Funding questions, answered straight
No jargon. No waffle. Everything you need to know before you apply, explained in plain English.
Check your optionsGeneral Questions
What is the fastest way to get business funding in the UK?
Merchant Cash Advance (MCA) is typically fastest. We aim to get back to you within 24 hours, with funds typically in 2-3 days. Invoice financing can be faster (24-48 hours) if you have unpaid B2B invoices. Traditional bank loans take 6-8 weeks.
How much can my business borrow?
Depends on the funding type. MCAs: £5K-£1M (typically 1-2× monthly card sales). Business loans: £10K-£1M+ (based on credit and financials). Revenue-based finance: £10K-£1M (1-2× monthly revenue). Your specific amount depends on your business performance and chosen funding type.
What's the difference between a loan and merchant cash advance?
A loan has fixed monthly payments, requires good credit, and charges interest (APR). An MCA is repaid from a percentage of daily card sales (flexible), has lower credit requirements, and uses a factor rate instead of APR. MCAs are faster but more expensive.
Do I need perfect credit to get business funding?
No. While traditional banks want 680+ credit scores, alternative lenders (MCAs, revenue-based finance) focus on your business performance. Many businesses with credit scores below 600 get approved. Your card sales matter more than your credit score for MCAs.
Merchant Cash Advance Questions
How does MCA repayment work?
A fixed percentage (typically 10-20%) is automatically deducted from your daily card sales. Busy Saturday with £3,000 in cards? You repay £450 (at 15%). Quiet Monday with £800 in cards? You repay £120. The percentage stays the same, but the amount flexes with your revenue.
What is a factor rate?
A multiplier that determines your total repayment. Example: £20,000 advance × 1.35 factor rate = £27,000 total to repay. Your cost is £7,000. This total never changes regardless of how long repayment takes - no interest charges.
Can I repay my MCA early?
Most UK MCA providers allow early repayment without penalties. Some even offer small discounts for early settlement. Always check your specific agreement, but early repayment is typically encouraged.
What if I have a slow month?
Repayments automatically adjust down. If your card sales drop 50%, your MCA repayment drops 50% that month. This is the key benefit - protection during slow periods.
Do I need to switch card processors to get an MCA?
No. Reputable MCA providers work with your existing card processor. They simply receive data on your daily card volume to calculate the withholding. You don't change processors or interrupt your business.
Eligibility & Approval
What are the minimum requirements for business funding?
For MCAs: £5,000+ monthly card sales, 6+ months trading. For business loans: 12-24+ months trading, credit score 620+, profitable or path to profit. For overdrafts: 24+ months trading, 680+ credit score, strong banking relationship.
Can startups get funding?
Yes, but options are limited. Best for startups: Start Up Loans (government, 6% APR, £500-£25K), personal savings, friends & family, crowdfunding, or angel investors. MCAs and traditional loans typically need 6-12 months trading history.
Can I get funded with CCJs or defaults?
Yes. MCAs and revenue-based financing focus on current business performance, not credit history. Many businesses with CCJs or defaults can still qualify. Trading history matters more than credit score. Be honest about credit issues and explain them.
What documents do I need to apply?
Standard requirements: Business bank statements (3-6 months), card processing statements (3-6 months for MCAs), director ID (passport/license), proof of business address, company registration details. Some lenders may request additional documentation depending on amount.
Costs & Fees
How much does business funding cost?
Varies widely. Bank loans: 5-12% APR (cheapest). Alternative lenders: 12-25% APR. MCAs: 1.3-1.6 factor rate (~30-50% APR equivalent). Start Up Loans: 6% APR. Grants: FREE. Equity: 10-30% ownership (no cash cost but you give up shares).
Are there any upfront fees?
Reputable lenders charge no upfront fees. Beware any lender asking for payment before providing funding - likely a scam. Some brokers charge fees (should be disclosed). Legitimate fees come from your funding amount, not upfront.
What's cheaper - MCA or business loan?
Business loans are cheaper (5-15% APR vs MCA's 30-50% effective APR). But MCAs are faster (typically days vs weeks), trading history matters more than credit score, and payments adjust with revenue. You pay more for speed and accessibility.
Can I negotiate the rates?
Sometimes. MCAs have some wiggle room - if you have strong card sales, long trading history, or good credit, ask for better factor rate. Traditional loans have less flexibility. Comparing multiple offers gives you leverage to negotiate.
Repayment & Terms
How long does it take to repay business funding?
MCAs: 6-18 months. Business loans: 1-7 years. Overdrafts: flexible (pay when you can). Invoice finance: when customer pays (30-90 days). Revenue-based finance: 18-48 months. Choose term that matches your needs and cash flow.
What happens if I can't make a payment?
