Merchant Cash Advance
Merchant Cash Advances offers your business an upfront straightforward, affordable business loan alternative. A new unsecured business loan alternative for a growing business. As an exciting funding option for small businesses and SMEs, we support your application and journey to a short-term cash injection with no APR or hidden costs!
- Short-term cash injection: Ideal for both busy and quiet periods as a cash boost
- Alternative funding option: A cash injection between £3,000 and £200,000 to support your business's cash flow needs.
- No hidden costs: No APR or hidden costs. Simply an agreed repayment plan from future sales typically over 6 to 9 months
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- Tailored Solutions for Your Unique Goals
- Dedicated Support from Start to Finish
- Transparent and Trustworthy Approach
What is a Merchant Cash Advance?
Here at Winchester Corporate Finance, we offer merchant cash advances in the UK for quick and easy funding for small businesses.
A merchant cash advance, commonly known as an MCA, is a short-term financial option for your business to advance funds against future card sales.
In an MCA, lenders give the business an initial lump sum of cash, which the company pays back by using a portion of its credit card sales, along with any additional fees.
Unlike traditional small business loans, companies can secure an MCA without needing to provide collateral, such as property or inventory, to receive financing.
How Do Merchant Cash Loans Work?
The repayment process for a Merchant Cash Advance (MCA) is quick and simple and works as easily as these three steps to minimise disruption:
- Establish your business’s factor rate: This is a decimal representation of the interest rates for your business financing, before giving a lump sum loan. The lenders will agree to a set percentage of each transaction to go through the PDQ machine in advance so that there is full transparency in the schedule.
- Easy repayment options: Repayment is made through daily, weekly, or monthly deductions based on a percentage of the company’s sales, along with any interest, until the total amount is fully repaid.
- Repayment terms adjusted: MCAs do not have fixed repayment terms, instead they adjust according to your sales. The more credit or debit card transations made, the quicker the advance can be paid off. Your business will need to be making monthly transactions of around £5k in card volumes to qualify for card revenue, your merchant statements will provide your sales volume information.
This optimised process enables businesses to obtain the required funds quickly, therefore minimising any potential delays.
Advantages of Merchant Cash Advances for Your Business
Merchant cash advances are the perfect solution for your business when looking for short-term funding in as little as 48 hours.
Flexible repayments: A business line of credit provides better flexibility compared to a secured loan. It can be used by your business for various purposes such as buying stock or a payroll change.
Instant access to funds: Accessing an MCA can be easier than applying for a small business loan as it requires less documentation, making the application process faster and the funds can be in your account in as little as a few hours.
Adaptable repayment plans: We can provide you with workable repayment terms to accommodate the growth of your business. The amount set and agreed is usually around 10% per transaction, this is deducted from future card payments/ sales and goes towards paying back the loan.
Build your company credit: Getting a merchant cash advance loan from us allows you to establish a positive payment history that appears on business reports- improving your credit score in the long term.
"We believe our service offers UK businesses an alternative to traditional bank lending."
Merchant cash advances are designed for small businesses without the need for a business plan. Lenders may want to take a look at your credit history by way of a soft credit check, which is less intrusive compared to other types of borrowing, and do not leave a footprint. Our team of experts at Winchester Corporate Finance will be able to answer your questions and guide you throughout the entire process. We value our reputation for transparency and our ability to meet the specific funding needs of the businesses we work with.
Merchant Cash Advance Loan Requirements
To receive a merchant cash advance, you usually need to present several, essential identification documents. These include proof of identity, recent bank statements, and merchant processing statements that demonstrate a consistent volume of card sales.
Typically, lenders do not conduct extensive credit checks or require collateral, as the loan’s repayment is based on anticipated future card sales. This makes MCAs an attractive financing solution for businesses that may have limited credit history or available assets.
Flexible Loan Repayment Terms Available
Our agreement terms include information on the set requirements such as the payback, advance amount, and holdback percentage. These will be discussed before an agreement between both parties is made. Once the agreement is finalised, the advance is transferred to the business’s bank account in exchange for a future percentage of receivables or card receipts, these are your customer card transactions.
During each credit/debit card transaction the percentage amount will be pre-agreed and withheld according to the terms of the agreement.
The withheld percentage will pay back the sum that was initially borrowed. This practice will continue until the advance has been paid. The process is done instantly by the lender being able to access a business owner’s merchant account, eliminating the collateral required for a traditional small business loan.
A fixed percentage is taken from every sale, meaning that the more payments (transactions) the faster the advance is repaid. This rule also applies if the business has fewer transactions in a particularly slow month. The balance will still be getting paid but within less time. Meaning the business pays back the advance that is tailored directly to the business intake of merchant cash deposits. Merchant cash advance repayments are taken from your revenue. The agreed 10% figure doesn’t refer to interest, but rather the proportion of your revenue that will go towards paying back the total loan amount. If you borrow 10k you will repay 10k. There is no set repayment term if it is predicted the business will repay the total advance amount of £10k in approximately ten months, the payback period is flexible and may be shorter or longer, depending on sales. You only pay back when you sell to customers. Although average repayment times tend to be 6 to 9 months as there is no fixed repayment schedule.
Why Choose Winchester Corporate Finance?
At Winchester, we have provided over £100 million in funding for small businesses since 2018. Trust the expertise of our experienced, honest and transparent advisors when applying for your next business loan.
Growth: Our sourcing process provides you with a clear picture of what your lending options are
Family First: Peace of mind that we will look after you and your business by building a trusting relationship through sharing knowledge and full process transparency.
Integrity: We will continue to search for funding until we find the most suitable finance option for your business.
With Winchester, you can count on a seamless and stress-free experience from start to finish. So why wait? Apply Today!
Frequently Asked Questions
Do I need a good credit history for merchant cash advances?
A good credit history is not required for a merchant cash advance. Your business’s cash flow and sales history is taken into consideration rather than your company credit score to maximise availability to UK businesses.
What is the difference between a cash advance and a merchant cash advance?
A merchant cash advance is akin to business cash advances, but small business borrowers get an advance based on anticipated credit card sales. A business cash advance is repaid through a fixed, automated withdrawal made daily or weekly, depending on the cash flow.
