Merchant financing is a flexible and growing alternative to the traditional bank loan or overdraft for businesses that mainly make credit or debit card sales.
Merchant finance is unsecured lending. Any business taking sales on payment terminals with justifiable expectations of future sales and positive cash flow can access merchant funding, even from start-up.
You get a lump sum payment in return for an agreed percentage of future card sales.
The advance is typically used by business owners to fund new, stock and equipment or expand their premises, during seasonal cash flow fluctuations. It’s very easy to administer as repayments are automatically taken in line with card payments.
Merchant funding is relatively expensive but is much easier to access than many other forms of business finance. Business owners credit record is less important, you usually only need to demonstrate a few month card sales and asset security is rarely required.
Merchant Financing Pros
Easy to access
Easy to exit
Easy to administer
Large number of providers
Specialist available for “higher risk” sectors e.g gaming and bitcoin
Merchant financing Cons
Limited amount available
(typically no more than 3months sales)
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Serving clients across the UK