Working capital · merchant cash advance
Repayments that flex with your trading.
An advance against your future card sales. Repayment is a percentage of daily card takings, so quiet days cost you less. Genuinely expensive in absolute terms; sometimes the right fit for retail and hospitality with strong card sales but limited security.
What it is, when it fits
Plain English, with the trade-offs.
A merchant cash advance (MCA) isn't technically a loan. The lender purchases a portion of your future card sales at a discount; you receive cash now, the lender takes an agreed percentage (usually 10% to 20%) of each daily card transaction until the advance plus the agreed factor is repaid. Because repayment is a percentage of daily takings, quiet days cost you less and busy days cost you more, so the structure flexes with trading. That flex is the only reason MCA exists; in absolute cost terms, MCAs are expensive (factor rates of 1.15 to 1.45 over 4 to 12 months translate to 25% to 50% p.a. effective). They suit retail, hospitality, and beauty services with strong card volume but limited security or credit history. They're never the right answer when a cheaper structure (cashflow loan, unsecured term loan, line of credit) will settle in time. We're explicit about total cost before recommending an MCA, and we tell clients no when the structure isn't actually the right fit.
Café owner pouring coffee at a warm-lit espresso bar.
Typical scenarios
Hospitality post-renovation cashflow
Why: Refit complete, opening soft, card volume building.
Outcome: $80K MCA, factor 1.30, repaid as percentage of card sales over ~6 months.
Retail bridging until peak season
Why: Stock buying ahead of peak; previous loan recently paid out.
Outcome: $50K MCA, factor 1.25, paid out as the peak season clears.
Beauty services funding equipment
Why: Specialised treatment equipment, card-heavy revenue.
Outcome: $30K MCA, factor 1.30, daily card-volume repayment.
Café smoothing seasonal patterns
Why: Strong summer trade, slow winter; need bridging capital.
Outcome: $40K MCA, factor 1.25, repayment naturally reduces through winter quieter days.
Lenders for this product
Who we work with.
- Capify
- Prospa
- Banjo Loans
- GetCapital
Lender accreditation varies; not every lender is available for every deal. We pick from the panel based on your specific situation.
How it works
From brief to settlement.
- 01
Trading review
We review card volume, trading patterns, and the actual cashflow gap. If a cheaper structure fits, we recommend that instead of an MCA.
- 02
Honest cost modelling
We translate factor rate and expected repayment time into effective annual cost and total dollar cost. No hiding behind factor-rate jargon.
- 03
Lender selection
Three to four lenders dominate this space; we match deal size and trading profile to the right one.
- 04
Settlement
Funds settle within days of acceptance. Repayment runs automatically through the card processor; we follow up in case early payout makes sense.
Indicative pricing & terms
Ranges, not promises.
Rate range
1.15 to 1.45 factor rate (≈ 25 to 50% p.a. effective)
Loan size
$5K to $300K
Term
Typically 4 to 12 months
Security
Future card receivables; sometimes director's guarantee
Indicative only; specific pricing depends on lender, security, and your business profile.
Frequently asked
Honest answers, plain English.
Is this a loan or something else?
Legally, an MCA is a purchase of future receivables, not a loan. Practically, the experience is loan-like: you receive cash, you make repayments, the contract ends when the agreed amount is collected. The legal distinction matters for some accounting and tax treatments; speak to your accountant.
How is the cost actually calculated?
Total repayment = advance × factor rate. So a $50K advance at factor 1.30 means total repayment of $65K, regardless of how fast you repay it. Faster repayment doesn't reduce the cost (unlike interest-bearing loans). That's why effective annual cost varies so much by repayment speed.
What's a factor rate?
A factor rate is a multiplier applied to the advance to determine total repayment. Factor 1.20 = repay 1.2 × advance. Translating to effective annual rate depends on repayment speed, which is why we always model expected repayment time before quoting effective cost.
Will this affect my POS terminal?
Most MCAs work alongside your existing POS without changes; the lender debits a percentage of daily card takings via your existing payment processor. Some require switching to the lender's preferred processor, which is a meaningful operational hassle.
Can I have multiple MCAs?
Technically yes; practically, stacking MCAs almost always signals a deeper cashflow problem and accelerates the doom loop. We don't recommend stacking. If the situation needs more capital, a different structure usually fits better.
When is this NEVER the right answer?
When you can comfortably qualify for a cashflow loan or unsecured term loan at half the cost. When the underlying issue is structural rather than seasonal. When you're stacking on top of an existing MCA. When card volume is volatile or recently declining.
Related products
If this isn't quite the fit.
Next step
Twenty minutes, no obligation.
Tell us the shape of the deal and the timing. We'll send a lender shortlist for merchant cash advance or, if it isn't the right fit, an honest signal of what is.