Lending Box

Merchant cash advance

A merchant cash advance (sometimes called revenue-based finance) provides a lump sum based on a business's card takings, repaid automatically as a percentage of future card sales rather than fixed monthly instalments. Repayments rise and fall with turnover, which suits businesses with variable or seasonal income.

This page explains how the product is structured, what it typically costs, and who it suits. Lending Box is a whole of market broker, not a lender: we compare providers but don't set the terms ourselves.

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Updated 2 October 2026 · Lending Box editorial team

Who it's for
UK Ltd companies, PLCs and LLPs taking regular card payments from customers
Typical amounts
Roughly 1–1.5x average monthly card takings, up to £1,000,000
Typical terms
4 to 18 months, until the advance is repaid
Minimum turnover
£100,000 a year to use Lending Box
Security
Usually unsecured; repayment is a fixed percentage of card takings

Indicative only. Subject to lender assessment and approval.

Who it's for

  • Retailers, restaurants, salons and other businesses with regular card takings.
  • Businesses with seasonal or variable income, who want repayments that flex with sales rather than a fixed amount every month.
  • Companies that want to avoid a fixed monthly repayment obligation during quieter trading periods.
  • Businesses that may not qualify for a standard loan but take consistent card payments.

How it works

  1. 1You tell us your average monthly card takings over the last 3–6 months.
  2. 2A provider typically offers an advance of around 1–1.5x that monthly average, depending on your trading pattern and provider's criteria.
  3. 3You agree a factor rate (commonly in an illustrative range of around 1.15–1.30) which determines the total amount repayable, and a fixed percentage of daily or weekly card takings (often around 10–15%) that's automatically deducted until repaid.
  4. 4Repayments continue until the full amount is repaid; there is no fixed end date, so a quieter trading period naturally slows repayment rather than causing a missed payment.

How the factor rate works

Unlike an interest rate, a factor rate is applied once to the amount advanced to calculate the total repayable, rather than accruing daily or monthly.

  • An advance of £30,000 at an illustrative factor rate of 1.20 means £36,000 is repaid in total, whenever that happens.
  • Because the fee is fixed at the outset, repaying faster doesn't reduce the total unless the provider offers an early settlement discount — always ask.
  • Factor rates typically range from around 1.15 to 1.30, though the exact rate depends on the provider's assessment of your business.

How the repayment percentage is set

The provider agrees a fixed percentage of your daily or weekly card takings that's automatically withheld by your payment processor and sent to the provider, commonly in an illustrative range of around 10–15%.

  • A higher percentage repays the advance faster but takes a bigger bite out of daily cash flow.
  • A lower percentage eases daily pressure but extends how long repayments continue.
  • Because it's a percentage, not a fixed amount, a slow trading week automatically means a smaller repayment that week.

What to check before agreeing

A few questions are worth asking any provider before signing.

  • Is there an early settlement discount if trading is stronger than expected?
  • What happens if card takings drop significantly for an extended period?
  • Does the advance need to be cleared, or consented to, if you switch card payment processor?
  • What's the total amount repayable in cash terms, not just the factor rate?

How a broker helps

Factor rates, advance multiples and repayment percentages vary between providers, and the structure can be harder to compare than a simple interest rate. As a whole of market broker, we set out the total cost in plain terms so you can compare a cash advance fairly against a standard loan or other options. Our service is free to your business; we're paid a commission or finder's fee by the provider if finance completes, as set out in our Broker Terms.

Eligibility

  • A UK limited company, PLC or LLP (not sole traders or partnerships).
  • Annual turnover of at least £100,000, with a meaningful share taken via card payments.
  • Usually at least 6 months of card takings history with your payment processor.
  • A business bank account and card terminal provider the lender can review.
  • Directors willing to give a personal guarantee, in most cases.

Documents you'll need

  • 3–6 months of card terminal statements showing takings.
  • 3–6 months of business bank statements.
  • Latest filed accounts, if available.
  • Details of your card payment processor.
  • Photo ID and proof of address for directors.

Advantages

  • Repayments flex automatically with sales, easing pressure in quieter periods.
  • Can be accessible to businesses that a standard loan might decline, since underwriting focuses on card takings.
  • No fixed monthly repayment to miss — the deduction is a percentage of what actually comes in.
  • Can often be arranged quickly, since the underwriting data (card takings) is relatively simple to assess.

Things to weigh up

  • The factor rate means the total cost can be higher than a standard loan over an equivalent period, especially if trading is strong and the advance repays quickly without an early settlement discount.
  • Because there's no fixed term, it can be harder to predict exactly when the advance will be repaid.
  • Relies on card takings continuing at a broadly similar level; a sharp, sustained drop in sales extends the repayment period.
  • Taking on a second advance before the first is repaid ('stacking') can seriously strain cash flow and should be approached with real caution.

Worked example (illustrative)

A café takes an average of £18,000 a month in card payments. A provider offers an advance of £20,000, roughly 1.1x average monthly takings.

At an illustrative factor rate of 1.20, the total repayable is £24,000. The agreed repayment percentage is 12% of daily card takings.

If average daily card takings are around £600, roughly £72 a day is withheld, meaning the advance would typically clear in a little under a year, faster in busier months and slower in quieter ones. The real rate, multiple and percentage depend entirely on the provider's assessment.

Revenue-based finance calculator

£
£5,000£500,000
£
£5,000£1,000,000

Total to repay

£57,500 – £65,000

Advance (up to)
£50,000
You could be offered
£40,000 – £60,000
Estimated time to repay
about 10–16 months
Per £1,000 of card takings
about £100–£150
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Repaid as a share of your card takings (10%–15%), so you pay more in busy months and less in quiet ones. Factor rate 1.15–1.30. Advances are usually 1–1.5× monthly card takings.

Illustrative only. Indicative only. Subject to lender assessment and approval.

Frequently asked questions

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Lending Box helps UK businesses access business finance, working directly with businesses and their trusted advisers. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 or over, and terms and conditions apply. Guarantees and indemnities may be required. Lending Box can introduce applicants to a number of providers based on each applicant's circumstances and creditworthiness. We can also make insurance introductions. Lending Box will receive a commission or finder's fee for arranging such finance and insurance introductions. Broker Terms

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UK limited companies and LLPs. Indicative only. Subject to lender assessment and approval.

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