business cash advances UK

Why Business Cash Advances in the UK may work for you

If you need a short-term capital boost, business cash advances for the UK may well be the answer you’re looking for. Here’s why. Every now and again a time comes when your business needs an injection of capital. It may be because you want to invest and drive the business forward. Sadly it may be something less pleasant such as a cashflow crisis. Either way, you may find yourself in need of a capital boost to ensure your business moves forward, but where can you find one?

With banks increasingly reluctant to lend, business cash advances in the UK may be the perfect solution.

How do business cash advances work in the UK

Businesses face a number of pressures. An increasingly uncertain economic climate means many are operating on tight profit margins. Furthermore, banks continue to be reluctant to lend which means many firms may find themselves unable to access capital.

That could be an enormous problem if you need money in the short term. The solution could lie in alternative forms of finance such as a business cash advance.

Unlike bank loans, a bad credit score will not be a huge problem for the simple reason that this is not a loan. It is, as the name implies, an advance made against the future performance of your business. You will receive a lump sum. In return you will pay the provider a proportion of your future credit or debit card sales until the money is repaid.

The amount you can receive will depend on your previous sales. The best business cash advances provider in the UK will use this data to calculate how much they would expect you to earn for the duration of the contract. You will then pay back a percentage of that revenue and an agreed fee.

Why use a business cash advance

The main attraction for businesses is the speed with which you can arrange a cash advance. In some cases, you may be able to get the cash you need within a few hours. In comparison it could take days or weeks to get a decision on a bank loan. There is less paperwork to manage, which also reduces the time you spend on administration and frees you up to work on growing your business.

It is also more accessible. Business cash advances typically have high approval ratings. A bad credit history, for example, will not be as much of a barrier as it would be for securing a loan. It is also more flexible. Because payments are structured as a percentage of your sales, you only pay back as much as you can afford. If business is not as good as you expect, for some reason, your monthly repayments will be lower.   

How to use it

You may use the cash advance in any way you wish. For some this is a chance to solve a short-term cash-flow crisis or cope with a large bill which needs to be paid. If money is tight, this could help you meet your obligations, manage your payroll and keep going until your money comes in.

Equally, some businesses may use it to invest in their future. The world of business is evolving rapidly and becoming more competitive. In many cases, you may face an unenviable choice between moving forward or facing oblivion.

For example, the rise of digital technology offers a host of opportunities to improve business performance. If you don’t adopt this technology, your competitors will, in which case they will be able to deliver services more quickly and cheaply. In the long run that could put the health of your business in jeopardy.

A lump sum will give you the capital you need to make this investment and ensure you keep pace with the competition. Cash advance loans are offered though a business credit card machine is relatively new type of business borrowing in the UK. Alternative finance has seen an explosion over the last five years.

Choosing the right merchant cash advances in the UK

When used in the right way, merchant cash advances can have enormous benefits for UK businesses. That said, it may not be for everyone. The contract will only be made on your revenue from credit or debit cards. It would be a particularly good idea if you’re a retailer taking card payments over the till. On the other hand, if you are paid in a different way, such as a bank transfer, this may not be the best option for you.

The fees can be quite high so it’s important to shop around. Make sure you understand all the costs you will be charged so you have a clear idea of how expensive the deal will be. Browse the market and spend time finding a provider offering the best terms for you and your situation. These type of cash advance products work perfect for merchant businesses in the UK that have a high number of transactions through their PDQ Card Terminal. This is due to the spread and risk shown towards the lender. Low amounts and lots of transacts are the perfect fit.

Merchant Advances also come with different rates and terms so its important to find the right deal for your business. Term time in the industry is usually 12 – 18 months ( Term = Length of repayment time ).

Example Costs : Merchant Cash Advance for a UK Based business. 

Funding amount: £9,000
Repayment amount: £11,700
Factor rate: 1.3

As with anything, a merchant cash advance UK should be approached in the right way. You should weigh the costs against the benefits, research the market and make sure you have a clear plan for how you intend to use the money. If you have all that in place, this could be a crucial tool for the future of your business.

How do we get a cash advance for business

If you feel that a cash advance for business may help support your UK based business. It is so simple to raise business finance working capital with the cash advance. To apply for unsecured business funding of up-to £200,000 in a few days. Complete the online enquiry form to get started.