Revenue-based finance vs merchant cash advance: key differences

The repayment source. 365 Finance, which offers both in Ireland, says its merchant cash advance only takes payments from credit and debit card transactions, while its revenue advance takes payments from total turnover, including cash payments, invoices and card payments, generally monthly.

The terms are not always used consistently. 365 Finance’s own FAQ describes revenue-based financing as “also known as a merchant cash advance”, and Wayflyer’s revenue-based funding can be repaid as a percentage of daily sales or as a fixed daily amount. Always ask a provider exactly which income its collections are based on.

• Repaid from: MCA, card terminal settlements; RBF, total revenue or sales across channels, depending on the provider.
• Collection: MCA, usually a daily split deducted at the card terminal or through a redirected payout account; RBF, daily, weekly or monthly, often by direct debit or from a connected platform.
• Typical users: MCA, restaurants, cafés, pubs, shops, salons and pharmacies; RBF, online retailers, subscription and software companies, and multi-channel businesses.
• Data used: MCA, card terminal history and bank statements; RBF, connected sales platforms, payment providers, bank accounts and sometimes marketing data.
• Pricing: both usually a fixed fee or factor rateA pricing method used mainly for merchant cash advances and some short-term finance, expressed as a multiplier such as 1.2 rather than an interest rate. agreed upfront. Wayflyer, for example, describes a one-time fee set as a percentage of the funding amount.
• Term: both are open-ended until the total is repaid, though some agreements set a final date. Wayflyer says some European agreements include a longstop date by which the full amount must be collected.
• Early repayment: with a fixed fee, paying early usually does not reduce the cost for either.

From the providers’ own pages, checked on 22 October 2026:

• 365 Finance: an MCA and a revenue advance, up to €250,000, for businesses trading at least six months with card turnover of at least €10,000 a month. It says it does not need a personal guaranteeA legally binding promise by a director or other individual to repay a company's debt if the company cannot. for its MCA.
• Wayflyer: revenue-based funding for e-commerce and other consumer brands. It asks to connect up to five platforms, such as Shopify, Amazon, WooCommerce or Magento, marketing tools, bank accounts, Stripe where relevant, and sometimes accounting software. It estimates repayment typically takes 12 to 24 weeks.
• YouLend through Square: merchant cash advances and/or loans for eligible Square sellers in Ireland, based on their Square transaction history. Payouts are sent to a virtual IBAN provided by YouLend.
• Shopify Capital: launched for eligible Irish merchants in September 2025, with funding offered through the Shopify admin.

This is not a full list, and inclusion is not a recommendation. Every offer depends on the provider’s own assessment.

The mechanics affect your day-to-day cash, so ask how collection works before you compare prices.

• Card terminal split: the agreed percentage is deducted from each day’s card settlements before the balance reaches your account. 365 Finance says its MCA deductions are set up with your card terminal provider.
• Redirected payouts: your card or platform payouts go to an account the provider controls, which passes on the balance. Square’s Irish help pages, for example, explain that sellers funded by YouLend may need to send payouts to a virtual IBAN provided by YouLend.
• Connected platforms: some revenue-based funders read daily sales from your e-commerce or payment platform and collect a percentage, or a fixed daily amount, from your bank account.
• Monthly collection on total turnover: 365 Finance says payments on its revenue advance are generally taken monthly.

Daily collection smooths repayments but reduces the cash in your account every day. Monthly collection leaves more cash in hand during the month, but you need to make sure it is there on collection day.

Neither product is cheaper by design. Both charge a fixed cost, and what you pay in annual terms depends on the fee and how fast your collections clear it. The real difference is how each one behaves when one sales channel slows and another does not.

As a rough guide, based on how each sector usually gets paid:

• Hospitality, such as restaurants, cafés, pubs and hotels: mostly card at the till, so an MCA is the natural fit. See finance for hospitality.
• Retail with a single shop: usually card-heavy, so an MCA often fits. Retailers with a strong web shop may do better with RBF.
• E-commerce and direct-to-consumer brands: income flows through platforms such as Shopify, Amazon or Stripe, which suits RBF providers that connect to that data.
• Software and subscription companies: predictable monthly income often suits RBF, although providers will look closely at churn, refunds and growth.
• Tourism-linked businesses on a seasonal cycle: either can work, depending on whether income is taken in person or booked online.

