A merchant ID number (MID) is the number attached to a processing account, i.e. to Lloyds / Barclays / Worldpay. It is similar to an account number on a bank account and is typically required to process credit or debit card transactions.
Businesses need a merchant ID to repay their loan because of the way business cash advances are settled, typically through the use of a card terminal that is linked with the cash advance provider. Without a merchant ID loan terms cannot be fulfilled.