Business cash advance: what it is and how to get one
By Helm Editorial Team, Business Funding Specialists
- A business cash advance is a lump sum of funding repaid through a percentage of your daily card sales
- It is not a loan. There is no interest rate, no fixed repayments, and no compounding
- UK businesses can access between £10,000 and £500,000 based on their card sales volume
- Funding is typically available within 48 hours of approval
- Only a soft credit check is required, with no impact on your credit file
A business cash advance is one of the most straightforward ways for UK businesses to access working capital. You receive a lump sum of funding upfront and repay it automatically through a small percentage of your daily card transactions.
The term 'business cash advance' is used interchangeably with 'merchant cash advance' across the UK funding industry. They refer to the same product. This guide covers everything you need to know about how business cash advances work and whether one is right for your business.
How a business cash advance works
The concept is simple. A funding provider gives your business a lump sum of capital. In return, you agree to repay that amount, plus a fixed fee, through a percentage of your future card sales.
Each day, the agreed percentage is automatically deducted from your card transactions before the remainder settles into your business bank account. On busy days, you repay more. On quiet days, you repay less. On days with no card sales, you repay nothing.
The total cost is expressed as a factor rate, which is a multiplier applied to your advance amount. A £25,000 advance with a factor rate of 1.3 means you repay £32,500 in total. That cost is agreed before you accept and cannot increase.
Business cash advance vs business loan
While both options provide capital, the way they work is fundamentally different.
| Feature | Business Cash Advance | Business Loan |
|---|---|---|
| Repayment | Percentage of daily card sales | Fixed monthly instalments |
| Cost structure | Single fixed fee (factor rate) | Interest on outstanding balance |
| Speed | 48 hours | 2 to 8 weeks |
| Credit check | Soft check only | Hard check required |
| Security | Not required | Often required |
| Flexibility | Repayments adjust daily | Same payment every month |
| Paperwork | None | Extensive |
Who can get a business cash advance?
Business cash advances are available to UK businesses that meet the following criteria.
- Your business accepts card payments
- You have been trading for at least 6 months
- You process at least £10,000 per month in card sales
- Your business is based in the UK
How much can you get?
Most providers offer business cash advances from £10,000 to £500,000. The amount you can access is based on your average monthly card sales, typically up to 125% of your monthly card turnover.
A business processing £40,000 per month in card sales could access up to £50,000. A business processing £100,000 could access up to £125,000.
Once you have repaid 50% or more of your advance, you can apply for a top-up without going through a full new application.
What can you use a business cash advance for?
There are no restrictions on how you use the funds. Common uses among UK businesses include the following.
- Purchasing stock or materials ahead of busy periods
- Renovating or refurbishing your premises
- Investing in new equipment
- Hiring and training staff
- Running marketing campaigns
- Covering cash flow gaps during quieter months
- Expanding to new locations
How to apply for a business cash advance
The application process is designed to be as simple and fast as possible. With Helm, you can check your eligibility in about 60 seconds.
You provide your business name, how long you have been trading, and your average monthly card sales. Only a soft credit check is performed, so there is no impact on your credit file.
Most decisions are made within 24 hours. If approved, you receive a clear offer showing the advance amount, factor rate, and daily split percentage. Funds are typically in your bank account within 48 hours of acceptance.
Frequently asked questions
Is a business cash advance the same as a merchant cash advance?
Yes. The terms are used interchangeably. Both refer to a lump sum of funding repaid through a percentage of your daily card sales.
Do I need good credit for a business cash advance?
No. Business cash advance providers focus on your card sales volume rather than your credit score. Only a soft credit check is performed, which does not affect your credit file.
How fast can I get a business cash advance?
Most applications are decided within 24 hours and funded within 48 hours of approval. The application itself takes about 60 seconds.
What is the cost of a business cash advance?
The cost is expressed as a factor rate, typically between 1.2 and 1.5. This is multiplied by your advance amount to determine the total repayment. The cost is fixed and agreed upfront.