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How does a merchant cash advance work?

Looking to grow your business? Or just need a little extra working capital to keep your business moving? 

Our small business loans are available between £5,000 – £500,000 for almost any purpose.

We’re not a bank. Our lending criteria is different, and we look at more than just your credit profile.

Check your eligibility online in just two minutes, with no impact on your credit score, and you could receive your funds in as little as 24 hours.

How does the business loan work?

Unlike a traditional loan, Capify’s is paid back in very small amounts regularly. The repayments are completely automated so you don’t need to do anything. Many business owners love our regular payments, because they don’t have to save a large amount by a fixed date each month.

To be eligible for a business loan, you'll need to:

The benefits of a Capify business loan

Understand what factors affect eligibility when it comes to small business loans

Small business owners are always busy. Busy growing, busy keeping their customers happy, and busy looking for a small business loan that works for them!

It can be tricky for small businesses to find the right loan. Different banks and finance providers have different eligibility criteria. Some are stricter than others, and some offer better terms and perks than others too.

While you’re looking at your business finance options, it’s important to consider what the application will involve and how likely you are to be approved. The more doors open to you, the more choice you’ll have when it comes to how much you raise, and how the repayments will work.

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Knowing how much to borrow

Think about the purchases you want to make for your businesses – this is the best place to start. Remember, it’s harder to budget for a renovation project, because costs can come out of nowhere. However, a piece of equipment or technology will have a fixed price, so this is a bit easier to plan.

The larger the figure you want to borrow, the tougher it could be to get it from a lender. It will all depend on your average turnover and how much you can comfortably afford to repay.


A great short term finance option

Short term finance is exactly what it sounds like. You raise an amount, then pay it back over a fairly short period to clear the debt faster. This often works for small businesses keen to grow quickly, because they want to get the repayments out of the way.

A short-term loan means you can raise more cash quickly too. With Capify, you can take out a new Merchant Cash Advance once you’ve repaid 60% of your original finance agreement.

Choosing the right type of lender

There are a few Merchant Cash Advance lenders to choose from, and they all offer something a little bit different. The core product will be the same, but repayments might take longer, have different interest rates, or different terms and conditions.

To make sure you choose the best Merchant Cash Advance for your business, look at the different options in detail.

Getting approval from lenders

Different lenders have different eligibility criteria. Generally though, they’ll review your business’ credit report if you run a Limited Company, and your personal credit report if you’re a sole trader.

To get approval, you need to have a reasonably consistent business and payment history. Lenders like to see you’ve been in business for a while, can keep up with existing bills and loans, and have a healthy turnover.

 Remember! If your application is turned down by a particular lender, it can have a negative impact on your business’ overall credit score. If you can, always check eligibility with a ‘soft search’ first.

Repayment terms for Merchant Cash Advances

All Merchant Cash Advances will have the same repayment model – a small percentage of your card transactions is taken as payment. There can be some small differences though, including interest rates, how long payments will be taken for, and when you can raise more finance.

Your business’ credit history

Your credit score is based on how well you’ve kept up with bills and payments on other credit accounts. It paints a picture of how reliable you are, and how much of your business’ monthly or annual income is already tied up in other repayments.

Do you need a guarantor or security?

Some lenders will ask for a guarantor, who will agree to support your Merchant Cash Advance application. They’ll be responsible for making repayments if your business can’t. Some lenders will ask for security instead, which could be a vehicle or valuable piece of equipment that belongs to your business.

We only get paid when you do

The Capify Merchant Cash Advance could help you grow your business and attract more customers. It’s designed for small businesses accepting credit and debit card payments, like retailers, pubs, bars and restaurants.

Your small business could raise £5,000 to over £250,000, depending on your average monthly turnover. The daily repayments are designed to work with your cash flow, not against it, making it a truly flexible finance option.

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