In much the same way as a loan, a lump sum is paid into your bank at the start of the agreement. Whereas with a loan, you would make monthly repayments to pay off your loan, a merchant cash advance is repaid daily.
The daily repayments are taken automatically as a percentage of your card terminal receipts. The percentage taken is agreed upfront and is usually between 10-20% of the amount taken.
As the repayments are based on a percentage of takings rather than a set payment, you repay more when card receipts are up and less during quieter times. This can make managing cash flow much easier, especially as you don’t have to find a large lump sum each month.