A merchant cash advance is a form of business funding repaid as a percentage of a companys card sales. Instead of fixed instalments, repayments rise and fall with the businesss daily takings.
Who tends to use it
It is most associated with businesses that take a lot of card payments, such as retail and hospitality, where card turnover is steady and predictable.
Things to weigh up
Because repayments flex with sales, slow periods cost less and busy periods cost more. As with any finance, understand the full cost and terms before committing.
- Repayments are linked to card turnover.
- It suits card-heavy businesses.
- The total cost depends on the agreed terms.
Credicorp Flex and Slice are different products with their own structures. We can help you understand which approach fits how your limited company or LLP actually trades.
See also: Merchant cash advance vs term loan, How retention payments affect construction cash flow and What is a maturity date?.