Merchant Cash
Advance
Flexible funding with repayments linked to your revenue
Revenue-based funding that moves with your business. Understand the structure, the cost and whether it is the right fit before you commit.
- Repayment linked to daily card or turnover revenue
- No fixed monthly instalment structure
- Multiple funders assessed independently
- Structured review before any recommendation
Revenue-Based
Repayment structure
Factor Rate
Pricing model
No Fixed Term
Flexible duration
Independent
Funder comparison
Merchant Cash Advance Calculator
Estimate your total repayment, funding cost and how long repayment may take based on your revenue.
Your Details
Typical advances range from R20,000 to R2,000,000
Used to estimate your repayment timeline
Advance Summary
Based on 10% holdback on avg monthly revenue of R200,000.
Apply NowNote: All figures are indicative estimates only. Actual factor rates and holdback percentages are agreed with the funder based on your business profile.
What is a Merchant Cash Advance?
A merchant cash advance (MCA) provides a business with upfront capital in exchange for a percentage of future card sales or business turnover. Instead of fixed monthly instalments, repayment adjusts automatically with your revenue. When sales are stronger, repayment increases. When sales slow, repayment decreases. This structure makes merchant cash advances fundamentally different from traditional business loans and important to understand before committing.
- Repayment adjusts with your revenue, not fixed instalments
- Total repayment is agreed upfront using a factor rate
- Often used by businesses with consistent card or POS sales
- Not a traditional loan and does not use interest rates
Not sure if a merchant cash advance is right for your business?
Speak to a specialist who can assess your options and guide you to the most suitable product.
How does a merchant cash advance differ to other products?
| Funding Type | Repayment Structure | Pricing | Flexibility |
|---|---|---|---|
| Merchant Cash Advance | Percentage of daily revenue | Factor rate on advance | Repayment adjusts with sales |
| Term Loan | Fixed instalments over set period | Interest rate | Predictable repayment schedule |
| Overdraft | Draw and repay as needed | Interest on balance used | Flexible access to capital |
| Revolving Credit | Structured draw and repay | Interest on utilised amount | Reusable credit limit |
| Invoice Finance | Repaid when customer pays | Discount fee on invoice value | Flexible, tied to invoicing |
| Asset Finance | Fixed instalments over asset life | Interest rate on asset value | Asset-backed, structured |
How Merchant Cash Advance Repayment Works
Repayment is linked to your revenue rather than fixed monthly instalments.
Daily Revenue Holdback
When sales increase you repay faster. When revenue slows your repayment reduces. The total repayment amount remains fixed from the start.
Factor Rate Pricing
Merchant cash advances use a factor rate instead of an interest rate. For example, a factor rate of 1.30 on R100,000 means you repay R130,000 in total, regardless of how quickly repayment occurs.
Estimated Repayment Term
Funders estimate how long repayment will take based on your average monthly revenue and holdback percentage. If revenue grows the advance is repaid sooner. If revenue slows the repayment period may extend.
Is a Merchant Cash Advance Right for Your Business?
A merchant cash advance can be a useful funding option for some businesses, but not all. Suitability depends on your revenue structure, existing funding obligations and the purpose of the capital. Understanding both the advantages and risks is important before committing.
When It May Be Suitable
Contextual fitConsistent card machine or POS turnover
Businesses with predictable daily card sales can absorb revenue-based deductions without disrupting operations.
Seasonal working capital requirements
Suitable where capital is needed ahead of a high-revenue period, with repayment naturally accelerated by increased turnover.
Variable revenue structures
Businesses that cannot commit to fixed monthly instalments may find revenue-linked repayment more manageable.
Short-term working capital gaps
Where there is a clear recovery horizon and the capital need is specific, an MCA can bridge the gap effectively.
Risks and Considerations
Understand before committingHigher effective cost of capital
Factor rates often translate to a higher effective cost of capital compared to traditional term loans.
Ongoing margin pressure
Daily or weekly deductions reduce gross margin continuously for the duration of the agreement.
Stacking risk
Taking multiple merchant cash advances simultaneously significantly increases financial strain and repayment obligations.
May restrict funding access
Active MCA agreements may limit your ability to access additional funding from other lenders while the advance is outstanding.
Merchant Cash Advance Rates in South Africa
Merchant cash advance pricing is not regulated or standardised in South Africa. Understanding how advances are priced can help you compare options and assess whether the structure suits your business.
How pricing works
Merchant cash advance rates in South Africa are not standardised. Most MCAs are priced using a factor rate, which sets the total repayment upfront based on your business profile and revenue stability.
Total cost depends on the advance amount and your actual trading performance. Strong, consistent card or turnover revenue typically leads to more competitive terms than variable or declining turnover.
If you prefer fixed monthly instalments, a term loan may be more suitable, and if you need flexible access without forced utilisation a revolving credit facility may be a better fit.
What affects pricing?
- Risk profile and trading history
- Stability of card sales or turnover
- Average monthly revenue and seasonality
- Industry dynamics and customer concentration
- Funder assessment criteria
Our Approach to Merchant Cash Advance Funding
We start with a structured review rather than a product recommendation. Our role is to help you understand whether a merchant cash advance is the right funding structure for your business before approaching lenders.
Business Funding Review
We begin every engagement with a Business Funding Review. This helps us understand your current funding position, existing obligations and whether a merchant cash advance aligns with your business objectives.
Independent Assessment
We assess relevant funding options across multiple funders where appropriate. Sometimes the outcome of a review is that no change is recommended. That is a valid and valuable outcome.
Long Term Funding Structure
We prioritise your long term funding structure. A merchant cash advance may solve a short term working capital gap but could create structural pressure if used incorrectly. We assess both before making any recommendation.
Frequently Asked Questions
Common questions about merchant cash advance funding in South Africa.
A merchant cash advance is a form of revenue-based funding where a funder provides a lump sum of capital upfront. Repayment is collected as a percentage of your daily card sales or business turnover until the agreed total repayment amount has been recovered. It is not a loan in the traditional sense because there is no fixed monthly instalment or defined repayment term.
No. A merchant cash advance is technically a purchase of future receivables, not a loan. This distinction matters because the pricing structure, repayment mechanics, and regulatory treatment differ from a conventional business loan. The total cost is expressed as a factor rate rather than an interest rate, and repayment fluctuates with your daily revenue rather than following a fixed schedule.
Repayment is automated. A fixed percentage of your daily card machine settlements or bank turnover is deducted and directed to the funder. This continues until the total repayment amount has been collected. On high-revenue days you repay more. On slower days you repay less. There is no fixed term, but funders typically provide an estimated repayment period based on your average monthly turnover.
Pricing is expressed as a factor rate rather than an interest rate. A factor rate of 1.25 on a R100,000 advance means you repay R125,000 in total. Actual rates vary depending on your risk profile, turnover stability, industry, and the funder. BusinessFinancing.co.za does not publish rate ranges because they are determined by funders after assessment. We work with multiple funders and can provide context on pricing after a funding review.
It can. Funders evaluating your business for future financing will assess your current obligations. If your daily deductions are reducing available cashflow, this may affect affordability assessments. Stacking multiple merchant cash advances simultaneously carries a higher risk of restricting future funding access. This is one reason why structure and timing matter. A Business Funding Review helps assess the downstream impact before you commit.
Start with a Strategic Funding Conversation
If you are unsure whether a merchant cash advance is the right funding structure, comparing offers from different funders, or concerned about the repayment impact on cashflow, start with a structured funding conversation.
No pressure. No obligation. Just clarity.
Good funding decisions compound over time. Poor ones do too. Structure matters.