What is a merchant cash advance?
A merchant cash advance (MCA) is a form of business funding where a lender advances a lump sum against your future card sales. Instead of fixed monthly repayments, you repay via a small percentage of your daily card terminal income — automatically collected by the lender until the advance plus a fixed fee is repaid.
Because repayments flex with your revenue — lower in quiet periods, faster when business is strong — an MCA suits seasonal businesses or those with variable income.
How is the advance amount calculated?
Most MCA lenders advance between 50% and 150% of your average monthly card turnover. So if your business processes £30,000 per month in card payments, you may be able to access £15,000–£45,000. The factor rate (the total cost) is agreed upfront — typically 1.1 to 1.5 — meaning you repay £1.10–£1.50 for every £1 borrowed.
Who is a merchant cash advance suitable for?
MCAs are particularly well suited for retail businesses, restaurants and hospitality, gyms and fitness studios, salons and beauty businesses, and any business that takes a significant proportion of payments by card. You need a minimum monthly card turnover (typically £5,000+) and usually 6+ months of trading history.
Bad credit and merchant cash advances
Because MCAs are assessed on card turnover rather than credit score, they are one of the most accessible finance products for businesses with adverse credit. The lender's primary security is your future card revenue — not your personal credit history. CCJs, defaults and even recent bankruptcy are regularly considered.