Merchant cash advance – Flexible funding based on card sales
A merchant cash advance lets you unlock funding repaid as a fixed % of your card sales—so repayments flex with revenue. Compare MCA providers in minutes with Funding Options by Tide.
Last updated: October 2025, edited by Joe Morley, reviewed by Vivek Seda
What it is and how it works
What is a merchant cash advance?
A merchant cash advance is a type of unsecured funding based on your business’s average monthly card sales. It allows you to borrow a lump sum upfront and repay it gradually through a fixed percentage of each card transaction until the balance is cleared.
There are no fixed monthly repayments. You repay more when business is booming, and less during slower periods.
How does it work?
Apply based on your average monthly card takings
Get approved and receive a lump sum (typically £2,000 to £300,000)
Repay through an agreed percentage of daily or weekly card sales
No fixed terms - you repay as you trade
Example
If you take £20,000 in monthly card payments and the provider advances you £15,000, you’ll repay through a fixed percentage of your future card sales - say 10%.
This means if one day you make £1,000 in card sales, £100 goes toward repayment. If the next day you make £400, you repay £40.
Common use cases
Managing seasonal cash flow
Perfect for hospitality, retail, beauty, or tourism businesses that experience busy and quiet periods throughout the year.
Investing in stock or inventory
Buy more stock ahead of peak trading periods without tying up cash flow.
Covering unexpected costs
Pay for repairs, emergency staffing, or last-minute supplier expenses with minimal disruption.
Upgrading premises or equipment
Refurbish your shop, update your salon equipment, or invest in tools to grow your business.
Launching a campaign
Boost visibility and sales by investing in digital marketing or local promotions.
Is MCA it right for your business?
Merchant cash advances are best suited for:
UK-based businesses with regular card sales
retail, hospitality, beauty, and service industries
SMEs needing flexible, fast, and unsecured finance
businesses with fluctuating income patterns
It may not be suitable for B2B businesses with high invoice volumes and few card transactions.
Merchant cash advance vs business loan
Feature | Merchant Cash Advance | Business Loan |
Repayment | % of card sales | Fixed monthly repayments |
Suitable for | Seasonal income businesses | Predictable cash flow |
Collateral required | No | Sometimes |
Flexibility | High | Medium |
Application speed | Fast (24–72 hours) | Medium (a few days to weeks) |
What lenders look at
Lenders typically review:
your average monthly card revenue (usually £2,000 minimum)
trading history (usually 6–12 months)
volume and consistency of transactions
your business type and sector risk profile
overall credit health (personal or business)
You don’t usually need a business plan or security to apply.
Pros and things to consider
Pros and things to consider
Pros | Considerations |
Repayments flex with your income | Limited to businesses with strong card sales |
No fixed monthly instalments | Can be more expensive than other products |
Quick access to funding | Repayment percentage reduces daily cash flow |
No need for assets as collateral | Not ideal for long-term investment |
Simple application based on card takings | Facility size depends on past card revenue |
Alternatives to a merchant cash advance
Short-term business loans
Revolving credit facilities
Invoice finance
Business overdraft
Business credit card
Eligibility and requirements
To qualify for an MCA, lenders typically expect:
At least 3–6 months of card sales history
A minimum monthly turnover (often £2,500–£5,000)
Trading through a card terminal or online gateway
UK-based, actively trading business
Credit checks may still apply, but approval is often based more on your card sales record than credit score.
Example scenario
A café with average monthly card takings of £15,000 applies for an MCA. The lender advances £20,000 with repayments set at 10% of daily card sales. If the café has a busy day, it repays more. On quieter days, repayments are lower.
This helps the café manage cash flow without worrying about fixed repayments during slower weeks.
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Learn more about merchant cash advances
Do I need a good credit score for a merchant cash advance?
Lenders mainly assess your card sales, not just your credit score.
How much can I borrow?
Usually 50–150% of your average monthly card sales.
How quickly can I get funds?
Many MCAs are approved within 24–48 hours once documents are provided.
Is it more expensive than a loan?
MCAs can carry higher costs than loans, but the flexibility of repayments makes them attractive to many businesses.
Can any business apply?
They are most suitable for businesses with consistent card sales. If you mainly invoice customers, invoice finance may be a better fit.
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.