Merchant Cash Advance for UK Businesses
For many UK businesses that rely on debit and credit card transactions — such as restaurants, retail stores, salons, bars, and those using delivery apps like Just Eat, Deliveroo, or Uber Eats — managing cash flow can be challenging.
A Merchant Cash Advance (MCA) provides a fast and flexible alternative to traditional loans, offering working capital that moves in rhythm with your daily card sales.
Gable helps businesses across the UK access MCA funding from trusted providers, ensuring smoother cash flow and less stress during slower trading periods.
What is a Merchant Cash Advance?
A Merchant Cash Advance (MCA) is a type of business funding where your company receives a lump sum of cash in exchange for a percentage of future debit and credit card sales.
Unlike a conventional loan, it doesn’t come with fixed monthly repayments or traditional interest rates. Instead, repayments are made automatically as a fixed percentage of your card sales, meaning you pay more when business is strong and less when it’s quiet.
How does a Merchant Cash Advance work?
1. Upfront funding
The MCA provider reviews your recent card sales history — typically over the past three to six months — to determine an appropriate advance amount.
Based on this data, they offer you a lump sum, usually ranging from £5,000 to £500,000 depending on your business’s turnover.
2. Repayment through card sales
Repayments are automatically deducted as a fixed percentage of your daily or weekly card sales.
For example, if your repayment rate is 10% and you process £1,000 in card sales in a day, £100 will go towards repaying your advance.
3. Flexible payments
Because repayments are linked to sales, they naturally adjust with your revenue.
When your business has a busy week, more is repaid; when trade slows down, repayments decrease — helping you manage cash flow during quieter periods without falling behind.
4. Fixed cost structure
Instead of paying interest, an MCA uses a factor rate to determine the total repayment.
This rate is agreed upfront and does not change. For instance, if you receive a £10,000 advance with a factor rate of 1.4, you’ll repay a total of £14,000, regardless of how quickly it’s paid off.
Key benefits of a Merchant Cash Advance
- Fast access to capital: MCAs are often approved within 24 to 72 hours, much quicker than traditional loans.
- No collateral required: You don’t need to pledge property or other assets — your future card sales act as security.
- Flexible repayments: Payments rise and fall with your sales volume, easing pressure during slower periods.
- Simple qualification: Lenders base decisions on your sales history rather than strict credit requirements.
- Fixed total cost: You know exactly how much you’ll repay from the outset — no surprise interest charges or variable rates.
- Ideal for card-based businesses: Suited for any business that takes a steady stream of debit or credit card payments or processes sales via online delivery platforms.
Things to consider before applying
- Higher cost: Because of the factor rate model, MCAs can be more expensive than traditional bank loans.
- No discount for early repayment: The total amount to repay is fixed from the start, even if you clear it quickly.
- Sales-dependent suitability: This funding works best for businesses with consistent card or app-based sales. Cash-only or invoice-based businesses may not qualify.
Despite the higher cost, many small businesses find the flexibility and speed of MCAs invaluable, particularly when cash flow gaps arise or urgent funding is needed.
Merchant Cash Advance example
Suppose your café processes an average of £20,000 in monthly card sales.
A provider may offer an advance of £15,000 with a factor rate of 1.3, meaning you’ll repay £19,500 in total.
If your agreed repayment percentage is 10%, then 10% of each day’s sales is automatically collected until the total repayment is complete.
When trade is brisk, you’ll repay faster; during slower months, repayments ease naturally.
Who can benefit from a Merchant Cash Advance?
MCAs are ideal for businesses with consistent card turnover or those using digital sales platforms.
This includes a wide range of industries where sales fluctuate seasonally or daily.
- Restaurants, cafés, takeaways and pubs
- Hairdressers, salons and barbers
- Retail shops and small supermarkets
- Bars and entertainment venues
- Delivery-based businesses using Just Eat, Uber Eats, Deliveroo or similar apps
- Service-based trades such as garages, gyms and dry cleaners
Case Study 1 — Independent Hair Salon
Business: Boutique hair salon in Manchester
Challenge: The owner needed £12,000 to refurbish the salon and invest in premium products but had limited savings and didn’t want to take on a traditional loan with fixed repayments.
