Merchant cash advance costs and factor rates explained

The provider looks at your card terminal history and offers an advance based on what your company typically takes by card. You agree three numbers before you sign:

• The advance: the cash paid into your business account.
• The total repayable: the advance plus the provider’s fixed cost.
• The holdback or split: the percentage of each day’s card sales that goes to the provider until the total is repaid.

Repayments are taken automatically, usually every day, from your card settlements. Depending on the provider, the split is set up with your card terminal provider, or your card payouts are redirected to an account the provider controls, which then passes the balance on to you. For example, Square’s Irish help pages explain that sellers who take YouLend funding through Square may need to change their payout account to a virtual IBAN provided by YouLend. Once the total is repaid, collections stop.

Cash payments, bank transfers and invoices are usually not included. Some providers offer a separate product that takes repayments from total revenue instead, which is covered in our guide to revenue-based finance in Ireland.

Criteria vary, but the published terms from lenders active in Ireland give a clear picture of the typical minimum standards:

• 365 Finance (Ireland): advances of €10,000 to €250,000, at least six months’ trading and at least €10,000 a month in card sales. Its product page says repayments are typically 5% to 15% of card sales, with no fixed term, and that a personal guaranteeA legally binding promise by a director or other individual to repay a company's debt if the company cannot. is not needed for its MCA.
• Linked Finance: MCA from €10,000 to €150,000, over up to 12 months. It asks for annual turnover over €100,000, card acceptance through a compatible terminal, and a personal guarantee.
• YouLend: offers MCAs to eligible Square sellers in Ireland based on their Square transaction history, with YouLend handling eligibility, funding and servicing.

Lender criteria change, and these figures are from the providers’ own pages as checked on 21 October 2026. Any offer is subject to the lender’s assessment.

Documents to have ready

• Six months of business bank statements.
• Three months of merchant (card terminal) statements.
• Your most recent financial accounts, filed with the CROThe State body that registers Irish companies and business names and keeps their public filings, including constitutions, director details, annual returns, financial statements and registered charges..
• A tax clearance certificate or your tax clearance access number.
• ID and address for directors, and details of beneficial owners for KYC and AML checks.

Our checklist of documents for a business loan application covers each item in more detail.

The MCA cost is the difference between the total repayable and the advance, usually fixed at the start by a factor rate. What it costs per year depends on how quickly your card sales repay it.

Most MCAs are priced with a factor rate, and factor rates explain most of the cost. A factor rate of 1.15 means you repay €1.15 for every €1 advanced. The cost in euro is fixed at the start, and it does not increase if your sales slow down and repayment takes longer.

That makes the headline number easy to understand, but hard to compare with a loan. A loan’s APRA standardised measure of the total yearly cost of credit, including interest and certain charges. reflects how long you hold the money. A factor rate does not. The same fixed cost paid back in six months is far more expensive, in annual terms, than if it is paid back over 18 months.

Not every provider uses the term factor rate. 365 Finance describes one all-inclusive cost agreed upfront, while Linked Finance quotes its MCA pricing as a rate linked to a loan grade. Whatever the label, ask every provider for the total amount repayableThe full sum a company will pay over the life of a loan or finance agreement, including the amount borrowed, interest and all fees. in euro.

Illustrative example: the basic maths

• Monthly repayment: 10% of €40,000 = about €4,000.
• Time to repay €36,000: about nine months.
• Rough annualised equivalent: about 57%, because the €6,000 cost is paid over a short period on a falling balance.

Illustrative example: what happens if sales fall

Now suppose card sales drop to €25,000 a month after the first month, because of road works outside the premises. Repayments drop to about €2,500 a month and the advance takes around 14 months to clear. The cost stays at €6,000, so the rough annualised equivalent falls to about 37%. Your cash flow is protected, but you are tied to the provider for longer.

You can test your own figures with our merchant cash advance calculator and compare them with a term loan using the business loan calculator.

Because an MCA has a fixed cost and a loan charges interest over time, compare them on the total amount repayable and how quickly you expect to repay. Our guide to merchant cash advance vs a business loan compares repayments, early settlement and eligibility side by side.

For the loan alternative, see short-term business loans. If the need is a one-off tax bill, a general business loan used to pay Revenue may cost less than an advance taken against months of card sales.

An MCA can work well when your company:

• Takes most of its income by card and has at least several months of consistent terminal history.
• Has seasonal trading, such as a coastal restaurant or a shop that peaks before Christmas, and wants repayments that ease in the quiet months.
• Needs funds for a specific, short-term purpose that should earn back the cost, such as stock for a busy season or a refit that increases covers.

Think twice if:

• Your margins are thin. Losing 10% of every card sale for months can squeeze the cash you need for wages, VATA tax charged on most goods and services supplied in Ireland, collected by VAT-registered businesses and paid to Revenue. and suppliers.
• You are using the advance to cover an ongoing loss rather than a one-off need.
• You would need to take a second advance to clear the first. Stacking advances is a warning sign.
• You expect to switch card terminal provider soon. Check what the agreement says about changing terminals before you sign.

1. What is the total amount repayable in euro, and are there any other fees?
2. What percentage of card sales will be taken, and how often?
3. Is there a minimum payment, or a date by which the full amount must be repaid?
4. Is there a discount for early settlement?
5. Is a personal guarantee required? If so, read our guide to personal guarantees on company loans.
6. Will the provider search or report to the Central Credit Register?
7. Is the provider regulated by the Central Bank for this product, and which protections apply?
8. What happens if you change card terminal, or if the business closes or is sold?

It depends on the provider and how the product is written. Some MCAs are loans from regulated lenders; others are a purchase of future card sales, which can fall outside some Central Bank rules, so ask each provider in writing.

The Central Credit RegisterA database operated by the Central Bank of Ireland holding information on loans of €500 or more. does not give a credit score. Lenders that search the Central Credit Register leave a record of the enquiry, and lenders must check the register for credit applications of €2,000 or more. Loans of €500 or more are reported to it. Not every non-bank provider reports to the CCR, and some MCA providers say they run only a soft search for a quote. Ask before you apply.

Some MCAs are structured as a purchase of future card sales rather than a loan. That can affect which Central Bank rules apply, including the SME Lending Regulations, which give micro and small enterprises protections with regulated lenders. The Consumer Protection Code already covered companies with turnover up to €3 million when they deal with regulated providers; from 24 March 2026 the limit rose to €5 million. If protections matter to you, ask the provider in writing which rules it follows.

Merchant cash advance is one of the products our lender panel can help with. Tell us your company’s monthly card takings, how long it has traded and what the funds are for, and we can tell you which lenders on our panel may consider your company, and what the total cost of any offer would be. We do not give financial advice. Some lenders say they can decide within 24 hours of a complete application; this is not guaranteed. Welcome Finance is a commercial finance broker, not a lender, and is not regulated by the Central Bank of IrelandIreland's financial regulator and part of the Eurosystem.. We work only with companies registered in Ireland (LTD, DACA type of Irish private company under Part 16 of the Companies Act 2014 that keeps an objects clause in its constitution, limiting what it can do, and uses the suffix DAC., PLCA company type under Part 17 of the Companies Act 2014. or ULCA company under Part 19 of the Companies Act 2014 whose members have unlimited liability for its debts.), we are paid commission by lenders and do not charge your company a fee. We never ask for payment upfront.

Try your own figures: our factor rate calculator turns a factor rate into an equivalent APR, and the merchant cash advance calculator estimates how long repayment could take from your card takings.