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Merchant loans

Looking to grow your business? Or just need a little extra working capital to keep your business moving? 

Our small business loans are available between £5,000 – £500,000 for almost any purpose.

We’re not a bank. Our lending criteria is different, and we look at more than just your credit profile.

Check your eligibility online in just two minutes, with no impact on your credit score, and you could receive your funds in as little as 24 hours.

How does the business loan work?

Unlike a traditional loan, Capify’s is paid back in very small amounts regularly. The repayments are completely automated so you don’t need to do anything. Many business owners love our regular payments, because they don’t have to save a large amount by a fixed date each month.

To be eligible for a business loan, you'll need to:

  • Turnover >£10,000 per month
  • Have at least 12 months’ trading records

The benefits of a Capify business loan

  • Raise from £5,000 - £500,000
  • Pay back little and often
  • No monthly lump sum
  • Opportunity to raise more funds

Loans for Merchants

The UK is full of small to medium sized merchants, all of which contribute enormously the UK’s economy. The small business market is full of pitfalls and challenges that can make or break a small business owner’s success. As a merchant you know what your business does, and you know that it can take investment to keep up with the market and stay ahead of the competition. This is where merchant loans come into the equation. They can form an important part of growing a small business, and are designed specifically with merchants in mind.

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What is a merchant?

The nature of the merchant has changed in recent years, with the internet and eCommerce developing into a major part of the way customers like to shop. A merchant operates with an acquiring bank to apply for and open a merchant account. This is a special type of account that enables the merchant to accept credit and debit card payments. Whenever a customer makes a purchase via credit or debit card, the transaction information is submitted to the acquiring bank by the merchant. It is then passed through the card association network to the card holder’s issuing bank. The issuing bank will either approve or decline the charge, and bill the cardholder for the amount due to the merchant. This is the process that all happens in a few seconds while you are waiting for a payment to be approved, either online or at a chip and PIN machine. Learn more here.

What are merchant loans?

A merchant loan is a loan offered to businesses or ‘merchants’ that offer customers the option to purchase by credit or debit card, usually as the primary payment method. When you think about a merchant, consider things like retail stores, restaurants, and the like. A merchant cash advance is a prime example of a specialist loan aimed directly at merchants, with a repayment process that is based entirely on revenue through credit and debit card payments by customers.

What is a merchant cash advance?

A merchant cash advance is a kind of business loan that can be obtained on the basis of a business’ monthly revenue. The more money you make each month, the larger your potential MCA could be. Repayment is usually made over the short-term, and doesn’t involve APR like a conventional loan. Instead, you are issued with a ‘factor rate’, which typically stands at something between 1.2 and 1.5. This means that if you receive a loan of £10,000, you will repay between £12,000 and £15,000, and this will be the same no matter how quickly you make the repayments. It is generally more expensive than a conventional business loan but can be easier and quicker to obtain, even if you have poor credit.

Reasons merchants might need finance

There are many reasons a merchant might be in need of finance. These can include:

 

  • Purchasing new stock
  • Refurbishing premises
  • Hiring/training staff
  • Growing the business
  • Disaster management
  • Investing in new technology

 

Obtaining finance is a common part of business because you need to invest money to grow and evolve. If a merchant struggles to self-fund any new endeavour, then loans for merchants are the natural way to go.

UK merchants and card processing in the UK

At the end of 2018, there were more than 5.6 million small businesses in the UK. A large proportion of these are merchants in industries like retail and hospitality, producing a gross annual turnover of £1.9 trillion. Cash transactions are consistently falling, and debit card payments have been the most common method of paymentsince 2016 – a trend which has only increased in the years since. More than 50% of all merchant transactions are done with debit or credit cards in 2019, which is why merchant cash advances are growing as a means of small businesses obtaining finance.

Capify's merchant loans and finance

Capify is proud to offer merchant cash advances to small businesses in the UK. We’ve been doing it for 10 years, and have been one of the pioneers of this type of finance. Our Merchant Cash Advance is an option even for companies with poor credit because we take a more holistic approach to assessing a company’s financial merit. Our eligibility criteria simply requires you to have been trading for 6+ months, and to be taking £5,000+ per month in card transactions. Visit our MCA product page to learn more.

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