With MCAs: If card sales drop, payments automatically reduce - built-in protection. With traditional loans: Contact lender immediately, explain situation, request payment holiday or restructure. Never ignore missed payments - always communicate.
Can I have multiple funding arrangements at once?
Yes, but be careful. Having 1-2 is manageable. Three or more can strain cash flow. Maximum safe: 25-30% of daily revenue going to debt repayments. Beyond that, you risk cash flow problems.
What if my business closes before repayment is complete?
Most MCA and business loan providers require a personal guarantee, so directors can be personally liable for the outstanding amount. The guarantee is typically not asset-based, meaning your property isn't directly at risk, but you should always read the terms carefully before signing.
Industry-Specific Questions
Can restaurants get business funding?
Yes - restaurants are ideal for MCAs. High card sales percentage (70-90%), predictable patterns, easy to assess. Typical amounts: £10K-£100K. Common uses: refurbishment, equipment, seasonal stock, staff costs. See our restaurant funding page for details.
Can seasonal businesses get funding?
Yes - MCAs are perfect for seasonal businesses. Repayments adjust with your revenue - pay more during peak season, less during quiet months. Example: Garden centre pays £7,500/month in spring (busy), £1,200/month in winter (quiet).
Can online/e-commerce businesses get MCAs?
Yes, if you process cards online. Payment processors like Stripe, PayPal work with MCAs. Some e-commerce businesses also qualify for specialized revenue-based finance from providers like Clearco who focus on online retail.
What if my business is mostly cash sales?
MCAs won't work (need 40%+ card sales minimum). Better options: Revenue-based financing (looks at total revenue), traditional business loan, invoice financing (if B2B), or asset finance. We can help you find the right option.
Application Process
How long does the application take?
Application form: 3-10 minutes. Document upload: 5-10 minutes. Total time investment: 10-20 minutes. Assessment time varies: MCAs (24 hours), alternative lenders (3-5 days), banks (2-4 weeks).
Will applying affect my credit score?
Soft credit checks don't affect your score. Hard credit checks reduce score by 5-10 points. Use brokers (like CapExpand) who do ONE soft check, then present multiple options - avoids multiple hard searches damaging your credit.
What happens after I apply?
Typical process: (1) You apply online, (2) Provider reviews within 24-48 hours, (3) They may call to verify details, (4) You receive offer with terms, (5) Review and ask questions, (6) Accept and e-sign, (7) Funds arrive 1-3 days later.
Can I cancel my application?
Yes, anytime before you sign the agreement. Applying creates no obligation. You can review offers, ask questions, and walk away if terms don't suit you. Only committed once you sign final agreement.
Alternatives & Comparisons
Should I use personal money or get business funding?
Pros of personal money: Free, no approval needed, full control. Cons: Risk personal savings, limited amount, no tax benefits. Pros of business funding: Preserves personal savings, tax deductible, builds business credit. Generally: Use personal for small amounts (under £5K), business funding for larger needs.
What about government grants - are they better?
Grants are FREE money, so yes, always check grants first. BUT: Highly competitive (20-30% funded), lengthy process (3-6 months), specific criteria, usage restrictions. Apply for grants while also pursuing paid funding routes.
Should I use equity (investors) or debt (loans/MCA)?
Debt (loans/MCA): You keep full ownership, repay fixed amount, obligation ends when repaid. Equity: Give up 10-40% ownership forever, no repayments, investor adds value/expertise. Use debt for predictable needs, equity for high-growth startups needing expertise + capital.
Can I get a business loan from my personal bank?
Maybe. Ask your bank first - existing customers sometimes get better rates. But banks decline many small business applications. If declined, alternative lenders and MCAs use different criteria and may be a better fit. Trading history matters more than credit score with most MCA providers.
Key funding terms explained
Factor Rate
A multiplier that determines total repayment. Example: £20,000 advance x 1.35 factor = £27,000 total. Your cost is £7,000. This never changes regardless of how long repayment takes.
Holdback Percentage
The percentage of your daily card sales withheld for repayment. Typically 10-20%. Busy day = higher payment, quiet day = lower payment.
Personal Guarantee
A promise that you'll personally repay if the company can't. Most MCA providers require one. The funding is typically unsecured, meaning no property collateral, but terms vary by lender.
Merchant Cash Advance (MCA)
Business funding repaid from a percentage of future card sales. Not technically a loan - you're selling future receivables. Fast approval, based on card volume not credit score.
Revenue-Based Finance
Similar to MCA but based on total revenue, not just card sales. You repay a percentage of monthly revenue until reaching a cap.
Soft Credit Check
A credit check that doesn't appear on your credit file or affect your score. Used for initial assessment. Hard checks only happen when you formally accept an offer.
Something not covered here?
Call us directly or fill in the form. Your account manager will answer any question you have - no sales pitch, just straight answers.
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