2 min read
Definition
A merchant cash advance is a lump sum advanced to a business and repaid as a fixed percentage of its future card takings, rather than in fixed instalments. Repayments flex with sales — more when busy, less when quiet — which suits businesses with strong card revenue and variable trade.
In plain terms
You receive cash now and repay automatically as a slice of each day's card sales until the agreed total is settled. There is no fixed term; how fast you repay depends on how well you trade.
Why it matters
It is flexible but can be an expensive way to borrow, so weigh the total cost carefully against alternatives. See the merchant cash advance guide.
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