Merchant Funding

Merchant Funding What is it & How Does It Work?

Merchant Funding

Merchant Funding is a brilliant example of how finance and technology work together in the modern day. FinTech is used to deliver something useful and really clever for the UK Business Economy. This finance product for business in the UK is one of the newest and most interesting forms of alternative funding available right now for any company that takes card payments.

What is Merchant Funding, and how can it help your business?

Merchant Funding refers to an alternative to a traditional bank loan that gives the flexibility on advance payments against future credit / debit card sales. This type of funding product is most suited for consumer-facing sectors. Industry types such as Public Houses, Dentists, MOT Garages, Gyms, Vape Shops or businesses with card payment terminals. Business that require working capital for example a restaurant might need new furniture, kitchen equipment, stock or if you’re looking to refurbish. This bolt on finance product is perfect. Should your business be seasonally based say like a Florist. Most of the business comes in February for Valentines Day, cash advance for is perfect. Repayments are speed out over 18 month and mirrors your card sales making merchant services funding the right choice for business.

Merchant Funding Review

A Merchant Funding advance will mirror repayments to your cash-flow.  Repayments are only made when you receive card payments from your customers. usually a small agreed percentage of daily amount of about 7% is held back for repayments until the cash advance is paid off. Businesses can typically borrow up to 100% of monthly card sales. In month 4-6 of making repayments a top-up amount can be request of the original amount you received.

Eligibility is simple and based solely on your card sales history.  Businesses can access finance equalling its average monthly turnover of credit card transactions.

Reasons why a cash advance is a great finance product for your business:

  1. Applicants with Bad Credit are Accepted
  2. The Approval Rate is High
  3. No Credit Checks Needed
  4. Easy Application Process
  5. Simple and Hassle-Free Payback

How Does Merchant Funding Work?

Once you have qualified for a merchant loan, up-to 100% of an average month’s income as the ‘merchant funding advance’.  For example, if your credit/ debit card receipts totalled £120,000 last year from customer card sales. This works out at an average of £10,000 per month. You will then be able to receive around £10,000 as the cash advance. The repayment of this cash advance is taken as an agreed percentage of each customer transaction. This means that for a loan of £10,000, you may pay 7% of each customer card transaction towards the loan in order to pay off the balance.

Here is how it works:

  1. Decide an amount : anywhere from £5,000 – £200,000 based on your card takings history
  2. Agree on one upfront cost. No hidden charges, no interest fees
  3. Pay back the cash advance at the pre-agreed % of your card payments

Rather than a loan, this is unsecured funding by purchasing a portion of your future card sales.

This smarter funding solution provides flexibility not only catering for your existing requirements but for your future needs. You’re not tied to any fixed amount, you repay less when things are slow and more when business is flourishing.

Eligibility is simple. It is based on your card sales history. The business can access finance equalling its average monthly turnover of credit card transactions. Unsecured funding means you won’t need to use an asset such as a property to secure against borrowing.

There are no interest charges, no hidden fees. With our cash advance no check needed with with this type of borrowing as the lender will have full visibility with on the merchant account. Finance options available to your business are not restricted to traditional hight street bank business loans. Personal credit history should not have an effect on gaining business finance. With merchant funding there are no credit checks or personal guarantees required. 75% of all applications are successful and a pre-approved decision is made on average within 24hrs

Merchant Advance Funding Requirements & Costs

Merchant Advance Funding Loans are offered to all UK based limited companies, partnerships and sole traders. In order to qualify for Merchant Advance Funding you need to be using a PDQ Card Payment Terminal for credit & debit card payments. Other than these requirements, Merchant Advance Funding offers a fairly easy way to secured borrowing for many small businesses. This is opposed to your typical bank loan or overdraft from hight street banks. It must be noted that some lenders also require statements such as rent payments for credit assurance. However, the paperwork required is still usually much less invasive than a full credit check.

You will need to meet the following criteria:

  • Your business accepts card payments
  • Minimum of 6 months trading through PDQ card machine 
  • Minimum turnover of £5,000 per month through card terminals
  • No other Merchant Cash Advance in place.

What documents do I need to apply?

  • 3 months’ bank statements
  • Last 6 months’ merchant statements

Merchant Advance Funding Calculator Costs :

Funding amount: £25,000 

Repayment amount:
£32,000Factor rate: 1.28

Funding Available in 48 Hours

As everyone knows and understands gaining finance in 2020 is not an easy process. It is undoubtedly a minefield of potential problems and something you do not want to be taking risks with. This even more understandable as the future of your entire business is on the line. Don’t be put off, there are quick and safe alternative business finance solutions available to take the pressure off your cash flow within 48 hours. The process is so simple and without risk to your home. To gain Merchant Funding up-to £200,000 simply complete the online enquiry form.