The Client
The client owns a bar and restaurant, trading as a limited company for the past eight months, with a regular monthly turnover of between £40,000 and £50,000.
The Scenario
The client was keen to expand and improve the premises, particularly the outside dining area. Most lenders require access to the latest filed accounts, typically meaning a minimum trading history of one year, though this can vary even where turnover is healthy.
The Solution
The client understood his options would be limited because of his relatively short trading history. Revenue-based loans, in the form of a merchant cash advance, lend against a company’s debit or credit card revenue, including revenue processed through third parties such as Just Eat and Deliveroo. The client was offered a loan of £39,000 within a few days of applying.
Summary
Rather than fixed monthly, weekly or daily repayments, the lender takes a fixed percentage of card revenue until the loan is repaid. Because the repayment shapes itself around business revenue, it also drops proportionately during slower trading periods.
Merchant cash advances are unsecured, flexible, and require very little paperwork during the application process. Some lenders will consider applications from companies that have only been trading for six months.
Funding is typically quick, and many lenders will offer a top-up or renewal facility once a company has demonstrated a good track record of keeping up with repayments.
Frequently Asked Questions
What is a merchant cash advance?
It is a form of business funding repaid as a fixed percentage of a company’s card revenue, rather than fixed monthly instalments.
Because repayments are tied to revenue, they naturally reduce during quieter trading periods and increase again as revenue picks up.
Can I get a merchant cash advance with a short trading history?
Yes, some lenders will consider applications from companies with as little as six months of trading history.
This is often shorter than the minimum required for standard business loans, making it a genuine option for newer businesses with strong revenue.
Is a merchant cash advance secured against business assets?
No, merchant cash advances are generally unsecured.
No property or other business assets need to be put up as security, which is part of why the application process tends to be quicker and requires less paperwork.
Does a merchant cash advance include revenue from third-party platforms like Just Eat or Deliveroo?
Yes, lenders can often take third-party platform revenue into account alongside direct card revenue.
This can be particularly useful for hospitality businesses where a meaningful share of turnover comes through delivery platforms rather than in-person card payments.
Commercial Finance Network is a whole-of-market FCA authorised commercial finance broker working with property investors, developers, and businesses across the UK and internationally. We work across the full specialist business finance panel and will tell you which lenders will engage with your deal, what terms to expect, and how to structure the application before anything is submitted.
Commercial Finance Network is directly authorised and regulated by the Financial Conduct Authority. Merchant cash advances and other unsecured business lending facilities are not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Business Loans – flexible unsecured and secured lending for UK businesses
- Invoice Finance – borrow against unpaid invoices to improve business cash flow
- Commercial Finance – whole-of-market funding for businesses and property investors
- Commercial Loan Calculator – estimate monthly costs and repayments on your commercial loan
