What is a merchant cash advance and how is it repaid?
A merchant cash advance (MCA) is a way for a business to receive funds up front and repay them over time, usually from a share of future card payments or through regular fixed amounts. It is not the same as a traditional bank loan, so it helps to understand the differences before you apply.
How repayment usually works
Providers set out how much you receive, the total amount you repay, and how repayments are collected. Some take a percentage of daily card takings. Others collect a fixed amount on a schedule. The method is set by the provider, so read the agreement closely.
What to ask before you sign
- What is the total amount I will repay, including all fees?
- How are repayments collected, and how often?
- What happens if my takings fall?
- Is there an early repayment option, and does it reduce the cost?
- Is the provider authorised or registered where required?
Is it right for you?
An MCA may suit some businesses with regular card takings that need funds quickly. It can cost more than other forms of finance, so compare it with other options first. A provider assesses every application and we cannot promise approval.
This article is general information, not financial advice.