Business cash advance (revenue loan)

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u003cem data-rich-text-format-boundary=u0022trueu0022u003eThis newer type of u003c/emu003eu003ca href=u0022 loanu003c/emu003eu003c/au003eu003cemu003e allows you to ‘sell’ a portion of your company’s revenue in exchange for an advance of capital. So, instead of paying back a fixed amount each month, as you might do with a traditional loan, you pay the lender an agreed percentage of your monthly sales until the advance, including interest, is paid off in full.u003c/emu003eu003cbr data-rich-text-line-break=u0022trueu0022 /u003eu003cbr data-rich-text-line-break=u0022trueu0022 /u003eYou can borrow from £3,000 to £500,000. Term ranges from 3 months to 5 years. Typically costs 2-10%(depending on the product, lender and your business profile)u003cbr data-rich-text-line-break=u0022trueu0022 /u003eu003cbr data-rich-text-line-break=u0022trueu0022 /u003eA business cash advance is a type of lending that’s based on your future revenue. It comes in a few different forms, the most common of which is a u003ca href=u0022 cash advanceu003c/au003e. You’ll also hear it referred to as a revenue loan, a revenue loan or revenue-based financing.

The main purpose of is to ease cash flow against future forecasted income.u003cbr data-rich-text-line-break=u0022trueu0022 /u003eu003cbr data-rich-text-line-break=u0022trueu0022 /u003eA business cash advance may be useful if you have a seasonal business, because it means you can align repayments to your trading peaks and troughs – you can pay back more when sales are higher and less when sales are lower.u003cbr data-rich-text-line-break=u0022trueu0022 /u003eu003cbr data-rich-text-line-break=u0022trueu0022 /u003eIt could also be a good option if you find you’re not eligible for a bank loan, but you don’t want to part with company equity. Business cash advances are more expensive than bank loans. Perhaps the most popular type of business cash advance is the merchant cash advance. You might also want to look at supply chain finance.

u003culu003ern tu003cliu003eFast access to funds.u003c/liu003ern tu003cliu003eNo fixed monthly instalmentsu003c/liu003ern tu003cliu003eNo collateral requiredu003c/liu003ern tu003cliu003eThe principal amount is fixedu003c/liu003ern tu003cliu003eEven with poor credit you may find borrowing possibleu003c/liu003ernu003c/ulu003ern!      Not a long-term borrowing solution-expensive compared to other optionsu003cbr data-rich-text-line-break=u0022trueu0022 /u003e!      Regular deductions (could be daily!) from your credit or future revenue could seriously hamper growthu003cbr data-rich-text-line-break=u0022trueu0022 /u003e!      Not regulated by any UK regulator so both borrower and lender are exposedu003cbr data-rich-text-line-break=u0022trueu0022 /u003e!      As you are borrowing against future revenue, you lose autonomy in your business. You may find that are no longer dictating your business short term operational hours until the loan is paid off!

Small to medium sized businesses who are unable to access more traditional forms of capital (minimum revenue required is over £50,000).

You might also want to look at u003ca href=u0022 financeu003c/au003e (i.e. supply chain finance).

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