Retailer Cash Advance

What is Retailer Cash Advance?

In short, a retail merchant financing arrangement allows a retailer to raise cash upfront via selling a portion of their future credit card sales.

Retailer cash advance may also be commonly referred to as Merchant Cash Advance.

Retailers needing to expand to capture an opportunity can borrow against their future credit card receipts. Repayment will be deducted against their future credit card receipts. On a good month, more will be repaid, on a bad month, less will be repaid. So there is absolutely no pressure. Helps to smooth out cash flow.

To qualify: -
  • Retail outlet with positive cash flow
  • Minimum 20% of sales from credit card sales
Read more about SME business loans.

Scenario 1: Restaurant With Aging Renovations Needs to renovate to stay competitive

Restaurant C is located in the Central Business District (CBD) and has been operating for the last five years with a steady stream of customers from the surrounding offices. Unfortunately, the restaurant’s decoration is starting to show wear-and-tear and is overdue for an update. Restaurant C’s cash flow is also currently stretched as it recently opened a second restaurant branch.

Faced with this situation, the owners of Restaurant C approached to find a financing partner. We suggest that Restaurant C consider a Retailer Cash Advance (RCA) to enable it to proceed with the renovations.

Upon the financier's assessment of the retailer's application, Restaurant C was informed that the Financier would be prepared to “buy” a portion of their future credit card receipts at a discounted price. Restaurant C would receive cash upfront in exchange for a percentage of their future credit card receipts.

This meant that a fixed percentage of the restaurant’s daily credit card takings would be paid to the financier. When business was good, a higher amount would be paid to the Financier and correspondingly, when business was slower, the amount to be paid would also reduce.

Restaurant C’s owners found that the Retailer Cash Advance aligned their payments to the Financier with the cash flow of their business. They decided to take up the Retailer Cash Advance as they found it be a convenient and hassle-free way to finance their renovations. As a result, were able to proceed with the renovations with the cash received upfront.

Scenario 2: Car Repair Workshop needing funds to expand

In the case of Car Repair Workshop, the discovery of a unique cash advance facility in Singapore turned out to be their lifeline and a platform for growth and expansion.

With the new car loan ruling implemented in early March 2013, most of the car owners will be less likely to purchase new cars in the near future. Mr Lee, 50, foresees potential growth for his business which focus in doing repair works and servicing for motor vehicles; however he faced with the lack of cash flow to finance the purchase of more inventories and to hire more manpower to cater to the increased demand.

Mr Lee was referred to Retailer's Cash Advance. The financier reviewed Car Repairs workshop's business in detail and provided sufficient working capital for their short term needs but yet keeping the company’s debt at a reasonable and manageable level.

What does provide? is a loan broker which sources for appropriate funding solution for your company. Our relationships to the financier allows us to obtain preferential rates that may sometimes be cheaper than going direct to the financier. IcompareLoan's will continue to act as your financing partner on a retainer basis to assist you to source and obtain various forms of financing.

Typically small businesses lack professional business advice, and many companies make very simple and basic strategy or operations mis-steps which can be very costly. IcompareLoan's Senior Consultants holds MBAs, CFAs, CA (CPA), Masters of Applied Finances and/or Bachelor's degree or Technology subject matters experts with many years of industrial and commercial experiences. Many of our consultants are also Ex-bankers and technologists. IcompareLoan could assist you to perform Audits & analysis on your business strategy, operations to assist you to properly structure and grow your business. This is the iCompareLoan difference.