Dec 18, 2020

What is business funding and how do I apply?

Find out how business funding can support your business, with fast, flexible funding. 

We know how vital cash flow is when running a small business. From paying staff to ordering supplies – there's a lot to synchronise. 

That's why we've partnered with leading provider YouLend to offer business funding to our customers. In this article, you can find out what business funding is, the eligibility criteria, and how to apply in just a few minutes. 

What is business funding?

Business funding is flexible funding, tailored to small and medium-sized businesses. It's often referred to as a ‘merchant advance’, ‘merchant cash advance’ or ‘business cash advance’. 

Merchant cash advances, or business cash advances are an increasingly popular alternative to traditional bank loans because they offer business owners greater freedom and control over repayments.  

How does business funding work?

When you're accepted for business funding, you'll receive an 'advance' on your future card takings. This could range from £1,000 to £1,000,000, depending on your monthly card turnover and the amount of funding you require. 

Once you have received your advance, repayments are made as a fixed percentage of your daily card revenue. This means that you'll pay back as you earn – a little more on busy days, a little less on slower ones.

This agreed percentage is called a 'sweep' and is deducted from your daily takings automatically. For example, if you take £600 in card sales in a day and your sweep is 10%, you'll pay back £60 of your advance.

If the next day you take £200, you'll only pay back £20. If you take £0, you won't pay back anything for that trading day. 

How is business funding different from a traditional bank loan?

The first significant difference is that business funding is specifically tailored to merchants that accept card payments from a physical card machine

During the application process, YouLend takes into account your average monthly card turnover and other risk factors, to determine the funding you’re eligible for. Then you can choose the percentage rate at which you’d like to pay it back – making the repayments work for you.

The second major difference is that repayments are always proportionate to your earnings and there are no hidden charges. You’ll know upfront what you’ll pay back and this won’t ever change.

What are the benefits?

Flexible funding 

Repay proportionately to your earnings. Merchant cash advances make it easier to control cash flow during seasonal changes, or when unexpected expenses arise.

Easy and efficient application 

Unlike some more traditional loans, business funding only takes a few minutes to apply for. Simply provide a few details about your business and how much funding you would like. Once accepted, access to funding can be as fast as the same day. 

One transparent, all-inclusive cost

Once you've agreed your sweep percentage, it won't change. Neither will your total cost of funding. You'll pay off one fixed fee which you'll know from the start. No interest rates, hidden charges or late/early repayment charges. 

Freedom to spend how you choose 

Some business loans can only be used for specific things – like growth in new locations. They can be restrictive and require you to say what you'll spend the money on before you've received it. That's not the case with business funding. You'll be free to use your funding for any business purpose. 

Is business funding for me?

This type of funding is ideal for small and medium-sized merchants looking for a flexible, short-term lending solution that works with the nuances of their trading patterns.  

It's important to consider that business funding is tailored to businesses that take card payments. If you take most of your sales in cash, this funding might not suit you. 

How do I apply for business funding?

Applying is quick and straightforward. Visit the YouLend application page and sign up online in a few minutes. We'll ask for your Merchant ID, along with your monthly card revenue and desired funding amount. 

How fast can I receive my funds?

If your application is successful, you could receive your funds the same day. The typical window is three working days.