Can Restaurants and Pubs Get a Merchant Cash Advance?
Yes. Restaurants, pubs, cafés and other hospitality businesses can be well suited to merchant cash advance funding because a significant proportion of their revenue is often collected by card.
A merchant cash advance provides the business with an upfront amount of funding. Instead of a conventional fixed monthly loan repayment, an agreed proportion of eligible future sales is collected until the contractual amount has been repaid.
Hospitality businesses may consider an MCA for:
- restaurant or pub refurbishment;
- kitchen equipment;
- furniture and fittings;
- stock and ingredients;
- outdoor seating;
- EPOS and payment technology;
- opening another location;
- marketing;
- working capital; or
- managing seasonal cash-flow requirements.
However, an MCA should not automatically be considered the best form of hospitality finance simply because a venue accepts cards.
The business should compare the total finance cost, the percentage of sales being collected, hospitality margins, existing finance and any changes required to the payment-processing setup.
Hospitality businesses can have seasonal and fluctuating cash flow, making the structure of business funding particularly important. Our main Merchant Finance guide explains merchant-finance options, costs, eligibility and the relationship between funding and payment processing.
MAS View: Hospitality is naturally suited to sales-linked finance because card revenue is frequent and visible. But the same characteristic that makes an MCA accessible can also make its cost easy to overlook. Restaurants should assess the advance alongside the economics of every card sale from which the collection will be taken.
How Does a Merchant Cash Advance Work for a Restaurant?
The basic structure is straightforward.
A restaurant receives an agreed cash advance and repays an agreed total amount from future eligible sales.
For example:
- cash advance received: £40,000;
- agreed total collection: £48,000;
- agreed sales collection: 12%;
- eligible card sales in a busy month: £100,000;
- illustrative collection that month: £12,000.
If eligible sales fall to £60,000 in a quieter month, the same 12% structure would produce an illustrative collection of £7,200.
This is one of the key distinctions between an MCA and finance with a fixed monthly repayment.
The collection can move with the level of eligible sales.
However, businesses should remember that:
- the total amount to be collected still matters;
- higher sales can mean the balance is collected more quickly;
- the MCA deduction reduces the cash available from each eligible sale; and
- the exact structure varies between providers.
Read our main Merchant Cash Advance UK guide for a full explanation of how MCA funding works.
Which Hospitality Businesses Can Use Merchant Cash Advance?
Depending on the individual provider's criteria, MCA funding may potentially be available to:
- restaurants;
- pubs;
- bars;
- cafés;
- coffee shops;
- takeaways;
- food halls;
- casual dining businesses;
- fine dining restaurants;
- hotel restaurants and bars;
- leisure venues;
- event venues; and
- multi-site hospitality groups.
Eligibility is not determined by the word “hospitality” alone.
Providers can assess each venue according to its trading profile, sales, cash flow, sector, payment setup and existing financial commitments.
The MAS Hospitality MCA Framework
Merchant Advice Service recommends assessing hospitality MCA funding using:
Funding Purpose → Card Sales → Seasonality → Margin → Existing Finance → Payment Setup → Cost → Provider Fit
| Area | What to assess |
|---|
| Funding Purpose |
What does the restaurant actually need the money for? |
| Card Sales |
How much eligible card revenue does the venue consistently generate? |
| Seasonality |
How different are peak and quiet trading periods? |
| Margin |
How much cash remains after food, labour, VAT and operating costs? |
| Existing Finance |
What other borrowing or repayment commitments already exist? |
| Payment Setup |
Which processor, EPOS and Merchant IDs generate the eligible sales? |
| Cost |
What is the total contractual collection and effect on cash flow? |
| Provider Fit |
Which providers support the venue's profile and current payment arrangement? |
Why Are Restaurants Particularly Relevant for MCA Funding?
Restaurants often have characteristics that fit the MCA model:
- regular card transactions;
- frequent settlement from payment processors;
- visible historical sales data;
- predictable trading patterns once established;
- significant short-term capital requirements; and
- revenue that can fluctuate throughout the year.
The British Business Bank specifically lists hospitality businesses including restaurants, cafés and hotels among businesses that could potentially benefit from MCA funding. It gives examples including ingredients, kitchen appliances, tables and chairs and renovations.
That does not mean every restaurant will qualify or that an MCA is always the most appropriate finance.
How Much Card Turnover Does a Restaurant Need?
There is no single minimum card turnover that applies across the entire UK merchant cash advance market.
Providers set their own eligibility criteria.
They may consider:
- average monthly card turnover;
- total business turnover;
- recent sales history;
- number of months or years trading;
- seasonal variations;
- average transaction value;
- refunds and chargebacks;
- existing finance;
- business bank account conduct;
- current payment provider; and
- the funding amount requested.
