Merchant Cash Advance – how it works
Merchant account cash advance is most simply explained as a facility which allows business owners to borrow funds quickly, secured against their monthly card payments turnover. The amount that can be borrowed depends on these processing volumes. The repayments of merchant cash advance loans are taken directly from credit and debit card volumes received at point of sale, be it via a card machine or ecommerce sales.
Merchant cash advance lenders
Merchant cash advance is ordinarily used for companies to borrow money quickly and can be utilised for any business associated reasons. Finding the best merchant cash advance will largely depend on each individual business and ensuring lenders criteria is met. Merchant cash advance companies here in the UK are just like any other mainstream lenders in the fact that lending criteria varies between providers. Therefore, its worthwhile checking your business meets borrowing criteria and affordability before applying. If you’re unsure, there are many UK based merchant cash advance Brokers to choose from.
SPEAK TO OUR EXPERTSMerchant cash advance rates
Unlike standard business loans, merchant cash advance costs can vary. The reason for this is that cash advance loan repayments are taken at a percentage rate of monthly card turnover – therefore if your company has a busier month, larger repayments are made therefore the loan is repaid quicker at a lower overall cost to the business (bear in mind this also works the other way around, meaning quieter months equal smaller repayments). As a result, this means that the overall cost of merchant cash advance lending can be estimated at the beginning of the loan agreement, based on transaction history – but accuracy can vary.
How to consolidate merchant cash advance loans
The popularity of merchant cash advance business loans amongst users, means that companies can often end up with additional borrowing from more than one lender. As a result, businesses may wish to consolidate their merchant cash advances. Reasons for doing so can include;
- Cost saving
- Easier repayment management
- Preferable repayment terms
- Change in affordability/circumstances
It’s also worth bearing in mind any other changes to the business such as switching merchant account providers or adding additional third-party streams of card payments revenue such as AirBnB, Deliveroo, etc.
GET IN TOUCHMerchant cash advance providers UK
Some UK based cash advance lenders will consider applications for companies wishing to consolidate previously agreed cash advance loans. This, as always, is subject to both affordability and meeting lender criteria. It’s worthwhile considering all the costs involved in consolidation, for example you may reduce the rates of repayment but incur early repayment charges or broker fees to process the new application elsewhere.
SPEAK TO OUR UK BASED BROKERSMerchant cash advance for small businesses
Smaller businesses sometimes question how much they can borrow using merchant cash advance loans, and there are loads of online merchant cash advance calculators to help understand a rough guide. However, when it comes to consolidating merchant cash advances, some lenders will only lend a certain percentage for this reason which can be as little as 50%. For example, if you had £10 000 outstanding with an existing lender/s and wanted to switch merchant cash advance providers to consolidate, subject to affordability you could borrow £20 000 (50% for repayment of existing loan/loans and 50% for other business reasons such as cashflow, renovations, purchase of equipment etc.)
ENQUIRE TODAYMerchant cash advance UK
Finding the most suitable merchant cash advance loan for your requirements can be tricky, which is why Merchant Advice Service have teamed up with industry experts to help you navigate the world of cash merchant advance, helping you make informed decisions when it comes to borrowing. Be it a specific lender, or if you prefer to use a broker, we’ve got you covered. And while you’re at it, why not think about saving costs on your card processing – we’re pretty good at that!
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