Merchant Cash Advance and Your Payment Processor: Do You Need to Switch?

Quick answer: do you need to change payment processor for a merchant cash advance?

No. Taking a merchant cash advance does not automatically mean you need to change your card processor.

However, merchant cash advance repayments are often linked to the sales your business processes, so your existing payment setup can form an important part of the funding arrangement.

Depending on the provider, repayments might involve:

• a percentage being deducted automatically from card sales
• your card processor sending settlement through an account used to calculate and collect the agreed repayment percentage
• an integration between the finance provider and your payment platform
• another revenue-based repayment arrangement.

Some merchant cash advance providers can work with numerous card processors. Others may require a particular repayment or settlement arrangement.

This means the right question is not simply:

“Will I have to change card processor?”

It is:

“How will this merchant cash advance collect repayments from my sales, and is that structure compatible with my existing payment provider?”

This should be established before accepting the finance, particularly if your business has multiple Merchant IDs, several payment channels, subscriptions, an integrated EPOS system or plans to change payment provider.

Find Your New Processor

Why are merchant cash advances connected to card processing?

A traditional business loan will commonly have scheduled repayments that are separate from the way a business accepts customer payments.

A merchant cash advance can work differently.

The amount collected is often linked to future sales.

For example, an arrangement could provide:

• £30,000 of funding
• an agreed total amount to be collected
• a repayment percentage linked to future card sales.

If the agreed collection percentage was 15%, part of the revenue generated through the relevant sales channel would be allocated towards the outstanding advance.

Higher sales can therefore mean more money is collected during that period, while lower sales can result in a lower collection amount.

This link between sales and repayment is why the payment processor can become important.

For a detailed explanation of costs, factor rates and repayment structures, read our Merchant Cash Advance UK guide.

How can MCA repayments be collected?

There is no single repayment structure used by every merchant cash advance provider.

Understanding the collection method is important because it determines how closely the finance is connected to your payment infrastructure.

1. Percentage deducted from card sales

Some arrangements collect a pre-agreed percentage of card sales automatically.

For example, 365 Finance currently explains that its revenue-based finance product uses an agreed percentage of credit and debit card sales, with deductions taking place automatically as transactions are processed.

The percentage used by an individual finance provider is specific to that provider and offer and should not be treated as an industry-wide rate.

View 365 Finance's current explanation of its repayment model.

2. Settlement rerouting

Another model involves changing where the processor sends the merchant's settlement.

Instead of the payment processor sending the entire settlement directly to the merchant's normal bank account, funds can first be routed through a settlement account used within the finance arrangement.

The agreed percentage is retained and the remaining proceeds are then forwarded to the merchant.

YouLend, for example, documents a payment-routing model where merchant payouts from a processor are sent to a dedicated virtual account. YouLend retains the agreed repayment percentage and forwards the remaining funds to the merchant.

View YouLend's current payment rerouting documentation.

3. Embedded finance through a payment or software platform

Merchant finance can also be embedded directly into another platform.

A merchant may be offered funding through:

• a payment service provider
• an ecommerce platform
• EPOS software
• a marketplace
• another business platform.

The platform already has access to information about the merchant's transactions or sales and can use payment data within the funding journey.

The merchant may therefore experience the funding and payment service as part of one integrated product.

This is one reason the relationship between payments, sales data and business finance is becoming increasingly important.

What is split settlement?

Split settlement in a merchant cash advance context generally refers to a payment flow where part of the merchant's eligible sales proceeds is allocated towards the advance and the remainder is paid to the merchant.

A simplified example could look like this:

Customer payment: £100

Agreed MCA collection: 15% = £15

Remaining merchant proceeds: £85

This is a simplified illustration and does not include normal card-processing fees or other deductions that may also apply.

The actual payment flow depends on the provider.

Importantly, the finance company does not necessarily need to be your card acquirer in order for a repayment mechanism to operate.

Settlement can potentially be routed between different organisations within the payment chain.

Does your MCA provider need to work directly with your card processor?

Not always.

Some providers have established integrations or commercial arrangements with payment processors.

Others can operate repayment structures across a wider range of processors.

For example, 365 Finance currently states that its card-sales funding can operate with a number of processing providers including Lloyds Cardnet, Elavon, Worldpay, Global Payments, Barclaycard and Stripe.

View 365 Finance's current card-processor information.

YouLend's technical documentation also describes rerouting as its standard approach across payment-processing partnerships and says the model can also be used for acquiring relationships where there is no direct partnership.

