Business financing
Business Financing in the UK
Businesses in the UK face a growing number of challenges, but accessing fast working capital need not be one of them. Small businesses of all types can quickly and easily apply for and receive cash advances – an alternative form of financing that is rapidly growing in popularity.
✓ £10k – £1m advances
✓ Funds same day or within 24 hours
✓ No interest – one fixed fee
69%
of small and medium companies in the UK apply for financing for cash flow reasons alone.
What is a cash advance?
A form of short term, unsecured borrowing – an advance on future sales proceeds, paid back via those future sales.
See how it worksFinancing by industry
Business financing for your industry
Cash advances are especially well-suited to transaction-heavy retail and hospitality sectors. Explore what business financing can do for your industry:
Retail Shops
Stock, equipment, refurbishment and cash flow – with repayments that match your card sales.
Explore →Pubs and Restaurants
88% of customers pay by card when eating out – ideal for flexible, card-based repayments.
Explore →Hotels and Lodgings
From refurbishment to payroll and energy – with repayments that flex with seasonal income.
Explore →Auto Shops
Garages, MOT and body shops – covering parts, equipment and rising operating costs.
Explore →Transportation Companies
Haulage, logistics and couriers – for fuel, vehicles, maintenance and working capital.
Explore →Don’t see your industry?
Almost any type of UK business can get a cash advance. The only crucial criteria is that you will be paid for goods and/or services via card transactions.
Apply nowHow it works
What is a cash advance?
A cash advance – also known as a business cash advance, a merchant cash advance, or MCA – is a form of short term, unsecured borrowing for businesses. Technically, a cash advance is not a loan; rather it is an advance on future sales proceeds, which must be paid back via those future sales.
With a traditional loan, a business receives a lump sum and then repays that sum via pre-set, regular repayments over a defined period of time. However with a cash advance, repayment happens with every debit and credit card sale. Each card sale has a fixed percentage deducted from it, directly through the point-of-sale (PoS) system, until the entire borrowed sum has been paid back.
The greater your volume of sales, the more quickly the debt will be cleared.
Why businesses choose cash advances
- Flexible repayments that match your incoming cash flow
- No set rate of interest – it doesn’t cost you more if it takes longer to pay back
- No repayments to calculate or manage – it’s all done via your PoS system
- Unsecured – no collateral required
Step by step
Cash advances, step by step
Step 1
Choose a cash advance provider
Step 2
Gather the documentation necessary to apply for a cash advance
Step 3
Apply for funding; if approved, review the funding agreement before signing it
Step 4
Receive funds
Step 5
Repay your cash advance bit by bit via your incoming sales, until the entire amount is repaid
Step 6
Repeat as often as needed
Key terminology
How much does a cash advance cost?
With an interest-bearing loan, the longer you take to repay, the more you’ll pay in interest. But the factor rate on a cash advance is calculated at the start of the financing agreement, and it does not change according to how long it takes to repay the funds.
Advance amount
The amount of money a lender is willing to lend you – usually based on your expected revenue from future sales.
Holdback
The percentage held back from each debit or credit card transaction to repay the advance. Holdbacks automatically happen until the advance is paid back in full.
Repayment amount
The total amount you need to repay the lender – effectively the sum of all of the holdback amounts over the life of the agreement.
Factor rate
Cash advances do not have interest rates; instead they have a fixed fee. A fee of £0.20 for every £1.00 borrowed equals a factor rate of 1.2.
Cash advance calculator
Cost of cash advance = amount borrowed × factor rate
Example: borrow £10,000 at a factor rate of 1.20 and you repay £10,000 × 1.2 = £12,000.
Use it your way
What can a cash advance be used for?
One of the major benefits of a cash advance is that there are no restrictions on what the funds can be used for. Costs frequently covered by cash advance financing include:
Apply nowInventory costs
Employee pay
Bill payments
Equipment purchase or repair
Rent
Premises repair or renovation
Marketing costs
Expansion costs
Day-to-day cash flow
Paying VAT
Is it right for you?
Pros and cons of cash advances
Pros
- Provide quick access to cash
- Easier qualification criteria compared to business loans
- No collateral required
- Repayments match your incoming revenues
- Repayments taken at point of sale, so no messy calculations or repayments to manage
- No hidden fees
- Cost of funding is set at the start of the agreement, and cannot change
- Scalable with business needs and size
- Credit history not a factor
Cons
- Not suitable for cash-only or non-sales based businesses
- More expensive than long term or secured forms of borrowing
- Negative impact on cash flow may strain operations
- Some point-of-sale systems may not be compatible
- Borrowing amounts smaller than with secured or long term loans
- Repaying the advance early does not save on costs
Compatible payment systems
Is your card machine compatible?
While most point-of-sale systems are compatible with cash advance repayment mechanisms, not all are, so you should check yours before borrowing. Currently, all of the following are compatible:
Adyen
AIB (Allied Irish Banks)
Amazon Pay
Barclaycard
Dojo
Elavon
EVO Payments
First Data (Fiserv)
Global Payments
iZettle
Judopay
Klarna
Lloyds Cardnet
Payment Sense
Payoneer
PayPal
SagePay
Shopify Payments
Square
Stripe
SumUp
Takepayments
Tyl by NatWest
Valitor
Worldpay
Run an ecommerce business? You should be fine as long as you use a standard online payment gateway, such as Stripe. A cash advance won’t suit cash-only businesses.
Talk to Swiftfund today
We’re confident that the cash advances we offer at Swiftfund are competitive, and that our long history of satisfied customers speaks for itself.
How quickly can I get a cash advance for my business?
With Swiftfund, you can usually expect an offer within around 2 hours of applying. Once we have your bank statements and ID, we approve within the hour and can fund within the hour after that – so your funds are usually with you the same day, and within 24 hours. The only thing that holds funding up is missing paperwork.
Does my credit score affect my cash advance?
Cash advances do not rely on a good credit score. Lending decisions are based much more heavily on expected revenue than on credit, so new businesses without a credit rating, or businesses with bad credit, can still access this type of funding. And as the advance is unsecured, businesses without assets can access them too.
Can my business get a cash advance if it has been rejected for other types of financing?
Yes. Being rejected for past financing does not impact your ability to get a cash advance for your business.
Are there fixed repayment options on a cash advance?
No. Repayments on a cash advance happen on a transaction-by-transaction basis, via debit and credit card sales.
Do I have to calculate my cash advance repayments?
No. Your cash advance repayments are automatically calculated and deducted from each debit or credit card sale, without you having to do anything.
Can I repay a cash advance early?
Yes, and there are no penalties for early repayment. However, there are no benefits to early repayment either, as the total cost of the funding is set at the start of the agreement.
Do I need a business bank account to get a cash advance?
Yes; this is so you can receive the cash advance, and facilitate repayments.
Ready to fund your business?
We provide advances from £10,000 to £1,000,000. All we require is a quick application, 6 months bank statements and a copy of your I.D.