Merchant cash advances
Fast capital against future card sales, no asset security required. The trade-off is cost, mCAs are usually more expensive than a business overdraft or line of credit.
A merchant cash advance provides an upfront lump sum in exchange for a fixed percentage of your future card sales, repaid as you take payments rather than on a fixed monthly schedule. It’s fast to arrange, rarely requires asset security, and works well for businesses that don’t have the time (or the profile), to run a more traditional application process.
The common assumption is that MCAs are only for businesses in trouble. That’s not accurate. Plenty of well-run businesses use them deliberately, for speed and simplicity rather than as a last resort, you’re paying for that convenience, and it shows up as a higher cost than a business overdraft or line of credit.
How does a merchant cash advance work?
A lender advances a lump sum, then takes an agreed percentage of your card sales (often daily or weekly), until the advance plus a fixed fee is repaid. There’s no traditional interest rate; the cost is built into the fee agreed upfront, and repayments naturally track your sales rather than sitting on a fixed schedule. Our merchant cash advance calculator lets you model the fee and repayment schedule against your actual card sales.
- 01MCAs aren’t just for struggling businesses. Depending on the industry and how much time an owner has to manage a more traditional facility, an MCA can be a genuinely good fit, the cost is what you pay for that speed and simplicity.
- 02Turnaround to approval is fast, and requirements are usually less stringent than most other finance types.
- 03Retail and hospitality businesses often lean heavily on MCAs in their early growth stages, when they need capital to keep expanding but don’t yet have the trading history for cheaper structured debt.
- 04Asset security is rarely, if ever, required, the facility is secured against future card sales, not property or business assets.
Are merchant cash advances bad?
Not inherently, but they’re genuinely more expensive than a business overdraft or line of credit, and that’s the trade-off worth understanding before you sign, not after. You’re paying a premium for speed, simplicity and minimal documentation. Used deliberately (a short-term bridge, a known and manageable cost against a clear return), an MCA can be exactly the right tool. Used as ongoing working capital because it’s easy to access, the cost adds up fast.
The honest advice is the same as with every product on this site: know what you’re comparing it against. If you have the time and trading history to arrange a cheaper facility, that’s usually the better call. If speed and low documentation matter more than shaving the rate, an MCA earns its cost.
Is a merchant cash advance secured or unsecured?
In our experience, asset security is rarely required for an MCA, the facility is secured against your future card sales, not property or business assets. That’s a meaningful difference from a term loan or larger line of credit, where security requirements scale up as the facility size grows.
| Security | Rarely requires asset or property security, secured against future card sales |
| Approval | Fast, typically less stringent documentation than other finance types |
| Repayment | A fixed percentage of card sales, often daily or weekly, not a fixed monthly instalment |
| Cost | Usually higher than a business overdraft or line of credit, the trade-off for speed and low documentation |
Retail and hospitality businesses often rely on merchant cash advances in their early growth stages, not because they’re in trouble, but because speed and low documentation matter more than shaving the rate at that point.
Is a merchant cash advance the same as revenue-based lending?
Different in name, but closely related in mechanics, both repay as a share of what you bring in rather than a fixed instalment. The practical difference is usually speed and documentation: an MCA is typically faster to arrange with less paperwork, tied specifically to card sales, while revenue-based lending tends to look at broader revenue and can offer more scale for an established business. Which one costs less depends on your specific profile, worth comparing both before committing to either.
Two things people get wrong about merchant cash advances
They’re not just for businesses in trouble
Plenty of well-run businesses use an MCA deliberately, for speed and simplicity rather than as a last resort. The higher cost is what you’re paying for that convenience, not a sign the product is only for distressed borrowers.
You don’t need to put up assets
Unlike a term loan or larger line of credit, asset security is rarely required for an MCA. The facility is secured against your future card sales instead, a genuinely different risk structure, not just a faster application.
When is a merchant cash advance not the right call?
If you have the trading history and the time to arrange a business overdraft or line of credit, those facilities are usually cheaper for the same working capital need, an MCA’s cost is the price of speed and minimal paperwork, and it’s not worth paying if you don’t need either. It’s also not the right fit as an ongoing, ever-present facility; MCAs work best as a deliberate, short-term tool, not a permanent fixture in how you fund the business.
If either of those sounds like your situation, say so on the call. Redirecting you to the right product costs us nothing and saves you a facility that doesn’t fit.
Compare this against
Not sure a merchant cash advance is the right shape?
Want a facility built around all revenue, not just card sales?
Revenue-based funding looks at total revenue across channels, not card takings specifically.
See Revenue-based lending →Want fixed repayments instead of a daily or weekly deduction?
An unsecured loan gives you a set schedule rather than a repayment that moves with sales.
See Unsecured business loans →Established enough to qualify for a cheaper revolving facility?
A line of credit is usually the lower-cost option once your trading history supports it.
See Lines of credit →Want the deeper, side-by-side breakdown? Read Merchant cash advance vs overdraft →
How do you actually get a merchant cash advance?
Tell us the basics (your average monthly card sales, what the funding is for, and your ABN), and we take it to the panel without a formal application or a credit check at that stage. If a cheaper product fits better, we’ll say so before you commit to the higher cost of an MCA.
Want the numbers first? Try the merchant cash advance calculator →
Run a hospitality or retail business? See how finance works in this sector →
New to working with a broker? See how a business loan broker works →
Give us the basics below and Andrew will come back with the two or three offers actually worth your time, usually within a business day.