What is Merchant Funding?
Merchant Funding is a flexible alternative to a traditional bank loan as it gives you an advance on predicted credit / debit card sales. It’s most suitable for consumer-facing sectors such as outlets, retailers, restaurants, online merchants or businesses with card terminals and visibility on future payment streams; those that might need new furniture, equipment, stock or if you’re looking to refurbish. It’s great for those with seasonal peaks too such as business owners who are in the hospitality industry or more niche seasonal businesses like florists.
Amount
£3,500 - £500,000
Depending on historical sales and future payment streams.
Period
Typically from three to nine
months
Cost
30% - 70% (annualised) of advance
The cost will be based on either an agreed fee or a percentage of sales.
The information above shows the terms typically associated with merchant funding. Your terms will depend on your own situation.
Merchant Funding at a Glance
Repayments matched to cash-flow
With Merchant Funding you match repayments to your cash-flow i.e. you only make repayments when you receive card payments from your customers. You can typically borrow up to 100% of monthly card sales and it can be used to top up other funding sources e.g. invoice finance.
Credit Record
You do not need a perfect credit record to secure merchant funding but you will need to accept credit/debit cards.
Repayments
Repayments are often made daily as a share of your sale, i.e. usually a small agreed percentage of daily or weekly card transactions until the revenue advance is paid off.
Personal Guarantees
A personal guarantee – an agreement that means a director takes on a certain level of personal responsibility for the debt through their own finances/assets - is often required when applying for merchant funding.
Your Resources
SME Funding Guide - Understand your Options
Want to know more about the options available to you? Click here to see our SME Funding Guide, in association with our partners at KPMG Small Business Accounting. We've compiled all the information you need to research and choose the right funding for your business, including merchant funding.
Case Study - Petals of Oban
Funding Xchange helps businesses all over the UK, to access the finance they need on the best terms available. Click here to read how we helped a Scotland florist maximise their sales during peak season.
Call us on 020 3695 9206
More questions? Just pick up the phone and give us a call. We'd be happy to help you in your research for business funding.
How to Get Merchant Funding
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quotes for your merchant funding