image of a card payment being taken on contactless card machine for website J&J Commercial Finance

Does your business need a quick cash injection?

Ever heard of merchant cash advance?

Let me start by giving you an overview of what merchant cash advance is, as this type of business finance has only been around the last few years, and give you a quick business loan for your business.

Merchant cash advance uses your card terminal to secure lending, a great option for those businesses with little in the way of assets but with a decent volume of card transactions each month.

You then pay back only as you earn, through an agreed amount of your debit & credit card sales.

It is a quick and easy route to gaining access to a loan, making this way of lending more popular among the retail and leisure sectors.


How could it benefit my business?

If your business uses a card terminal to take customers payments, then you will have a company that process those transactions for you. The lender will work with your terminal provider to gain visibility of your business’s income.

This means, unlike many other forms of lending, there is little need for a detailed look into your accounts, allowing the process of agreeing a loan amount and repayment plan a lot faster.

If you need a quick cash injection for your business or have little in the way of assets, this way of lending is a good option.

To add to that.

Due to the lender taking a % off each card transaction as repayment, it means, if you run a seasonal business, you don’t have the worry of fixed monthly payments during their quieter periods.


So how much could I borrow?

This is a simple one to answer.

The general rule-of-thumb is that you will be able to borrow the equivalent to what your business takes in card payments on an average 4-6-week period.

For example

If your business takes on average around £10,000 a month, you would be looking at a loan of around £8,000 to £15,000.

The repayment is usually around 15-25% of your monthly takings until the loan and the agreed charge for that loan is repaid.


What are the downsides of a merchant cash advance?

As much as this way of lending can be quick, easily obtainable and flexible in repayments, it can be a more expensive option.

Also, if your business receives payments in a variety of different ways, it could mean that this solution could fall short for your needs. If you do not take a sizeable chunk of your income through a card terminal than the amount you can borrow becomes very limited.

However, if your business is in the leisure sector – for example, restaurants, clubs, bars, shops etc and you struggle to get finance or you need cash quick and your cashflow situation is positive, then this type of lending is straightforward and fast!


Want to know more about Merchant Card Advance or looking for advice and guidance on your finance options, call Jamie on 01709 805 624 or 07399 660 002