Funding Alternative review: merchant and business cash advances for UK SMEs

Funding Alternative, which we list as Funding Alternative Group, provides unsecured cash advances to UK small businesses, with repayments that can rise and fall with your takings. Based in Chessington, Surrey, it offers business cash advances, merchant cash advances and selective invoice finance from £10,000 to £250,000. Smart Funding Solutions is an independent broker, so we can compare its offer with other sales-linked funders and with conventional loans.

01About Funding Alternative

Funding Alternative describes itself as a team of entrepreneurs who understand the cash flow problems that banks often will not address. Its pitch is quick, online funding for British business owners, with a decision within four hours of applying and a dedicated relationship manager for each client. Its site gives an address in Chessington, Surrey.

It does not ask for property as security. Instead, it looks at how much money flows through the business and offers an advance that is repaid either as a share of revenue or by fixed monthly payments.

02What Funding Alternative funds

Product	How it works	Typical size	Typical term
Merchant cash advance	An advance repaid as a percentage of your future card sales	£10,000 to £250,000	Varies with sales
Business cash advance	An advance against future revenue, repaid in proportion to income or by fixed payments	£10,000 to £250,000	Varies with sales
Selective invoice financing	Releasing cash against individual unpaid invoices	Case by case	Until the invoice is paid

A merchant cash advance is designed for businesses that take most of their income by card, such as restaurants, shops and salons. A business cash advance works in a similar way to revenue-based finance and can suit firms paid by bank transfer or online platforms. Funding Alternative's site does not publish a fixed term, because repayment speed follows your sales.

The site lists a wide range of uses: working capital, stock, staffing, equipment, cash flow, expansion, premises, projects and refurbishment.

03Who Funding Alternative suits (and who it may not)

Funding Alternative's published criteria are relatively light:

• Annual turnover of at least £25,000
• At least 6 months of trading
• The current owner in place for at least 6 months

That opens the door to younger and smaller businesses than many lenders will consider. Typical fits include a cafe that wants to refit before summer, a beauty salon buying new equipment, or an online retailer stocking up for a sales peak. Because repayments flex with income on revenue-linked options, quieter weeks mean smaller repayments.

It is less likely to suit businesses with thin margins, those already repaying another cash advance from the same takings, or companies that need a large, long-term loan for a major investment. Strong, established businesses may also find a term loan cheaper overall.

The site lists a wide range of uses: working capital, stock, staffing, equipment, cash flow, expansion, premises, projects and refurbishment.

04What Funding Alternative looks at

Cash advance providers typically base decisions on:

• Recent business bank statements
• Card terminal or merchant statements for a merchant cash advance
• Monthly turnover and how consistent it is
• Time trading and time under current ownership
• Existing advances or loans and their repayments
• Credit checks on the business and its owners

Be upfront about any existing advance. Many providers will refinance or settle an existing balance as part of a new deal, but stacking two sets of daily or weekly deductions can quickly strain cash flow. If you are already in that position, our guide to refinancing a merchant cash advance explains the options.

05Pros and cons

Pros

• Unsecured, with no property needed
• Accepts businesses with just six months of trading and £25,000 turnover
• Decisions within four hours
• Choice of revenue-linked or fixed monthly repayments
• Dedicated relationship manager

Cons

• Cash advances usually cost more overall than a conventional term loan
• Repayments taken from takings reduce day-to-day cash
• Maximum of £250,000
• Short repayment periods are not suited to long-term investment

06Applying through a broker vs going direct

You can apply online at Funding Alternative's website. The reason to compare first is that cash advances vary a lot in total cost and in how quickly they collect repayments. Two offers for the same amount can look similar but leave very different cash in the business each week.

We search the market across 300+ lenders, compare cash advances with unsecured loans and revolving facilities, and set out the total repayable and repayment pattern of each offer. Smart Funding Solutions is an independent broker and is not part of Funding Alternative, which is one of the lenders on our panel. It is free to enquire; any broker fee is disclosed separately before you proceed. Try our instant quotes tool to compare lenders in minutes.

07Alternatives to Funding Alternative

• 365 Finance: a merchant cash advance specialist worth comparing for card-taking businesses.
• Sapi: another merchant cash advance provider, useful for a like-for-like quote.
• Capify: offers merchant cash advances, revenue-based finance and secured options, which can suit businesses wanting more choice of structure.

Before signing any sales-linked deal, run the numbers through our merchant cash advance calculator.