Merchant cash advances and NatWest business loans (National Westminster Bank Plc) are both financing options that offer small businesses the working capital that they might require. However, although both claim to the best financing option, it is also true that both have vital structural differences.

Between these financing options, merchant cash advances are evidently the best funding option for small businesses that are in immediate need of working capital. However, to establish this, the following comparisons should leave no doubt in the choice of funding suitable for your business:

Business structure

A NatWest business loan and merchant cash advance are both designed as working capital finance. However, they are structurally organized differently. A NatWest loan is more designed the same as a car or mortgage loan. The borrower is provided with a particular amount expected to be repaid in regular intervals and in a proportion.

A merchant cash advance, on the other hand, is designed in such a way that money offered is leveraged on future credit or debit sales. The merchant cash advance provider will deduct a pre-agreed upon percentage of your daily or monthly credit sales. You do not have to worry about scheduled fixed payments since the deductions vary with the credit sales; if sales are low, then the deductions by the merchant are low too and vice versa.

With a NatWest business loan, however, there is always a fixed loan maturity date, and you will be expected to repay the full amount by that date. You will, however, repay the merchant cash advance without worry as long as your business makes the credit sales until you complete the principal amount plus interest.


Merchant cash advance does not require any collateral since the cash advance is covered by your future credit sales. On the other hand, a  NatWest business loan requires that you provide security, or else the director guarantees your loan.

Credit report

If you are concerned about a business loan being reflected on your credit report, a NatWest business loan might not be your best option. A merchant cash advance is not technically a loan, and will not reflect anywhere on your credit report. The loan is considered as a cash advance on business sales and is not reflected anywhere in your credit score. Interestingly, this is also the reason why merchant cash advance providers will give you working capital whether your credit score is good or bad.

In order to be given a NatWest business loan, the lender does not only look on your credit score. The bank will also consider your business total revenues, unlike the merchant cash provider who will only consider your credit card sales.


Whichever way you compare a NatWest business loan with a merchant cash advance, the latter has greater appeal as your option for raising business working capital. This is notwithstanding that merchant cash advances are easier to apply for, and they are disbursed into your business account even much faster.