Merchant cash advance for hospitality businesses: pubs, bars, and hotels
By Helm, Business Funding Specialists
- Hospitality businesses are well suited to merchant cash advances due to high card transaction volumes
- Common uses include refurbishments, new equipment, stock purchases, and seasonal staffing
- Repayments flex with your daily trading, so quiet midweek periods cost less
- No need to put your property or personal assets on the line
The hospitality sector runs on card payments. Whether you operate a busy city bar, a country pub, a boutique hotel, or a chain of cafes, the majority of your revenue flows through your card terminal every day.
This makes hospitality businesses particularly well suited to merchant cash advances. The product was essentially designed for businesses like yours, where card transactions provide a reliable and verifiable revenue stream.
Why hospitality and MCAs are a natural fit
Several characteristics of hospitality businesses align perfectly with how a merchant cash advance works.
- High card transaction volumes provide a strong basis for funding
- Revenue fluctuates daily and seasonally, which suits flexible repayments
- Hospitality businesses often need quick access to capital for time-sensitive opportunities
- Traditional bank loans can be slow and require extensive paperwork that busy operators cannot spare time for
Common uses in the hospitality sector
Hospitality businesses use merchant cash advances for a wide range of purposes, almost all focused on maintaining or improving the guest experience.
- Pub and bar refurbishments, from new interiors to outdoor seating areas
- Kitchen equipment upgrades, including commercial ovens, fridges, and extraction systems
- Hotel room renovations and new amenities
- Seasonal stock purchases ahead of busy periods
- Hiring temporary staff for summer, Christmas, or event seasons
- Marketing campaigns to promote new menus, events, or reopenings
- Technology upgrades including EPOS systems and booking platforms
- Emergency repairs to boilers, roofing, or essential infrastructure
How repayments work in hospitality
Hospitality revenue tends to follow predictable weekly and seasonal patterns. A busy Friday and Saturday might see card takings three or four times higher than a quiet Tuesday. With a merchant cash advance, your repayments reflect this pattern exactly.
On a Saturday when you take £3,000 through the card terminal, your repayment might be £300 (at 10%). On a Tuesday when you take £500, the repayment drops to just £50. This natural flexibility means you are never under pressure on quieter days.
| Day | Card revenue | Repayment (10%) | You keep |
|---|---|---|---|
| Monday | £600 | £60 | £540 |
| Wednesday | £800 | £80 | £720 |
| Friday | £2,500 | £250 | £2,250 |
| Saturday | £3,200 | £320 | £2,880 |
| Sunday | £1,800 | £180 | £1,620 |
Case study: pub refurbishment
A gastropub in the Midlands needed £25,000 to refurbish its beer garden ahead of summer. The bank offered a loan but the application process would have taken six weeks, missing the start of the season.
Through a merchant cash advance, the pub secured funding within 48 hours with a factor rate of 1.28, meaning a total repayment of £32,000. With a 10% repayment rate on strong summer trading of around £15,000 per week in card sales, the advance was cleared within five months. The refurbished beer garden increased summer revenue by over 40%.
Eligibility for hospitality businesses
Most hospitality businesses will meet the eligibility criteria for a merchant cash advance.
- Processing at least £10,000 per month in card transactions
- Trading for a minimum of three to six months
- Operating from a UK registered business
- Using a compatible card terminal or payment provider
Frequently asked questions
Can new pubs or restaurants get a merchant cash advance?
Most providers require at least three to six months of card transaction history. If you are a new business, you may need to wait until you have built up enough trading data.
Do I need to own the premises?
No. A merchant cash advance is not secured against property. Whether you own or lease your premises, you can apply based on your card transaction volume.
Can I use the funds for anything?
Yes. There are no restrictions on how you use the funds. Whether it is a refurbishment, new equipment, staffing costs, or stock, the money is yours to spend as you see fit.
What if my hospitality business is seasonal?
Seasonal hospitality businesses are well suited to merchant cash advances because repayments slow down during quiet periods. Providers assess your application based on your peak-season trading data.