Repayments that fall when takings do.
A merchant cash advance flexes with your sales rather than demanding the same amount on the same date. That is genuinely useful in a seasonal business — provided you go in knowing what it costs.
An advance against your card machine
A lender advances a lump sum and takes an agreed percentage of every card transaction until it is repaid. Busy month, faster repayment; quiet month, smaller payments. There is no fixed end date and no monthly direct debit to miss.
Because repayment is tied to card takings, decisions rest on your card processing history rather than filed accounts. Funding is often agreed within days, which is why it appeals — and why it is sometimes used when something cheaper would have done.
Where it earns its place
Retail, hospitality and anything with steady card volume and uneven months.
Typically a good fit when
- Most of your revenue arrives by card — restaurants, salons, shops, bars
- Trading is seasonal and fixed monthly repayments are uncomfortable
- You need funds in days rather than weeks
- Accounts are thin but card takings are consistent
- The money funds something that lifts sales — a refit, stock, marketing
What it costs, without the euphemism
Cost is quoted as a factor rate rather than an interest rate: borrow £20,000 at a factor of 1.2 and you repay £24,000, whenever that takes. There is usually no What this meansThe yearly cost of borrowing, shown as a percentage. It includes the interest plus most compulsory fees, so it is the fairest way to compare two offers side by side. on the paperwork, which makes it hard to compare with a loan — so convert it.
If that £24,000 is repaid over nine months, the equivalent annual cost is well into the twenties as a percentage. That can still be the right call for a refit that lifts covers. It is the wrong call for something a business loan would have funded at half the cost.
Questions we are asked most
How much can I get?
Typically one month of card turnover, sometimes more where trading is long-established and consistent. Lenders look at the last four to twelve months of card settlements to size it.
What if sales dry up completely?
Repayment pauses, because it only happens when a card is taken. That is the genuine advantage over a loan. The debt does not reduce either, and most agreements include a longstop date, so a long quiet spell still needs a conversation with the lender.
Is it cheaper than a business loan?
Almost never. It is faster, more flexible, and easier to qualify for — those are its advantages. If your accounts support a business loan, that is usually the cheaper money, and we will show you the two totals side by side before you decide.
Compare an advance against a loan before you take one.
Send us three months of card statements and we will price both.
Or email info@nemekfinance.co.uk · Call 07483 159369
No obligation, no credit check to talk, and a straight answer if finance is not the right move.