What is a merchant cash advance?
A merchant cash advance is a lump sum given to your business in exchange for a percentage of your future card sales. You get the money upfront, and repayments come out of your card takings automatically. Busy week? You repay more. Quiet week? You repay less.
If you run a restaurant, shop, salon, or online store and you take regular card payments, chances are you've already been offered one. They're everywhere in the UK business funding market in 2026. But most people don't fully understand how they work before signing up. This page fixes that.
Last updated: April 2026
How does a merchant cash advance work?
You apply
Tell us about your business. Turnover, sector, how much you need. Takes about 2 minutes.
A provider makes an offer
The lender reviews your card sales data and offers you a lump sum with a factor rate. You see the total cost upfront.
You receive the funds
Once you accept, money lands in your account. Most UK MCA providers fund within 24 to 48 hours as of 2026.
Repayments happen automatically
A small percentage of your daily card sales goes to the lender. Busy day, you pay more. Quiet day, you pay less. No fixed monthly amount.
What does a merchant cash advance cost?
MCA costs are shown as a factor rate, not an interest rate. Here's a quick example:
You borrow
£10,000
Factor rate
1.2
You repay
£12,000
Factor rates in the UK business funding market in 2026 typically range from 1.1 to 1.5. The rate you get depends on your monthly card turnover, how long you've been trading, and your business sector.
For illustration only. Actual costs depend on the provider and your business profile. We do not provide financial advice.
Read our full guide to factor rates →MCA vs business loan vs overdraft
None of these is "better" than the others. They're built for different situations. Here's how they compare:
| Merchant Cash Advance | Term Loan | Business Overdraft | |
|---|---|---|---|
| Repayments | % of card sales (flexible) | Fixed monthly | Interest on balance used |
| Speed | 24-48 hours | Days to weeks | Varies |
| Credit check | Usually soft | Hard | Hard |
| Min trading | 3-6 months | 2+ years typical | Established relationship |
| Best for | Card-heavy businesses | Established, steady income | Short-term cash flow gaps |
Who typically uses a merchant cash advance?
Most business owners we speak to fall into one of these categories. If any of these sound like you, an MCA might be worth looking at.
Restaurants and cafes
High card volume, seasonal ups and downs. Flexible repayments make a real difference.
Retail shops
Need stock fast for a busy period. Can't wait weeks for a bank loan to come through.
E-commerce sellers
Shopify, Amazon, eBay sellers. Some providers integrate directly with your platform.
Pubs and bars
Refurbishment, new equipment, or just bridging a quiet January. MCAs are built for this.
Salons and barbers
Equipment upgrades, second chairs, fit-outs. Smaller amounts, fast turnaround.
Businesses turned down by banks
Your bank said no? Doesn't mean you can't get funded. MCAs use a different model entirely.
Frequently asked questions about merchant cash advances
Is a merchant cash advance a loan?▼
Technically, no. An MCA is the purchase of future receivables, not a loan. The provider buys a portion of your future card sales at a discount. This distinction matters because MCAs are structured differently from traditional lending.
How much does a merchant cash advance cost in the UK?▼
Costs are shown as a factor rate, typically between 1.1 and 1.5 in the UK market in 2026. A factor rate of 1.2 on a £10,000 advance means you repay £12,000 in total. The rate you get depends on your turnover, sector, and trading history.
How long does it take to get a merchant cash advance?▼
Most UK MCA providers offer decisions within 24 hours and fund within 24 to 48 hours after approval. Some providers offer same-day funding for straightforward applications.
Do I need good credit to get an MCA?▼
Not necessarily. MCA providers focus on your card turnover and business performance rather than your personal credit score. Businesses with CCJs or limited credit history can often still qualify.
Is a merchant cash advance regulated by the FCA?▼
MCAs are not regulated credit agreements under the Consumer Credit Act 1974 because they involve buying future receivables rather than lending money. However, responsible providers and introducers follow industry best practice and voluntary codes.
Can I repay a merchant cash advance early?▼
With most providers, you repay the full agreed amount regardless of how quickly you repay it. Since repayments are a percentage of sales, the more you sell, the faster you repay. There are usually no early repayment penalties, but you still pay the full total repayable amount.
Real customers. Real reviews.
Verified on Trustpilot
“Repayments flex with our sales so quieter months aren't stressful.”
“Everything managed super quickly and without much effort on my part. Just what you need when running a business. Would defo use again.”
Wondering what you'd actually qualify for?
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