Daily or weekly repayments: which is better for my company?
Sterling's answer Weekly is slightly cheaper in APR terms and much easier to plan around, because you are not watching the account every morning. Daily only makes sense if your takings land daily and the funder will not offer weekly.
Want a straight answer for your business?
See who'll fund meWeekly repayments are usually the better choice for a limited company if you can get them: they cost slightly less in APR terms and are much easier to plan around. Daily repayments match businesses whose takings arrive every day, like hospitality or retail, but a fixed daily debit does not flex when a day is quiet. The total you repay is the same either way. What changes is the rhythm, and a little of the real cost.
The same advance, two rhythms
£10,000 at a 1.35 factor rate over 6 months, so £13,500 back and £3,500 cost.
| Daily | Weekly | |
|---|---|---|
| Number of payments | 126 (21 business days a month) | 26 (52 a year) |
| Each payment | £107.14 | about £519.23 |
| Total repaid | £13,500 | £13,500 |
| APR | about 126% | about 123% |
The weekly APR is lower because each week's money stays in your account a few days longer before it goes out. Over 12 months the gap is similar: about 63% daily against about 62% weekly at 1.35.
What daily repayments do to cash flow
A daily debit takes money before you have seen the day's takings land. On a strong day you barely notice. On a quiet Monday after a slow weekend, it can push the account close to zero, and a returned payment can trigger fees or a breach of the agreement.
Daily suits companies where:
- takings arrive every day, mostly by card;
- the daily amount is small relative to an average day's sales;
- the business has a cash buffer for quiet days.
What weekly repayments do to cash flow
A weekly payment is bigger, but you know exactly when it lands. You can line it up with when your takings or customer payments arrive, and you are not checking the account every morning.
Weekly suits companies where:
- income lands in lumps (weekly card settlements, customer invoices);
- wages and suppliers are already on a weekly cycle;
- the owner wants one predictable number to plan around.
Sterling's take: pick the rhythm that matches when your money actually arrives. Fighting your own cash cycle costs more than the APR difference.
Where a holdback fits
A percentage holdback is a third option: the funder takes a set share of each day's card takings. It flexes with sales, which helps in a slow month, but makes the term uncertain. See what is a holdback.
What to do next
Put your offer into the MCA APR calculator both ways and look at the APR and the size of each payment. Then check the repayment against your quietest normal week. For the full conversion method, read how to convert a factor rate to APR, and for the product itself, the merchant cash advance guide.
Run your own numbers: Factor rate to APR converter
Estimated APR
125.9%
Very expensive.
- You receive
- £50,000
- You pay back
- £67,500
- Cost of the money
- £17,500
- Cost per £1 received
- £0.35
- 126 daily payments of
- £535.71
- Effective annual rate
- 251.1%
An estimate on the money you actually receive, with daily payments counted as 21 business days a month. Not an offer and not a lender's disclosure.
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Questions owners ask
Is weekly cheaper than daily?
Slightly, for the same factor rate and term. £10,000 at 1.35 over 6 months is about 126% APR paid daily and about 123% paid weekly, because you keep each pound a little longer.
Can I ask for weekly instead of daily?
You can always ask. Some funders offer both; some only offer one. Ask before you sign, because changing it later depends on the contract.
Do daily payments come out at weekends?
Usually business days only, but check the contract. Our figures assume 21 business days a month.
What about a percentage holdback?
A holdback takes a share of each day's card takings rather than a fixed amount, so it moves with your sales. See our holdback guide for how that changes the cost.