Fit‑out finance for bars & restaurants — Is a merchant cash advance right for your fit‑out?

Summary (quick answer): A merchant cash advance (MCA) can be appropriate for small, urgent bar or restaurant refurbs where card takings are strong and predictable. MCAs are quick and flexible but usually more expensive than traditional loans and repaid via a percentage of card sales, which affects daily cashflow. For larger, capital‑heavy fit‑outs (full kitchens, structural works) lower‑cost options such as term business loans, asset finance or specialist fit‑out financing are often a better fit. UK Business Loans can quickly match you with lenders and brokers who offer MCAs and other hospitality fit‑out solutions — start a Free Eligibility Check to compare quotes.

UK Business Loans is an introducer — we do not lend or provide regulated financial advice. Submitting an enquiry is free and will not affect your credit score.

TL;DR — Short answer

MCAs are best for smaller, time‑sensitive hospitality fit‑outs when you have consistent, high card turnover and need funds quickly. They’re fast and flexible but usually carry higher overall costs and reduce daily working capital because repayments come straight from card takings. For larger fit‑outs (new kitchens, major structural work) or businesses that need predictable, long‑term repayments, traditional loans, asset finance or specialist commercial fit‑out finance are often better value. If you’d like tailored options, get a Free Eligibility Check and compare quotes from lenders and brokers: Get Quote Now — Free Eligibility Check.

How a merchant cash advance (MCA) works — the essentials

An MCA is an advance paid to your business in return for a fixed multiple of that advance (the “buy‑back” or factor rate) repaid via a set percentage of your card takings or EPOS receipts. MCAs are not structured like standard term loans — they are typically quoted as a factor (e.g. 1.2x) or fixed fee rather than an APR. Repayments are collected daily or weekly as a piece of your card turnover.

Example: take a £30,000 MCA at a 1.25 factor → total repayment £37,500. If the daily remittance is 8% of card sales, and you average £2,000 card sales per day, you’d pay £160 per day until the balance is cleared. That can mean the facility is repaid quickly — or slowly — depending on takings.

MCAs are attractive for speed and approval flexibility. However, terms, fees and protections vary widely between providers. Always ask for a worked example showing total payable, typical repayment period based on your sales, and any extra charges.

Are MCAs suitable for bar & restaurant fit‑outs? When it might make sense

MCAs can be appropriate in hospitality where:

• You have high, predictable card/EPOS turnover (city centre venues, busy pub or late‑night bars).
• You need funds fast to capture a short lead‑time opportunity (urgent repairs, a limited‑time refit contractor availability).
• You want to avoid charged‑up security on property or long underwriting delays.
• You’re financing a relatively small cosmetic or customer‑facing refurb (bar counters, seating, lighting, décor) rather than major kitchen installs.

When to avoid MCAs:

• Large capital projects (complete kitchen installs, major structural work or commercial building projects) — cheaper long‑term finance is usually better.
• Seasonal or highly variable takings — unpredictable repayments can hit liquidity.
• If you need predictable fixed monthly payments to manage cashflow and staffing costs.

Scenarios:

• Small pub cosmetic refit (£15k): MCA can get work started in days and pay out over a few months if takings are stable.
• New restaurant opening with full kitchen (£120k+): asset finance, commercial refurbishment loans and staged contractor finance are normally more suitable and cost‑effective.

Costs & repayment mechanics — what hospitality owners must check

Factor rate vs APR: MCAs are commonly quoted as a factor (e.g. 1.15–1.5) — multiply your advance by that factor to get the total repayable. Because repayment schedules vary with daily takings, converting to an APR is complex and often misleading. Focus on total payable and the likely term based on your average card turnover.

Cashflow impact: daily or weekly remittances reduce available cash. If you’re taking a high percentage of card sales each day, this can squeeze stock purchases, payroll and utilities. Ask the provider to model repayments against your actual EPOS/card statements.

Fees and traps to watch:

• Origination or arrangement fees.
• Daily servicing or administrative fees.
• Default penalties and fixed interest on missed remittances.
• Early settlement terms (some offer discount for early repayment, others don’t).

Always get a clear breakdown of total payable, an estimate of the repayment period based on your historical takings, and whether holdbacks or reserves will be used.

Free Eligibility Check — Get Quote Now

Fit‑out finance alternatives — compare to MCAs

Common alternatives and when they fit:

• Term business loans (secured or unsecured) — lower cost for larger sums, predictable monthly repayments; may require security and longer approval.
• Asset & equipment finance — ideal for kitchen kit, ovens, refrigeration; spreads cost over equipment life and preserves cash for other needs.
• Commercial fit‑out / development finance — for larger refurbishments and staged works, often tailored with milestone draws.
• Invoice finance / overdrafts — short‑term working capital while awaiting receipts; not suitable for capital installs but useful alongside other facilities.

Which to choose (quick guide):

• Small cosmetic refit, urgent: MCA or short‑term cashflow loan.
• Major kitchen install: asset finance + longer term loan or specialist commercial lender.
• Staged contractor payments on large refurb: development finance or staged loan.

Not sure which suits you? Get a Free Eligibility Check and we’ll match you to brokers and lenders who specialise in hospitality fit‑outs.

What lenders and brokers will ask for — preparation checklist

Typical requirements for fit‑out funding:

• Minimum funding request usually £10,000 and above.
• Recent business bank statements (typically 3–6 months).
• EPOS/card terminal reports showing average daily/weekly card turnover.
• Director ID (passport/driving licence) and proof of address.
• Management accounts or company accounts where available.
• Detailed fit‑out quotes from contractors and a basic cashflow projection showing revenue uplift and repayment affordability.