View YouLend's current rerouting documentation.

This illustrates why merchants should not assume that a merchant cash advance automatically requires moving card processing.

The correct position depends on:

• your current processor
• the finance provider
• the repayment mechanism
• where your settlement currently goes
• your Merchant IDs
• your payment channels.

What should you check before changing processor for an MCA?

If a finance provider says a processor change is necessary, understand why.

Ask:

• Is my existing processor genuinely incompatible with the repayment method?
• Can my current settlement destination simply be changed?
• Does the finance provider already support my existing processor?
• Is the new processor part of the finance company's preferred commercial arrangement?
• Will changing processor affect my card-processing rates?
• Will I enter a new processing contract?
• Will my gateway or payment integration also need to change?
• Will I receive a new Merchant ID?
• What happens when the advance has been fully collected?

A £30,000 merchant cash advance should not be assessed separately from the payment-processing arrangement if accepting it also commits the business to a new acquiring or processing contract.

Does changing processor change the real cost of the MCA?

It can.

The funding cost and the payment-processing cost are technically different things, but they can become commercially connected.

Suppose a merchant currently processes £100,000 per month and receives an MCA offer that requires changing to another processor.

The merchant should compare:

• the amount of funding received
• the total amount to be collected under the MCA
• the collection percentage
• existing card-processing costs
• new card-processing costs
• gateway charges
• terminal costs
• contract length
• any switching or implementation costs.

A finance offer can appear attractive while a more expensive payment-processing arrangement creates an additional long-term cost.

Equally, changing processor may make commercial sense independently of the funding if the new overall payment arrangement is better suited to the business.

The two decisions should be assessed together rather than assuming either outcome.

Example: the MCA works with your existing processor

Imagine a restaurant currently processes £50,000 per month in card payments.

It is offered a merchant cash advance and the finance provider confirms its collection mechanism is compatible with the existing processor.

The merchant may only need to authorise the required settlement or repayment arrangement.

Its:

• terminals can potentially remain unchanged
• acquirer can potentially remain unchanged
• Merchant ID can potentially remain unchanged
• EPOS integration can potentially remain unchanged.

This is significantly simpler than migrating the entire payment setup.

Whether this structure is available depends on the particular providers involved.

Example: the MCA requires a different payment arrangement

Now consider a merchant where the proposed finance provider cannot collect the agreed percentage through the existing payment setup.

The options might include:

• changing where settlement is routed
• using another compatible repayment mechanism
• moving the relevant card processing
• choosing a different finance provider.

This is where merchants should avoid rushing the decision simply because funding is available quickly.

If changing the payment provider also requires replacing:

• card terminals
• gateway
• EPOS integration
• checkout
• stored payment credentials

the operational impact can be considerably larger than the finance application itself.

Find Your New Processor

What happens if you want to switch payment processor while an MCA is outstanding?

Do not simply move your card processing without checking the finance agreement first.

If MCA collections depend on sales being routed through a particular processor, Merchant ID or settlement arrangement, moving those sales elsewhere could interfere with the agreed repayment mechanism.

Before changing processor:

1. Review your finance agreement.
2. Tell the finance provider that you are considering changing processor.
3. Ask whether the repayment structure can move to the new provider.
4. Confirm whether settlement instructions need to change.
5. Establish whether any consent or documentation is required.
6. Do not switch the old facility off until the new payment and repayment routes have been tested.

A processor migration and MCA repayment migration should be treated as part of the same project where the two are connected.

Could changing payment processor breach an MCA agreement?

Potentially, depending on the agreement.

This should not be assumed either way.

Some finance structures rely on a defined settlement mechanism being maintained while money remains outstanding.

For example, YouLend's current UK payment-account terms state that its settlement account is used for receiving money from sales or card processors for the purpose of repaying financing. Its terms also state that closing that account before the outstanding financing has been repaid may trigger consequences under the financing contract.

View YouLend's current UK Payment Account Terms and Conditions.

This is one provider-specific example rather than a rule applying to every MCA.

The important lesson is to check the actual agreement before altering the payment route used to collect repayments.

What if your card processor terminates your merchant account while an MCA is outstanding?

This creates a different problem because the processor change may not be voluntary.

If your merchant account is suspended or terminated while an MCA remains outstanding, contact the finance provider promptly.

