Merchant Cash Advance (MCA)

What is a Merchant Cash Advance?

A Merchant Cash Advance is finance that provides businesses with upfront capital in exchange for a portion of future credit and debit card sales. Unlike traditional loans with fixed repayment schedules, MCAs (Merchant Cash Advances) offer flexible repayment terms tied directly to a business’s sales volume. Businesses receive a lump sum payment and subsequently repay a percentage of daily card transactions until the total amount, including fees, is settled. MCA funding is often sought for rapid access to capital, particularly when traditional lending options may be inaccessible or time-consuming.

Applying with Portman, you’ll need to operate your business in a way that allows a minimum monthly card sales amount of £5,000. This flexible solution takes away the stress of fixed monthly payments and allows you to focus on what really matters – your business.

No. Unlike traditional loans, Merchant Cash Advances (MCAs) don’t require collateral. This makes them a potential option for businesses with limited assets. MCAs work differently than loans – instead of borrowing a specific amount and repaying it with interest, you sell a portion of your future credit card sales to the MCA provider at a discount. Your repayment is tied to your sales performance, which can offer your business some flexibility.

A Merchant Cash Advance (MCA) is an unsecured way of accessing finance and is not a loan. This means your home is not at risk. Our lenders will require Personal Guarantees (PGs) if you are applying for a Merchant Cash Advance.

Certainly. If the minimum criteria is met, various business structures such as sole traders, partnerships, and limited companies are eligible to apply for a Merchant Cash Advance (MCA). Homeownership status is not a determining factor.

The interest rates available to each customer vary based on a large number of factors including the trading history and credit rating of the business, the credit history of any company directors, company turnover, how much money is required and what the funds are being used for. For customers with the best credit rating, Annual Flat Rates start from: Vehicle Finance – 5.5% Asset / Equipment Finance – 5.9% Growth Guarantee Scheme Asset Finance – 6.49% Unsecured Term Loan – 7.2% No PG Tax Loan – 9.4% Short-term Loan – 12.3% Short-term Flexi-Loan – 13.2%

Unfortunately, Portman can only finance companies registered and operating in the UK.

Terms are available between 2 and 6 years. Options available to you may be dependent on the circumstances of your business, but then the final choice is up to you.

On the contrary, asset finance is designed to spread costs over a period of time, whilst your new equipment generates revenue. Using your business’ cash or credit card and buying outright can mean that there’s no free cash for emergencies or to cover fluctuations in demand. Using finance helps even out the monthly budget and choosing a lease finance or hire purchase deal allows you to treat tax in different ways which may suit your business better. Finance allows you to get what you need now, rather than waiting to buy outright, this helps avoid inflation, as you buy at today’s prices and means you have use of the asset immediately to help grow your business.

Whilst banks can offer different rates, they often reject certain type of purchase, businesses in different industries and have very strict lending criteria. At Portman we deal with a panel of over 40 lenders as well funding businesses with our own money. We have access to specialist lenders and specialist types of finance, giving a variety of options and a greater chance of success. Portman may have rates that are not available to a customer who goes direct and can also explore the whole lending market in one go, saving you time. We have access to specialist lenders that are not available to individuals and can even put together finance packages from multiple lenders. All of which gives you competitive rates, with a greater chance of acceptance.

The amount that you are able to borrow very much depends on a combination of your own personal circumstances and the trading history of your business. Like a mortgage, finance amounts can also be affected by the size of your business. Broadly speaking we offer finance agreements from around £10,000 up to approximately £2,000,000

Receiving late payments or paying late yourself can create hurdles affecting your financial stability and the relationships you’ve worked hard to build with your clients. Read how you can both avoid and manage late payments with Portman’s helpful guide on Late Payment Fees & Charges.