Present your project clearly: itemised contractor quotes, timeline, expected revenue benefit and contingency plans for slower trading periods; this improves your chances and helps brokers find competitive options.

How UK Business Loans helps — quick process

Our simple 4‑step introduction process helps you find the right hospitality finance quickly:

1. Complete our quick enquiry (2 minutes).
2. We match you to lenders and brokers who specialise in hospitality and fit‑out funding.
3. Selected providers contact you with quotes and options.
4. You compare and choose the best offer — we’ll stay in touch to help if required.

We are an introducer — we do not lend and do not provide regulated advice. Submitting an enquiry is free and will not affect your credit score. We typically assist businesses seeking £10,000 and upwards. Start your Free Eligibility Check — Get Quote Now.

Choosing responsibly — questions to ask any lender or broker

• What is the total amount I will repay (in GBP), and over what estimated period?
• How are repayments collected and how will this affect daily cashflow?
• Are there any origination or daily servicing fees?
• What happens if card takings fall — are there forbearance terms?
• Can I settle early and what discount or penalty will apply?
• Is any security required against the business or directors?
• Can I see a worked example using my historic EPOS/card data?

Case study vignettes (illustrative)

City gastropub — cosmetic refit (£18,000): Busy venue with strong nightly card takings took an MCA to replace seating, lighting and bar front. Funds were released in 48 hours; repayment period modelled at 3–5 months. Quick turnaround boosted covers and average spend, but daily remittance required careful stock planning.

New neighbourhood restaurant — kitchen install (£85,000): Chose a mix of asset finance for major kitchen equipment and a staged commercial refurbishment loan for contractor draws. Lower monthly cost and staged releases matched contractor milestones and preserved working capital through opening season.

For detailed guides on funding a fit‑out, see our dedicated fit‑out finance information: fit-out finance.

FAQs

Can a merchant cash advance pay for a full bar or restaurant fit‑out?

Possibly for smaller or partial fit‑outs with strong card turnover. Large capital projects usually suit loans or asset finance better.

How quickly can I get an MCA decision?

Many MCA providers can decide within 24–72 hours; funding speed depends on checks and documentation.

How is an MCA repaid from card takings?

Typically by a fixed percentage of daily/weekly card sales until the agreed total is repaid.

How much will an MCA cost compared with a business loan?

MCAs tend to be more expensive; compare total repayment and ask for worked examples to compare accurately.

Will applying affect my credit score?

Submitting an enquiry via UK Business Loans does not affect your credit score. Lenders may run checks later if you apply.

What documents are needed for fit‑out finance?

Bank statements, EPOS/card summaries, contractor quotes, director ID and management or company accounts are common requirements.

Are MCAs regulated in the UK?

MCAs are not consumer credit products in the same regulatory regime; contract terms vary so check carefully.

Can UK Business Loans arrange an MCA for my business?

Yes — we can introduce you to lenders and brokers who provide MCAs and other fit‑out finance options; we are an introducer, not a lender.

Final summary & how to get started

MCAs are a useful, fast option for smaller, urgent fit‑outs where card income is strong and predictable. They carry higher cost and reduce day‑to‑day cashflow because repayments come from takings. For larger projects, consider lower‑cost longer‑term finance or asset finance. To compare options quickly and for free, complete a short enquiry and we’ll match you with lenders and brokers who specialise in hospitality fit‑outs: Get Quote Now — Free Eligibility Check.

1. Can a merchant cash advance (MCA) fund my bar or restaurant fit‑out?
Yes — an MCA can fund smaller, urgent fit‑outs where card/EPOS takings are strong and predictable, but it’s usually too costly for major kitchen or structural projects where term loans or asset finance are better.

2. How quickly can I get fit‑out funding when using UK Business Loans?
Submit a free eligibility enquiry and we’ll match you to lenders who often provide MCA decisions within 24–72 hours, with funding shortly afterwards depending on the provider.

3. Will submitting an enquiry through UK Business Loans affect my credit score?
No — a free enquiry via UK Business Loans does not affect your credit score; lenders may run credit checks only if you proceed with an application.

4. What documents do lenders typically ask for when financing a fit‑out?
Lenders usually request 3–6 months of business bank statements, EPOS/card terminal sales summaries, director ID, contractor quotes and management or company accounts.

5. How much does an MCA cost compared with a business loan or asset finance?
MCAs are normally quoted as a factor rate and tend to be more expensive than term business loans or asset finance, so compare total repayable amounts and ask providers for worked examples.

6. What are the best alternatives to an MCA for restaurant or bar fit‑outs?
Alternatives include term business loans for lower-cost capital, asset/equipment finance for kitchen kit, and staged commercial or development finance for larger refurbishments.

7. Can UK Business Loans help me find specialist fit‑out finance for hospitality?
Yes — we act as an introducer and can match you with brokers and lenders who specialise in hospitality fit‑out finance for projects typically from £10,000 and up.

8. How are MCA repayments collected and how will they affect my cashflow?
MCAs are repaid as a fixed percentage of daily or weekly card takings, which directly reduces available cashflow and can strain the business during slower trading periods.

9. Are MCAs regulated in the UK and what protections exist?
MCAs are not covered by the same consumer credit regulations, so protections vary and you should carefully review contract terms, fees, default clauses and early settlement options.

10. What size of fit‑out can I realistically finance through lenders you introduce?
We typically assist businesses seeking £10,000 and above and can introduce you to lenders or brokers who handle everything from small cosmetic refurbs to larger staged commercial fit‑out financings.