The business may need to establish:

• whether repayments can continue through another processor
• whether settlement can be rerouted
• whether the replacement acquirer needs to support a specific arrangement
• what information the finance provider requires
• whether the finance agreement contains provisions dealing with disruption to payment processing.

Do not assume that obtaining a new merchant account automatically solves the MCA repayment issue.

The new acquiring arrangement and existing finance arrangement need to work together.

For businesses that have lost their existing facility, read our guide to terminated merchant facilities.

Do you need to tell a new payment provider about an existing MCA?

Merchants should answer underwriting and application questions accurately and provide requested information about existing finance, settlement arrangements and payment obligations.

An existing MCA can be relevant where it affects:

• where settlement must be paid
• how much of the merchant's revenue is available after deductions
• cash flow
• existing contractual obligations
• the proposed payment architecture.

If a new acquirer needs to route settlement through a particular account to maintain an existing MCA repayment arrangement, this should be established before the new Merchant ID goes live.

What if you use more than one payment processor?

This deserves particular attention.

A merchant might accept payments through:

• one provider in-store
• another provider online
• a marketplace
• a separate subscription platform
• several acquiring relationships.

The finance provider needs to understand which revenue forms part of the funding and repayment calculation.

For example, if an MCA was assessed using £100,000 of monthly card revenue but only £40,000 subsequently passes through the repayment route, collections may operate very differently from the original expectation.

Merchants should therefore establish:

• which Merchant IDs are included
• which processors are included
• whether ecommerce sales are included
• whether marketplace sales are included
• whether new sales channels must be added to the arrangement.

For more information about payment structures involving several Merchant IDs, read our Multi-Merchant Accounts guide.

What if you use Stripe or another online payment provider?

Merchant cash advances are not limited to businesses using traditional countertop card machines.

Current revenue-based funding products can use online and card-payment revenue when assessing and collecting finance.

The important questions for an ecommerce merchant remain the same:

• Which sales are included?
• How will repayment be calculated?
• How will the agreed percentage be collected?
• Does the provider support your existing payment platform?
• Will settlement need to be rerouted?
• What happens if you later change gateway or processor?

A business should not switch a well-integrated ecommerce payment setup purely because it assumes an MCA requires a traditional card-machine processor.

What happens to refunds and chargebacks?

Merchant cash advance calculations are generally linked to sales, but businesses also need to understand how their particular agreement treats:

• refunds
• chargebacks
• reversals
• negative settlement days
• processor reserves.

This is especially important for businesses with significant refund volumes or delayed fulfilment.

Ask the finance provider what figure is used when calculating the collection amount:

gross sales, net settlement, or another defined measure?

The answer should be clear in the finance and payment documentation.

Does a rolling reserve affect an MCA?

It can affect the merchant's cash-flow position because both arrangements can reduce the amount of each day's or week's processed revenue that becomes immediately available to the business.

For example, a merchant could potentially have:

• payment-processing fees deducted
• a rolling reserve retained by the acquirer
• an MCA collection deducted
• refunds or chargebacks deducted.

These are separate deductions but should be modelled together when assessing available cash flow.

A business should understand how much of every £100 processed is actually expected to reach its usable bank balance.

Should you take an MCA offered by your existing payment provider?

An embedded offer can be convenient because the provider or platform may already have access to payment data and an established method for collecting repayments.

That convenience does not remove the need to compare the finance itself.

Check:

• amount received
• total amount to be collected
• fixed fee or factor rate where applicable
• collection percentage
• estimated collection period
• early repayment position
• renewal terms
• personal guarantees or security where applicable
• what happens if you leave the payment provider.

A convenient embedded offer is not automatically the cheapest or most suitable source of business finance.

Should you switch payment provider to obtain an MCA?

Only after comparing the whole arrangement.

A processor change may be perfectly reasonable if:

• your existing provider cannot support the required repayment structure
• the new payment service is commercially competitive
• the migration is technically straightforward
• the overall payment service suits the business.

It deserves more scrutiny where:

• processing rates rise materially
• a long new payment contract is required
• terminals need replacing
• gateway migration is complicated
• stored payment credentials need moving
• the merchant has been told a switch is compulsory without a clear explanation.

The finance provider and payment provider should solve two different business requirements:

accessing appropriate finance

and:

accepting customer payments efficiently.

One should not unnecessarily compromise the other.

