Business Cash Advance Hub

What Is A Business Cash Advance Loan?

Estimated Read Time: 3 Minutes

A Business Cash Advance loan is a popular type of lending that is accessed by businesses in need of cash. Whilst it is often referred to as Business Cash Advance (BCA), it may also be deemed a merchant cash advance, a revenue loan or a turnover loan. Regardless of its name, the product itself is exactly the same.

A Business Cash Advance is the perfect solution for businesses that need a cash flow boost – providing it takes card payments. The cash can also be used for any purpose relating to your business and the amount is calculated on the card takings of your business. 

This type of loan is hugely beneficial to businesses, but this form of lending is actually very different from a business loan. 

A business loan is essentially a sum of money that is outstanding, agreed upon beforehand that includes the repayment of the money borrowed, with added interest. The terminology used with a business loan will always incorporate the interest rate, an agreed loan amount and of course, the term in which that will be paid back over.

With a Business Cash Advance, the approach is very different. The product itself is based on the future sales of a business, and these future sales are sold to the financial lender at a discounted rate.

When the BCA product first hit the lending market, it transformed the standard method of lending and borrowing for businesses. Traditionally, typical business loans work in the same way – once it has been approved, a business will receive a lump sum and the interest will be paid until the amount borrowed has been paid back. Therefore, the cost of accessing finance varies massively depending on the loan term.

This simple principle is how the majority of lending works, but with a Business Cash Advance, the total cost of finance is agreed on at the start of the lending process.

So, that also means that rather than paying the same amount back every single month, your business has a fixed financial goalpost that it needs to reach.

Business Cash Advance is a hugely viable type of borrowing because it allows business to pay back a higher amount when revenue is high, and a lot less when things have slowed down. For SMEs that rely predominantly on seasonality, BCA is the ideal funding option.

This type of lending is hugely popular as it gives more flexibility than most business loans as there are no rigid monthly repayments. Instead, the repayment is tailored to your business and what it can afford, meaning you pay back what is owed at a comfortable pace, with no fixed borrowing term in place whatsoever.

There is also a lot of scope with the Nucleus Business Cash Advance – your business can borrow up to 125% of your monthly card volumes and this ranges from £5,000 to £150,000 and above. 

Our Business Cash Advance is viable for SMEs needing access to working capital quickly, as we make fast, same day decisions with a full packaged application. 

It also comes as a relief to business owners to discover that our Business Cash Advance application is extremely simple – you can literally apply in minutes as the hassle-free repayments are calculated automatically. 

When businesses commit themselves to additional funding, it can be a daunting step to take. Whilst the team at Nucleus always encourage businesses to access funding before the need for extra money arises, we understand that there is still a fair amount of taboo around borrowing money generally.

This is why we ensure that all business owners using Business Cash Advance have a dedicated account manager, as it is important to have a human side to the process of borrowing.   

Utilising the various types of funding out there is often what separates businesses that are thriving from those that are struggling to keep their head above water. Business Cash Advance is a great solution for SMEs that require a cash injection, but if your business does not take card payments, there are other products out there that work on the same principle of selling something to a financial lender at a fair discount.

Invoice finance is another commonly used type of funding that allows businesses to access cash that is otherwise tied up in unpaid invoices. For those businesses operating in industries that tend to have much longer payment periods, invoice finance provides a way for them to access the working capital required to continue with essential day-to-day operations.

For more information on the types of funding available from Nucleus Commercial Finance, get in touch with our team to ensure you find finance that works perfectly for your business.