Innovative cash advance for repayments only when you get paid.
Short-term cash advance for SMEs without fixed payments, terms, or any security. Borrow from £5,000 to £200,000 and pay back the advances with a small percentage from your future credit/debit sales.
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What is Business Cash Advance?
Business Cash Advance, also known as Merchant Cash Advance allows SMEs to quickly and easily get funded up to £200,000. This funding option is different from traditional loans as no interest is levied on the borrowed sum; rather, a factor rate (explained below) is charged on the total amount.
One distinct feature of Business Cash Advance is that it enables businesses to pay back with the revenue they generate through their credit and debit card sales. Lenders charge a fixed, small percent factor rate on the revenue. The revenue that directs the repayment rates. You only repay from your earned income. There are absolutely no fixed interest rates or set monthly payments with the Merchant Cash Advance Facility.
It greatly reduces the financial stress on the borrower by keeping the repayment rates predictable and linear to growth. Payless when you earn less and more when you earn more. Win-Win situation for both borrowers and lenders.
A Merchant cash advance is a quick and flexible option to borrow funds for your business if you handle payments through a card machine (PDQ) and/or an internet payment system.
Key Benefits of Business Cash Advance
Business Cash Advance offers many advantages over traditional forms of credit loans. As the industry is still getting acquainted with it, its rising popularity ensures more borrowers and lenders in the cash fund pool.
Merchant Cash Advance offers many advantages over traditional forms of credit loans. As the industry is still getting acquainted with it, its rising popularity ensures more borrowers and lenders in the cash fund pool.
Minimal Default Risk
As no interest rates or fixed monthly repayments are involved in Merchant Cash Advance, the chances of defaulting on the payback are very less since repayments on agreed factor rates are done automatically on the earned revenue from credit/debit sales.
No interest rates at all. It solely relies on the factor rate for repayments. So be sure of no hidden service or charge whatsoever while borrowing from a lender using BCF.
Quick Cash Access
Lenders can quickly assess the sales history of the borrower through previous credit sales and release funds quickly. BCF sees the highest approval rates across many financial options.
Who is eligible for Business Cash Advance?
Following are the key requirements to access Business Cash Finance in the UK:
- Accept payments using credit and debit cards (i.e., have a Business account)
- UK trading business with a UK-based bank account.
- Monthly payment process of at least £2,500.
- LLPs (limited companies, limited liability partnerships) or registered sole UK-based traders.
- More than three months of active business operations.
Small and medium-sized businesses can apply for Merchant Cash Finance Benefits if they adhere to the above standards and certain lenders’ terms and conditions.
Frequently Asked Questions
The fee charged by the lender on Business Cash Advance is called the finance rate. Factor rates are different from interest rates. They are fixed rates per pound. Usually, factor rates range between 1.2 and 1.5. So, for example, a business borrowing £20,000 at a factor rate of 1.2 has to repay £24,000 in total.
Yes, they both mean the same thing, and the term can be used interchangeably.
Business Cash Advance caters to all types and sizes of industries in the UK. However, businesses whose large volume of transactions occurs through credit and debit cards are the most-fit industries for MCA. These industries may include restaurants, bars, online stores, hotels, auto repair, and many more such avenues.
A good credit score is a criterion for funding via Merchant Cash Advance. This is because it reduces the lenders' risk from the habitual defaulters. Some lenders, however, may allow you to borrow cash advance even with a bad credit score, but mostly at the cost of an increased factor rate.
Merchant Cash Advance does not require you to furnish any security or collateral to avail of its benefits. Instead, it is entirely dependent on your business's future sales and revenue (debit and credit sales).
These are our key finance options that are favorites among the borrowers.
- Unsecured Business Finance
- Property FInance
- Recovery Loan Scheme
- Revolving Credit Facility