How Merchant Financing Works

Topic: Merchant Finance (Fri 20th Mar 2020)
How Merchant Financing Works

What providers do you use?

We are a merchant brokerage and agnostic to the process of selecting a finance partner for your business. We determine the most appropriate for your specific situation.

Every finance company has a different process, terms and aspects of working with acquirers. Our job is to help you navigate this.

How am I pay the finance back?

Acting as your broker, we will work with you to agree and determine a (%) of card sales to be taken from each card payment. Maximum is 20% of card value.

For example, If you processed £1,000 in Visa and Mastercard sales with a 10% repayment, this means you will be funded £900 and the financer receives £100 in capitol and interest.

Our job is to work with you and negotiate with the bank to find a balance. Lowest can be 3% of card sales but will take longer to pay off.

Repayments are reduced in slow sales periods and increased in higher sales months

How much am I charged?

Merchant finance providers will charge clients what is known as a ‘factor rate’. Typically, this is between 1.1 and 1.27.

If you agree a factor rate of 1.15, and borrow £10,000, you’ll need to pay back £11,500.

This is fixed so if you experience a longer than usual downturn in sales, there is no additional interest to pay.

How do I apply?

The first step is to speak with an account manager to determine finance required. We can then broker a deal for you.

Minimum requirement is 3 months merchant statements to see the average card turnover to base the loan on.

Once you are happy with the quote, we will require for underwriting;


- 3 months bank statements (1 month for finance under £15k)
- ID
- Premise lease or proof of mortgage
- Management accounts (for finance above £30k)

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