Whichever fits, the provider will want to see a track record. Start-ups with little trading historyHow long a company has been actively trading, and the record of that trading shown in its filed accounts, bank statements and tax returns. may find fewer providers willing to offer either. Mixed businesses are common, too: a café with a busy online ordering service, or a garden centre with a strong web shop, may find that neither product follows all of its income. In that case, compare both with a term loan, and work out which share of income is most likely to fall in a quiet month before you decide.

Both look at current trading more than at assets, but they read it differently:

• MCA providers: months of card terminal history, average monthly card takings, how steady they are, and bank statements. 365 Finance, for example, asks for at least €10,000 a month in card sales.
• RBF providers: revenue across channels, growth, gross margin, refunds, marketing spend and stock levels, often read directly from connected platforms through secure data links or open banking.
• Both: filed CRO accounts, a tax clearance certificateConfirmation from Revenue that a company's tax affairs are in order., director ID and checks on existing debts. Lenders that search the Central Credit RegisterA database operated by the Central Bank of Ireland holding information on loans of €500 or more. leave a record of the enquiry, and not every provider reports to it.

Before you connect your data

• Ask exactly what access the provider is requesting, and for how long.
• Check whether it can see only sales data or also customer details.
• Find out how to revoke access once the advance is repaid.

An MCA may suit you if

• Most of your income goes through a card terminal, as in hospitality and retail.
• Footfall is seasonal and you want repayments to ease in quiet months.
• You do not sell much online.

RBF may suit you if

• You sell mainly online, through subscriptions or across several channels.
• Your sales data sits in platforms such as Shopify, Amazon or Stripe that a provider can read.
• You want funding linked to marketing or stock cycles that drive online sales.

When neither suits

• Margins are thin, so giving up a share of every sale would leave too little for wages, VATA tax charged on most goods and services supplied in Ireland, collected by VAT-registered businesses and paid to Revenue. and suppliers.
• Sales are falling, and the funding would cover ongoing losses rather than a one-off need.
• You need long-term funding for premises, major equipment or an acquisition. A term loan or asset financeAn umbrella term for funding used to acquire vehicles, plant, machinery, equipment or technology, where the asset itself usually acts as security. usually fits better.
• Most of your income comes from B2B invoices on credit terms. Invoice financeAn umbrella term for funding secured on a company's unpaid invoices, so cash comes in before customers pay. is designed for that.
• You already have a revenue-linked advance, and a second would mean two providers sharing the same income.

If fixed payments are affordable, compare both with a term loan too. Our comparison of merchant cash advance vs business loan shows that trade-off in euro.

1. Which income counts: card only, online, bank receipts, cash or invoices.
2. What happens if you add a new sales channel or payment provider during the agreement.
3. Whether there is a minimum payment, a longstop date or a fixed end date.
4. How refunds, chargebacks and VAT in your gross sales are treated in the calculation.
5. Whether a personal guarantee or any security is required.
6. Whether the provider searches or reports to the Central Credit Register, and whether it is regulated for this product.

Some revenue-linked products are written as loans by regulated lenders, while others are structured as a purchase of future receivables, which affects whether the Central Bank’s SME Lending Regulations apply. Ask the provider in writing.

Revenue-based finance and merchant cash advance are both products our lender panel may be able to help with. Tell us how your company takes payment, its monthly revenue by channel and what the money is for, and we can tell you which lenders on our panel may consider your company; we do not give financial advice. Any offer will set out the total cost in euro. Start-ups registered as limited companies in Ireland can apply, though options may be fewer for a new company. Sole traders and partnerships cannot apply through us. We are paid commission by lenders. We do not charge your company a fee and never ask for payment upfront. 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., PLC or ULC).