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Credit Corp vs a merchant cash advance
A merchant cash advance repays automatically as a share of your card sales, which suits card-heavy retail and hospitality businesses — but its factor-rate pricing is hard to compare directly to an APR, and repayment can slow your cashflow when trade is quiet. This page sets a Credit Corp loan and a merchant cash advance side by side honestly.
Credit Corp vs a merchant cash advance
Being straight with you: a merchant cash advance can suit a card-sales-heavy business well, because repayment automatically flexes down in a quiet month. Its factor-rate pricing means the actual cost depends entirely on how fast you repay, which makes it hard to compare directly to a fixed-term loan. Credit Corp earns its place when you want a known, capped total cost agreed upfront rather than one that depends on your future card sales.
At a glance
| What matters | Credit Corp | Merchant cash advance |
|---|---|---|
| Who it is for | Any eligible UK limited company or LLP. | Card-sales-heavy businesses, typically retail and hospitality, with consistent card takings. |
| Typical amount | £50–£500 per advance. | Usually based on a multiple of average monthly card takings — can range from a few thousand upwards. |
| Repayment structure | Fixed weekly or fortnightly instalments over a fixed 14–84-day term. | A fixed percentage of daily card takings (a "holdback"), commonly 10%–25%, until the advance is repaid. |
| Cost structure | 0.25% per day simple interest + £5 fee, capped at 100% of principal — a true, comparable rate. | A factor rate, typically 1.1–1.5x (commonly 1.15–1.35x) — e.g. a 1.2 factor rate on £7,000 means £8,400 repayable. |
| Comparability to APR | Directly comparable — interest rate and total cost cap are both explicit. | Not directly comparable — the same factor rate implies a very different effective APR depending on how quickly card sales repay it. |
| Personal guarantee | No personal guarantee. We lend to the company. | Varies by provider; some require a personal guarantee. |
| Cost predictability | Known and capped from the outset, regardless of trading. | Total cost is fixed by the factor rate, but the repayment period — and so the effective annualised cost — varies with your card sales. |
| Suits a quiet trading period | Fixed instalments continue regardless of how trade is going. | Repayment automatically slows in a quiet period, since it is a share of takings, not a fixed amount. |
Indicative cost per £100 borrowed, per 30 days
Indicative cost per £100 borrowed, per 30 days (illustrative — not a quote)
How each one is priced
| Option | How it is priced | Typical amount & term |
|---|---|---|
| Credit CorpSmall, short borrowing for UK limited companies and LLPs — no personal guarantee. | 0.25% interest per day · £5 one-off fee · total cost capped at 100% of the amount borrowedInterest only; the £5 fee is one-off. Repaying early reduces the total. | £50–£500 · 14–84 days |
| Merchant cash advanceA representative UK merchant cash advance, illustrative mid-range factor rate. | Factor rate typically 1.1–1.5x (commonly 1.15–1.35x), repaid via a holdback of ~10%–25% of daily card takingsExample: a 1.2 factor rate on £7,000 advanced means £8,400 repayable in total; the effective annualised cost depends entirely on how quickly your card takings repay it. | Scales with card takings · variable repayment period |
For a plain-English breakdown of what a business loan costs, and why, see the Help Centre.
When Merchant cash advance is the better choice
- Your revenue is genuinely card-sales-heavy and consistent enough for a holdback-based repayment to make sense.
- You want repayment to automatically flex down in a quiet trading month.
- You are comfortable with a total cost fixed by a factor rate rather than a day-rate interest calculation.
- You meet the provider's minimum card-takings requirement.
When Credit Corp fits better
- You want a known, capped cost and a fixed repayment schedule agreed upfront, not one tied to future card sales.
- Your revenue is not primarily card-based, or is too variable for a holdback structure to suit you.
- You want a rate that is directly comparable to other lending, not a factor rate that is hard to translate to APR.
- You will not give a personal guarantee, which some merchant cash advance providers require.
How to read the comparison
- A factor rate (e.g. 1.2x) is not an interest rate — it is a fixed multiplier on the amount advanced, so the same factor rate implies a very different effective annual cost depending on how fast your card takings repay it.
- We normalise to "cost per £100 borrowed, per 30 days" using an illustrative mid-range factor rate and a typical repayment period, so it can sit alongside a fixed-term loan; treat the figure as illustrative, not a quote, since actual merchant cash advance cost varies with your own repayment speed.
- A Credit Corp loan's simple daily interest rate and capped total cost are directly comparable across scenarios; a merchant cash advance's real cost is only knowable in hindsight, once repaid.
- Always get a specific, written cost example from a merchant cash advance provider based on your own average card takings before deciding.
Common questions
Is a Credit Corp loan cheaper than a merchant cash advance?
It depends on how quickly a merchant cash advance would be repaid from your card takings, which is not fixed in advance. A Credit Corp loan gives you a known, capped total cost from the outset regardless of trading; a merchant cash advance's true cost can only be seen once it is fully repaid.
Why choose Credit Corp over a merchant cash advance?
A directly comparable, capped rate agreed upfront, rather than a factor-rate structure whose effective cost depends on your future card sales — plus no requirement that your revenue be primarily card-based.
Does repayment slow down in a quiet month with either option?
With a merchant cash advance, yes — the holdback is a percentage of takings, so it falls automatically when trade is quiet. A Credit Corp loan has fixed instalments on a fixed schedule regardless of how trade is going, which is simpler to plan around but does not flex down automatically.
Can a business with low card sales use a merchant cash advance?
Generally no — merchant cash advance providers usually require a minimum, consistent level of card takings for the repayment mechanism to work. A Credit Corp loan has no such requirement, since repayment is by fixed instalment rather than a share of card sales.
Sources
Merchant cash advance figures are representative UK market ranges, accessed July 2026. Figures change and vary by provider — please get a specific quote before deciding.
- Merchant cash advance: published UK market guidance on factor rates, typically 1.1–1.5x (commonly 1.15–1.35x), repaid via a daily or weekly holdback of approximately 10%–25% of card takings.
If a known, capped cost agreed upfront fits better than a factor-rate advance tied to your card takings, see exactly what a Credit Corp loan would cost.
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Credit Corp lends to UK limited companies and LLPs under the body-corporate exemption (Articles 60B and 60L of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001). This is not consumer lending. The Financial Ombudsman Service and Financial Services Compensation Scheme do not apply. Full details: regulatory status and responsible lending policy.