A government-listed MCA support scheme, for example, describes eligibility based partly on minimum monthly card sales, illustrating how sales volume can form part of provider criteria. This should not be treated as a universal MCA threshold because other providers can set different requirements.
Does Seasonality Make MCA Suitable for Restaurants and Pubs?
It can be one reason businesses consider it.
Hospitality revenue often moves according to:
- Christmas;
- summer trading;
- school holidays;
- tourism;
- sporting events;
- local events;
- weather;
- weekday versus weekend trading; and
- January or other traditionally quieter periods.
Where collections are genuinely calculated as a percentage of eligible sales, the cash amount collected can reduce as those sales fall.
That can create greater flexibility than a fixed monthly repayment.
But businesses should not confuse variable collection with low cost.
The restaurant still needs to understand the agreed total repayment and what proportion of daily sales will no longer reach its usable cash flow.
MAS View: For hospitality, the question is not simply whether repayments fall in quieter months. It is whether the business still retains enough cash from those quieter sales to cover wages, stock, rent, VAT and other essential costs.
Why Restaurant Margins Matter
Card turnover can look impressive while usable operating cash is much smaller.
A restaurant may need to meet:
- food and drink costs;
- staff wages;
- National Insurance and employment costs;
- rent;
- business rates;
- utilities;
- VAT;
- insurance;
- delivery-platform charges;
- card-processing fees;
- EPOS costs;
- existing finance; and
- maintenance and repairs.
An MCA provider may be comfortable funding against the sales level while the restaurant itself still needs to determine whether the proposed collection is sustainable at its actual margin.
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What Can a Restaurant Use a Merchant Cash Advance For?
Restaurant Refurbishment
A refurbishment can involve:
- decorating;
- flooring;
- lighting;
- tables and seating;
- bar upgrades;
- outside areas;
- signage; and
- customer facilities.
An MCA may be considered where the project is expected to improve an already trading venue and the business has sufficient existing sales.
Kitchen Equipment
Restaurants may need to replace or upgrade:
- ovens;
- refrigeration;
- dishwashers;
- extraction;
- coffee equipment;
- food preparation equipment; or
- other commercial kitchen assets.
However, for substantial identifiable equipment, businesses should also compare asset finance. Financing the asset itself may sometimes be more suitable or less expensive than using short-term working-capital finance.
Stock and Working Capital
A venue may require additional cash before:
- Christmas;
- summer;
- major events;
- a new menu launch;
- opening an outdoor area; or
- another expected peak trading period.
The important question is whether the expected trading period supports the total cost of the funding.
Opening Another Restaurant
An established operator may consider using funding generated against an existing site's sales to support expansion.
This requires particularly careful analysis.
The existing venue may effectively be supporting the funding while the new location is still:
- being fitted out;
- recruiting;
- building local awareness; and
- establishing its own revenue.
The existing business therefore needs sufficient headroom if the second venue takes longer than expected to become profitable.
Can Pubs and Bars Get Merchant Cash Advance Funding?
Potentially, yes.
Pubs and bars can have many of the same characteristics as restaurants:
- high proportions of card sales;
- frequent transactions;
- established payment history;
- seasonality; and
- regular requirements for refurbishment, equipment and working capital.
Providers may still look carefully at:
- length of trading;
- ownership or tenancy structure;
- recent sales;
- existing borrowing;
- business bank activity;
- processor setup; and
- the individual venue's financial position.
Can Cafés and Coffee Shops Get an MCA?
Potentially.
Cafés often process large numbers of relatively low-value card and contactless transactions.
That can provide a substantial amount of payment data from which a provider can assess trading activity.
Possible funding uses include:
- coffee machines;
- refrigeration;
- furniture;
- refurbishment;
- outdoor seating;
- stock;
- opening another site; or
- working capital.
Can Takeaways Get Merchant Cash Advance Funding?
Potentially, although the revenue structure can be more complicated.
A takeaway may receive payments through a combination of:
- its own card terminals;
- its own website;
- telephone orders;
- delivery platforms;
- online ordering systems; and
- cash.
Businesses should establish which sales the MCA provider recognises as eligible revenue and which sales can actually support the collection arrangement.
A venue taking £100,000 overall is not necessarily presenting £100,000 of eligible MCA sales if a significant proportion is collected through third-party channels outside the provider's supported payment flow.
How Do Delivery Platforms Affect Restaurant MCA Eligibility?
This depends on the MCA provider and how the restaurant receives the revenue.
A hospitality business may receive income through:
Customer → Delivery Platform → Restaurant Bank Account
rather than:
Customer → Restaurant Payment Provider → Restaurant Settlement
Those are different payment flows.
