How a Merchant Cash Advance works
A Merchant Cash Advance provides a lump sum of capital to your business, repaid automatically through a small percentage of your daily card transactions. There are no fixed monthly payments, repayments naturally adjust to your cash flow.
This makes it particularly well-suited to businesses with seasonal fluctuations or variable revenue. When sales are strong, you repay faster. When things slow down, your repayments reduce automatically.
How it works in practice
£5,000
Advance amount
£6,000
Total repayment
10%
Card sales deduction
Around 6 months
Typical repayment
With average monthly card sales of £10,000, approximately £1,000 per month is repaid automatically. The advance typically settles in around 6 months, though this flexes with actual sales volume.
Key Benefits
No fixed repayments
Repayments are tied to your card sales, you only pay when your customers pay you.
Fast access to capital
Receive funding within days based on your merchant account performance.
No interest charges
The cost is a transparent factor rate agreed upfront. No APRs, no hidden fees.
All credit profiles
Funding is based on your business performance, not just your credit score.
Borrow £10,000 to £300k
Based on monthly card turnover, with some businesses qualifying for up to 150% of monthly sales.
Minimal paperwork
Some lenders access your merchant statements directly, speeding up the process.
Useful resources
Related at Funding Flow: unsecured business loans, invoice finance, merchant cash advance calculator.
Official references: Bank of England base rate.
Estimate your monthly cost
Get an indicative quote in seconds. No sign-up required.
Merchant cash advance estimator
Estimate how much you could borrow based on your card takings.
Illustrative only, not a quote. Advance £1,000 to £1,000,000.
Factor rate: 1.25. A factor rate of 1.25 means a £10,000 advance costs £12,500 in total.
Calculations are illustrative only. Actual rates, terms and fees are deal-dependent and vary by lender, business profile, and security. Speak to your broker for a tailored quote.
Frequently asked questions
Not sure which product is right?
Ask Flo, our AI finance assistant can guide you through your options.