Twelve questions to ask before signing a merchant cash advance
Every question on this list has one purpose: get the answer in writing before you sign, because afterwards the agreement is the answer. A funder or introducer comfortable answering all twelve is exactly the kind you want; hesitation on any of them tells you something too.
MCAs to limited companies are commercial agreements, generally outside FCA regulation, so the contract does the work consumer rules would otherwise do. The questions are grouped by what they protect.
The cost questions
- 1. What is the total repayment as one fixed number — advance, factor rate cost, and every fee included?
- 2. Are there any fees outside that number? Set-up, admin, direct debit, early settlement or completion fees all belong inside the total.
- 3. If I repay faster than expected, does the cost reduce? (For most MCAs the answer is no — the cost is fixed. You want that confirmed rather than assumed.)
- 4. What happens at renewal — does a top-up replace this agreement or sit alongside it, and what does the remaining balance look like at that point?
The repayment questions
- 5. What exact percentage of card takings is deducted, and is it daily or weekly?
- 6. What happens in a genuinely bad month — is there a minimum payment, and what counts as default?
- 7. Can the holdback percentage be reviewed if trading changes materially?
- 8. Am I required to keep using a particular card processor, and what happens if I switch?
The security and consent questions
- 9. Is a personal guarantee required, is it capped, and does it cover only this agreement?
- 10. Does the agreement restrict other borrowing against my card takings without your consent? (This is the clause that makes stacking a breach.)
- 11. Is anything registered at Companies House — a debenture or charge — as part of this agreement?
- 12. Who exactly am I contracting with, and who is the introducer being paid by? Both answers should survive a check on Companies House and, where relevant, the FCA register.
What the answers should look like
Written, specific, and boring. The total repayment is a single number. The holdback is a single percentage. The personal guarantee position is yes-or-no with a cap or without one. Answers that arrive as ranges, verbal assurances, or "that never really happens" are the ones to press on — and same-day signing pressure is a reason to slow down, not speed up. Our pages on factor rates and stacking cover the two questions that catch people most often.
Frequently asked questions
What is the most important question to ask before taking an MCA?
The total repayment as one fixed number, with every fee inside it. Every other cost question is a variation on that one, and a funder or introducer who cannot or will not put that number in writing before signature is telling you something important.
Should I ask an MCA provider about a personal guarantee?
Yes, always: whether one is required, whether it is capped at a fixed amount, and whether it covers only this agreement or anything the company ever owes that funder. The answers materially change what you are signing, and they vary between providers.
How do I check who is behind an MCA offer?
Look the company up on Companies House for trading history and filed accounts, and check the FCA register to understand what any claimed status covers. Ask the introducer, if there is one, how they are paid and by whom, in writing. Reputable firms answer these questions readily.
Is CapExpand FCA regulated?
No. CapExpand Ltd is not authorised by the Financial Conduct Authority and only completes non-regulated introductions, which is why we currently work with limited companies and LLPs for business purposes rather than sole traders or partnerships.
Got an offer in front of you?
Send it over. We will put the twelve answers side by side with any alternative worth comparing.
Important information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business and commercial purposes. We are not a lender and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a deal completes, at no cost to you. All lending is subject to status, valuation where applicable and the lender's own checks.
Registered office: Pure Offices, Lake View Drive, Annesley, Nottingham, NG15 0DT. Company No. 14433858.