An MCA is quoted as a factor rate, not an interest rate — which makes it look far cheaper than it is. This converts it into an annualised cost you can compare with anything else.
A factor rate of 1.35 on £25,000 means you repay £33,750. That sounds like 35%. It is not 35% a year — it is 35% over however long the repayment takes, and because an MCA is repaid as a percentage of card takings, a good trading month makes it more expensive in annual terms, not less.
Repay that £33,750 over nine months and the equivalent annual cost is not far off 70%. That is the number to hold next to a term loan quote, and it is the number no MCA quote shows you.
Genuinely short bridges where speed matters more than price, and businesses with card takings but no assets to secure against. It is expensive money, not bad money — the mistake is using it for something that was never short-term.
If you are already in one and the trading is sound, refinancing is usually the single biggest saving available to you — and it is one of the more common reasons businesses run a funding search in the first place. We are an introducer: we put your profile in front of the lenders on Swoop’s panel and you deal with whoever fits. We do not lend, and we are not a broker.
It takes a few minutes to see what your business is eligible for. Free, impartial, no pressure.
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