If your business takes payment by card, a merchant cash advance repays in step with your daily takings rather than in fixed monthly instalments. We help incorporated UK businesses compare options through Funding Options by Tide’s panel of partner lenders.
The short answer
A merchant cash advance is a form of business finance where a lender advances a lump sum and is repaid by taking an agreed percentage of your future debit and credit card sales. Repayments rise when takings are strong and fall when they are quieter, because they are tied to a share of each day’s card transactions.
It is designed for businesses with regular card sales — shops, restaurants, salons and similar — where income moves with the season and fixed repayments can be hard to plan around.
The lender advances a lump sum, then collects repayment automatically as a fixed percentage of your card takings, usually through your card terminal or payment processor. Because repayment is a share of sales rather than a set amount, the time it takes to repay varies with how your business trades.
The cost is normally expressed as a fixed fee or factor applied to the advance, rather than as an ongoing interest rate, so you know the total amount repayable at the outset. Any figures are indicative and set by the lender after their own checks.
A merchant cash advance can be convenient for businesses with variable, card-heavy income, but it is not right for everyone. Because you repay a share of takings, a strong month means you repay faster, which shortens the borrowing period.
It is worth comparing the total cost against other forms of finance, such as a revolving credit facility, before deciding. All costs, amounts and terms are indicative until a lender confirms them, and finance is subject to status, lender checks and formal approval.
All figures shown are indicative only, not a formal offer, and are subject to status, lender checks and formal approval. Actual rates, amounts and terms are set by the lender.
Representative example: for a business loan of £25,000 over 36 months at 8.9% APR (fixed), you would repay 36 monthly instalments of £794. Total amount repayable £28,584. An arrangement fee of £750 is payable and is reflected in the APR. Representative 8.9% APR.
Questions
Repayment is collected automatically as an agreed percentage of your future card takings, typically via your card terminal or payment processor. You repay more on strong trading days and less on quiet ones.
The amount available is generally linked to your recent monthly card turnover. The specific figure is indicative and set by the lender following their own assessment and formal approval.
The cost is usually expressed as a fixed fee or factor on the advance rather than an ongoing interest rate, so the total amount repayable is known at the outset. Any figures shown are indicative until confirmed by the lender.
The advance is provided by a lender, not by us and not by Funding Options by Tide. Funding Options by Tide is a credit broker who can compare options from their panel of partner lenders and, if suitable, introduce you to one, subject to status and formal approval.
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