Solution: Gable arranged a Merchant Cash Advance of £12,000 based on three months of steady card sales through their payment terminal. Repayments were set at 12% of future card sales.
Outcome: The salon used the funds to refresh its interior and attract new clients.
During busy summer months, repayments accelerated naturally, and when trade slowed in winter, the repayment rate adjusted — keeping cash flow comfortable throughout the year.
Case Study 2 — Small Supermarket
Business: Independent grocery store in Birmingham
Challenge: The store wanted to increase stock levels and introduce new chilled sections before Christmas but lacked the working capital to purchase in bulk.
Solution: Using six months of POS (point-of-sale) data, Gable helped secure a £25,000 advance with a 1.35 factor rate. Repayments were collected automatically from daily debit and credit card sales.
Outcome: The business boosted sales during the holiday season, repaid the advance smoothly, and gained additional supplier discounts through bulk buying.
The owner now uses MCAs each year to prepare for seasonal peaks.
Case Study 3 — Bar and Restaurant Using Delivery Apps
Business: Family-owned bar and restaurant in Leeds with a growing takeout arm through Uber Eats and Deliveroo.
Challenge: Rising delivery demand required investment in packaging, new kitchen equipment and marketing, but cash reserves were low after a quiet winter.
Solution: Gable arranged a £40,000 Merchant Cash Advance linked to both card and delivery platform sales.
Repayments were set at 8% of total sales processed through card terminals and app payouts.
Outcome: The business expanded its kitchen, improved delivery capacity and saw turnover increase by 30% within six months.
The flexible repayment structure ensured that the business stayed cash-positive even during slower weekdays.
Merchant Cash Advance vs. Traditional Business Loans
| Feature | Merchant Cash Advance | Traditional Business Loan |
|---|---|---|
| Repayments | Percentage of card sales (variable) | Fixed monthly payments |
| Qualification | Based on sales history, not credit score | Based on credit score and financial accounts |
| Collateral required | No | Often yes (secured loan) |
| Speed of funding | 24–72 hours | 1–4 weeks |
| Cost structure | Fixed factor rate (no interest) | Variable or fixed interest rate |
| Best for | Businesses with steady card or app-based sales | Businesses with stable cash flow and longer repayment capacity |
Frequently Asked Questions (FAQ)
Q: How quickly can I get a Merchant Cash Advance?
A: Once approved, funds can typically be deposited into your account within 24–72 hours. Gable’s panel of MCA providers ensures a fast and seamless process.
Q: What businesses qualify for an MCA?
A: Any business taking regular debit and credit card payments may qualify. This includes cafés, bars, restaurants, salons, shops and takeaway businesses using delivery apps.
Q: How much can I borrow?
A: Funding amounts range from around £5,000 to over £500,000 depending on your average monthly card sales and trading history.
Q: Do I need good credit to get approved?
A: Credit checks are less important for MCAs. Approval is mainly based on consistent card sales and business performance, making them ideal for those with limited credit history.
Q: What’s a factor rate?
A: The factor rate determines the total cost of the advance. For example, a £10,000 advance with a 1.4 factor rate means you repay £14,000 in total — no matter how quickly it’s repaid.
Q: Can I repay early?
A: Yes, but there’s no discount for early repayment since the total repayment amount is fixed when you accept the offer.
Q: Can online or delivery sales be included?
A: Absolutely. Gable’s MCA providers can link repayments to both in-store card terminals and online payment processors like Stripe, Square, or delivery apps such as Just Eat and Uber Eats.
Q: Is a Merchant Cash Advance a loan?
A: No. It’s technically a purchase of your future card sales. You receive a lump sum upfront, and the provider collects a percentage of your future sales until the agreed total is repaid.
Q: Can seasonal businesses use MCAs?
A: Yes. Seasonal businesses often find MCAs ideal because repayments naturally adjust with sales — helping maintain stable cash flow all year round.
Q: What can the funds be used for?
A: You can use MCA funds for almost any business purpose — such as stock purchases, refurbishment, marketing, paying suppliers, or expansion costs.