A provider should therefore clarify whether marketplace or delivery-platform revenue is included when assessing the business and whether it forms part of the agreed sales-linked collection.
This can materially affect the amount of genuine eligible turnover available.
Restaurants using delivery platforms may also be offered funding directly through services such as Uber Eats or Deliveroo. Before accepting a platform offer, consider how much of the restaurant’s total revenue comes from that channel and how the collection will affect future payouts. See our guide to Uber Eats, Deliveroo and other platform funding.
Why the Restaurant's Card Processor Matters
This is a particularly important area for hospitality businesses.
Restaurants often have integrated setups connecting:
EPOS → Card Machine → Payment Processor → Merchant Account → Settlement
The MCA arrangement may also need to interact with that payment flow.
Some providers can work alongside the restaurant's existing processor.
Others may require:
- a supported processor;
- a particular settlement arrangement;
- access to card-sales data;
- changes to Merchant IDs; or
- another payment-related integration.
This needs to be understood before accepting the finance offer.
Should a Restaurant Change Payment Processor to Get an MCA?
Not automatically.
Changing card processor can affect:
- transaction rates;
- terminal contracts;
- EPOS integration;
- Pay at Table;
- tipping;
- refunds;
- settlement;
- reporting;
- hardware; and
- staff workflows.
A venue processing significant annual card volume should calculate the payment impact alongside the finance.
For example, if a restaurant processes £2 million annually in card payments, even a relatively small increase in processing cost may become commercially significant over the life of the payment contract.
MAS View: A restaurant should not save time obtaining finance only to accidentally lock itself into a more expensive or less suitable payment arrangement.
Read our guide to Merchant Cash Advance and Your Payment Processor.
What About Integrated EPOS and Card Machines?
Hospitality businesses need to be particularly careful where the payment terminal is integrated into the EPOS.
A new processor may need to support functions such as:
- Pay at Table;
- automatic bill transfer;
- tips;
- split bills;
- refunds;
- pre-authorisation where relevant;
- multi-terminal operation;
- multi-site reporting; and
- reconciliation.
Before changing the payment arrangement, read our guide to Integrated Card Machines & EPOS Compatibility.
Our wider guide to integrated payment solutions explains how payment technology can connect with EPOS and other business systems.
What Happens if the Restaurant Has Several Locations?
A multi-site hospitality group requires a more detailed assessment.
The business may have:
- different Merchant IDs for each venue;
- different legal entities;
- centralised or site-level settlement;
- different card processors;
- franchise locations;
- separate EPOS setups; or
- different trading histories between sites.
An MCA provider needs to establish which sales belong to the borrowing business and how those eligible revenues can support the funding.
The merchant should also understand whether collections are made:
- across the entire group;
- from one venue;
- from selected Merchant IDs; or
- through another agreed mechanism.
Can a Restaurant With Bad Credit Get an MCA?
Potentially.
Poor credit does not automatically determine MCA eligibility because providers may also assess current trading and card-sales performance.
However, providers may still consider:
- CCJs;
- defaults;
- director credit where relevant;
- existing finance;
- bank account conduct; and
- other evidence of financial pressure.
We cover this separately in Merchant Cash Advance With Bad Credit.
What if the Restaurant Has Already Been Declined?
A decline does not necessarily mean every MCA provider will reject the venue.
The reason might be:
- turnover;
- trading history;
- existing finance;
- sector appetite;
- credit;
- the amount requested; or
- payment-processor compatibility.
Before applying again, establish the likely cause.
Read Merchant Cash Advance Declined: Why Applications Fail & What to Do Next.
How Much Does a Restaurant Merchant Cash Advance Cost?
There is no universal restaurant MCA price.
Businesses should compare offers using:
Advance Received → Total Contractual Collection → Collection Percentage → Estimated Duration → Other Costs → Cash-Flow Impact
For example, receiving £40,000 does not tell the business whether an offer is competitive.
The restaurant needs to know:
- the total amount to be collected;
- the percentage deducted from eligible sales;
- any additional fees;
- early settlement terms;
- whether the processor must change;
- the cost of any new payment agreement; and
- how the collection affects cash flow during quieter trading.
Read our dedicated guide to Merchant Cash Advance Costs, Factor Rates and Repayments.
Restaurant MCA Example: Refurbishment
Consider an established restaurant that:
- processes £90,000 per month;
- takes £75,000 of that through eligible card payments;
- requires £30,000 for a refurbishment;
- has traded for six years;
- has a clear seasonal trading pattern; and
- already has an integrated EPOS and payment terminal setup.
A provider may consider:
- recent card statements;
- historic sales;
- quiet-month performance;
- existing finance;
- bank statements;
- the payment processor;
- the amount requested; and
- the proposed collection percentage.
