the advance, since it is based on your past and future card sales. That being said, a very low credit score might result in less favourable terms, such as a lower advance amount or higher fees, so you should look to improve your business credit score.

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