Find Your New Processor

Seven checks before accepting an MCA linked to your card sales

1. Confirm exactly how repayments will be collected.
2. Ask whether your current payment processor is compatible.
3. Check whether settlement needs to be rerouted.
4. Understand which MIDs and sales channels are included.
5. Calculate the finance cost and payment-processing cost separately.
6. Find out what happens if you change processor while money is outstanding.
7. Get any processor-switching or settlement requirements in writing before signing.

The payment question to ask before signing an MCA

Before accepting an offer, ask the provider:

“Can you show me exactly how money will move from each customer transaction through my payment processor, into the MCA repayment and finally into my business bank account?”

If the answer is not clear, ask for a payment-flow explanation.

For a card-taking business, the MCA should not be considered independently of:

customer payment → processor → acquirer → settlement → MCA collection → business cash flow.

Understanding that chain makes it much easier to compare offers and avoid discovering a payment restriction after the finance has already been accepted.

How Merchant Advice Service can help

Merchant Advice Service looks at merchant cash advances from both a business-funding and payments perspective.

This is particularly useful where a business needs to understand how an advance could interact with:

• its existing card processor
• merchant acquiring
• Merchant IDs
• payment gateways
• EPOS
• online payments
• settlement
• multiple payment providers
• processor switching.

MAS can help businesses understand their requirements and identify relevant merchant cash advance or payment partners where appropriate.

Our aim is not simply to find funding.

It is to help the business understand whether the funding arrangement and payment structure work together.

You can also view merchant cash advance options in the Merchant Advice Service Payments Directory®.

About Merchant Advice Service

Merchant Advice Service is a UK business-to-business payments information, comparison and provider-matching service.

Founded in 2016, MAS helps businesses understand their payment requirements and identify payment providers or specialist partners that may be relevant to the way they operate.

We provide information and support across areas including:

• merchant accounts
• payment gateways
• integrated payments
• higher-risk merchant accounts
• international acquiring
• multiple currencies
• specialist payment integrations
• more complex provider requirements.

Merchant Advice Service is not an acquiring bank or payment processor and does not make final underwriting decisions.

The MAS information, matching and introduction service is free to businesses. MAS may receive commission or a referral fee from some commercial partners where an introduction results in a completed product or account.

For full information about how our service operates, provider matching, independence and commercial relationships, read How Merchant Advice Service Works.

Find Your New Processor

Sources and market examples

This guide was reviewed and updated in August 2026 using current information published by merchant finance providers and the Financial Conduct Authority.

YouLend — Sales-Based Repayment and Payment Rerouting

YouLend publishes technical information describing sales-based repayment arrangements, including a rerouting model where processor settlement is paid into a merchant-specific virtual account before the agreed repayment percentage is retained and the remaining funds are forwarded to the merchant.

YouLend: Payment Rerouting

YouLend — UK Payment Account Terms

YouLend's UK terms explain the role of its settlement accounts in receiving funds from sales processors or card processors for the purpose of repaying merchant financing.

YouLend: Payment Account Terms and Conditions

365 Finance — Merchant Cash Advance

365 Finance publishes information about its revenue-based repayment model, where an agreed percentage of card sales is collected automatically until the relevant balance has been repaid.

365 Finance: Merchant Cash Advance

365 Finance — Payment Processor Compatibility

365 Finance currently publishes examples of payment processors it can support within its card-sales funding arrangements.

365 Finance: Card Machine Funding

Financial Conduct Authority — Unregulated Lenders

The FCA published a reminder in March 2026 explaining the distinction between firms registered with it solely for anti-money-laundering supervision as Annex 1 firms and businesses holding wider FCA authorisation.

FCA: Risks When Dealing With Unregulated Lenders

Editorial and commercial disclosure

Merchant Advice Service is an independent payments information, comparison and provider-matching service.

Merchant cash advance and revenue-based finance structures vary between providers. Repayment methods, payment-processor compatibility, settlement requirements, pricing and contractual obligations should be confirmed directly with the relevant provider.

YouLend and 365 Finance are referenced in this guide because their current publicly available information provides useful examples of different payment and repayment structures operating in the UK market.

Inclusion does not constitute a recommendation and should not be taken to mean Merchant Advice Service can introduce businesses to every organisation referenced.

MAS may receive commission or a referral fee from some commercial partners where a business chooses to proceed following an introduction. Commercial relationships do not determine which organisations may be referenced within our independent educational content.

Providers have not paid for inclusion in this article unless explicitly stated.

Merchant finance can have legal, tax, accounting and regulatory implications depending on the structure and borrower. Businesses should read the relevant finance and payment agreements and obtain professional advice where appropriate.