Rate Indexes / Merchant Cash Advance
UK Merchant Cash Advance Cost Index 2026
Merchant cash advances (MCAs) are not priced as APRs. Instead, lenders apply a factor rate to the amount advanced. If you borrow £10,000 at a factor rate of 1.3, you repay £13,000 in total - regardless of how quickly or slowly it is repaid. Repayments are taken as a percentage of your card terminal takings (typically 10-25%), so they flex with your revenue. This index shows typical factor rates and retrieval percentages from Spark Finance's MCA lender panel.
Key Facts - Merchant Cash Advance
1.1 to 1.5
£2,500 to £500,000
1x to 2x monthly card takings
10% to 25% of daily card sales
3 months (some 6 months)
Typically £5,000+ per month
24 to 72 hours after approval
Indicative Rate Ranges
Rates are indicative only. Your actual rate depends on credit profile, trading history, loan size, security offered, and the lender's current appetite. These ranges do not constitute a quote or guarantee.
| Category | Indicative Rate | Notes |
|---|---|---|
| Prime (strong card volumes, 2+ years, clean credit) | Factor rate 1.10 to 1.20 | Total repayment: £11,000 to £12,000 per £10,000 borrowed |
| Standard (established business, moderate risk) | Factor rate 1.20 to 1.35 | Most common range for qualifying hospitality and retail businesses |
| Higher risk (shorter history or concentrated risk) | Factor rate 1.35 to 1.50 | Total repayment: £13,500 to £15,000 per £10,000 borrowed |
Eligibility Factors
- Card processing history - minimum 3 months; 6+ months preferred for better rates
- Monthly card takings - typically minimum £5,000 per month
- Business type - retail, hospitality, and service businesses with card terminals
- No minimum trading period for business generally; card history is primary driver
- Adverse credit - MCAs are more accessible than loans for adverse credit businesses
- Not suitable for businesses that do not accept card payments
- Existing MCA obligations - may affect how much additional funding is available
Lender Types
- Specialist MCA lenders (Liberis, YouLend, Capify)
- Point-of-sale finance providers
- Fintech revenue-based finance platforms
- Integrated terminal-linked MCA providers
Frequently Asked Questions
What is a typical merchant cash advance factor rate in the UK?
UK merchant cash advance factor rates typically range from 1.1 to 1.5. A factor rate of 1.3 means you repay £1.30 for every £1 advanced - so £30,000 total on a £23,077 advance. Factor rates are not equivalent to APRs. Because MCAs are repaid as a percentage of card sales, the effective cost in APR terms is higher when repayment is quick and lower when repayment is slow. Compare total repayment cost, not just the factor rate.
Is a merchant cash advance better than a business loan?
It depends on your business. MCAs suit businesses with high card volumes that need quick funding and value the flexibility of revenue-linked repayments. They are typically more expensive than bank loans but faster and more accessible. Business loans offer fixed repayments that are easier to budget for and are usually cheaper for businesses that qualify. Many businesses use MCAs for short-term needs and switch to loans as they establish a stronger credit profile.
What percentage of card sales is taken for repayment?
Most UK MCA lenders take between 10% and 25% of daily card sales as the retrieval rate. A lower retrieval rate means slower repayment (which can increase effective cost if the factor rate stays constant). A higher retrieval rate means faster repayment. The retrieval rate is agreed at the start and typically does not change, though some lenders offer adjustment mechanisms for seasonal businesses.
Methodology
MCA factor rate data is compiled from offers received through the Spark Finance broker panel. Factor rate ranges represent the 10th and 90th percentile of initial offers. Note that because repayment is revenue-linked, effective APR varies depending on how quickly the advance is repaid - the faster repayment, the higher the effective APR equivalent. Data updated quarterly.
Source notes
- Spark Finance broker panel - 250+ UK specialist lenders
- Applications processed June 2024 to June 2026
- Factor rates are not APRs; direct comparison with loan APRs is not straightforward
- Spark Finance is a credit broker, not a lender
- FCA Authorised, FRN 958123