The restaurant should then conduct its own assessment.
If a 12% collection applies to £75,000 of monthly eligible sales, that represents £9,000 of that month's gross card revenue being allocated to the MCA.
The important question becomes:
Can the restaurant comfortably operate after that deduction, particularly in a quieter month?
MCA vs Business Loan for a Restaurant
| Merchant Cash Advance | Business Loan |
|---|
| Collections can move with eligible sales |
Usually uses agreed scheduled repayments |
| Card sales can play a major role in eligibility |
Traditional credit and affordability criteria may have greater weight |
| Can suit shorter-term working-capital needs |
Can suit longer-term investment |
| Can be comparatively expensive |
May offer a lower cost for suitable borrowers |
| May interact with payment processing |
Normally separate from card processing |
The British Business Bank notes that MCAs are generally more suited to short-term cash-flow requirements and suggests businesses consider alternatives for more cost-effective or longer-term funding.
Read our full comparison of Merchant Cash Advance vs Business Loan vs Revenue-Based Finance.
When Might an MCA Not Be Right for a Hospitality Business?
An MCA may be less appropriate where:
- most revenue is not generated through eligible payment channels;
- sales are currently falling significantly;
- the business already has heavy finance commitments;
- the collection would create unacceptable pressure on working capital;
- a lower-cost finance product is readily available;
- the project requires long-term rather than short-term finance;
- asset finance would be better for equipment;
- the venue would have to make an expensive processor change purely to obtain funding; or
- the underlying issue is persistent trading losses rather than temporary working-capital need.
Questions Restaurants Should Ask Before Accepting an MCA
- How much cash will we actually receive?
- What is the total contractual amount to be collected?
- What percentage of eligible sales will be taken?
- Which sales count as eligible?
- What happens in a quieter month?
- How is delivery-platform revenue treated?
- Can the provider work with our existing card processor?
- Will we need to change terminals or EPOS integration?
- Are there other fees?
- What happens if we want to settle early?
- How does existing finance affect the arrangement?
- How much working capital remains after the collection?
- Would another type of finance be cheaper?
MAS View: Restaurants should compare merchant cash advance at two levels: the cost of the finance and the effect on the payment operation. An attractive funding offer can become less attractive if it introduces more expensive card processing or disrupts an integrated EPOS setup.
Should You Use a Broker or Approach an MCA Provider Directly?
Either route can work.
Going direct may make sense where the restaurant already knows which provider it wants and understands its eligibility and payment requirements.
A broker or matching service may be useful where:
- several offers need comparing;
- the restaurant has previously been declined;
- there is adverse credit;
- the business operates multiple sites;
- there is a complex payment-processing setup;
- the merchant does not want to change card processor unnecessarily; or
- it is unclear which providers support the venue.
Read Merchant Cash Advance Broker vs Direct Provider.
How Merchant Advice Service Can Help Hospitality Businesses
Merchant Advice Service approaches merchant cash advance from both the finance and payments sides of the business.
For restaurants, pubs, cafés and hospitality groups, this can include reviewing:
- funding requirement;
- card turnover;
- seasonality;
- existing finance;
- MCA provider criteria;
- current card processor;
- EPOS integration;
- Merchant IDs;
- multi-site requirements;
- payment-processing costs; and
- whether a processor change would be commercially sensible.
Our framework is:
Funding Need → Hospitality Sales → Provider Fit → Processor Fit → Total Cost → Operational Impact
Merchant Advice Service does not provide the underlying merchant cash advance and does not make underwriting decisions.
Our matching and introduction service is free to businesses. MAS may receive commission or a referral fee from a commercial partner where a business proceeds following an introduction.
You can also browse Merchant Cash Advance Providers within The Payments Directory®.
Learn more about how Merchant Advice Service works.
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Related Guidance
Sources & Further Reading
Editorial & Commercial Disclosure
This guide provides general information about merchant cash advances for restaurants, pubs and hospitality businesses.
Merchant cash advance providers use different eligibility, sales and payment-processing criteria. Examples in this article are illustrative and should not be treated as a quotation or indication that a particular business will qualify.
Merchant Advice Service does not provide the underlying finance and does not make final underwriting decisions.
MAS may receive commission or a referral fee from some commercial partners where a business proceeds following an introduction. Our matching and introduction service is free to businesses.
The most appropriate finance depends on the business, intended use, costs, cash flow and alternative options available. Commercial finance does not necessarily carry the same regulatory protections as consumer borrowing.
This guide is general information and should not be treated as legal, accounting, tax or regulated financial advice.
Read more about how Merchant Advice Service researches and compares providers and our research and data methodology.
