Merchant cash advance · Cash flow finance
Merchant cash advance for Cash flow finance
Cash flow finance is short-term business funding that covers the gap between paying costs and receiving revenue, used for wages, suppliers and tax rather than for buying assets.
How a merchant cash advance works for Cash flow finance
A merchant cash advance repays as a fixed percentage of daily card takings, so the repayment falls automatically when trade is quiet. For a business with genuine daily revenue variability that flexibility has real value. The cost does not: these are priced as a factor rate over a short period, and the annualised equivalent is usually well above every other option here. We will always show you that comparison. It suits a short, sharp need in a card-based business, and little else.
The cash-flow pattern we plan around
Costs falling due weekly or fortnightly against revenue arriving on 30–60 day terms, with the gap widening as the business grows.
What cash flow finance typically fund
- Wages and superannuation between invoice payments
- Supplier and trade accounts falling due
- BAS, PAYG and quarterly tax obligations
- Bridging a seasonal trough
Merchant cash advance for Cash flow finance: the numbers
| Typical amounts | $5,000 – $300,000 |
|---|---|
| Term | 3–18 months |
| Indicative rates | 25% – 60% p.a. |
| Repayments | A set percentage of daily card settlements |
| Speed | 24–48 hours |
| Documents cash flow finance usually need | ABN, GST registration and 6–12 months of bank statements · Aged receivables and payables reports · Most recent BAS lodgements |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
Key terms
Cash flow finance
Cash flow finance is short-term lending used to cover operating costs during the gap between outgoings and incoming revenue, typically repaid within twelve months and not used to purchase assets.
Structural versus one-off gap
A structural gap recurs every trading cycle because of payment terms, and suits a revolving facility; a one-off gap arises from a single event and suits a term loan with a defined end date.
What is a merchant cash advance?
A merchant cash advance is a lump-sum payment to a business in exchange for an agreed share of its future card sales. Repayment happens automatically as a percentage of each day’s takings until a fixed total, set by a factor rate, has been repaid.
What is a factor rate?
A factor rate is a multiplier applied to the amount advanced to determine the total repayable — a 1.25 factor on $50,000 means repaying $62,500. It is not an interest rate, and because the balance reduces over the term, the equivalent annual percentage rate is substantially higher.
Is a merchant cash advance regulated credit?
Merchant cash advances provided for business purposes are not consumer credit under the National Credit Code. Many providers are signatories to the Australian Finance Industry Association’s Online Small Business Lenders Code, which requires disclosure of an annualised cost figure.