Repay more in a good month,
less in a quiet one
Revenue-based funding takes a fixed share of your card takings instead of a fixed monthly payment. Takings halve in January and so does the repayment. It is built for businesses whose income moves, and for those whose card machine tells a better story than their accounts. You will also see it sold as a merchant cash advance, which is the same idea under an older name.
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What makes it different from a loan
- Repayment moves with trade
The lender takes an agreed percentage of each day’s card settlements. There is no fixed monthly amount to find, which is the whole point in a seasonal business.
- A fixed fee, not interest
You agree the total to repay up front, so the cost does not grow if you take longer. It is quoted as a fee or a factor rate, which is not an interest rate and cannot be compared with one by eye. Why that matters.
- Your takings matter more than your accounts
This is the route for a business with strong card income but thin filed accounts. Our panel wants around £5,000 a month in card takings as a starting point. £1,000 to £2 million.
- No fixed end date
Because repayment follows trade, a slow quarter stretches the term. The total does not change, but the money is on your settlements for longer, which affects what else you can borrow in the meantime.
Why clearing it faster costs you more
The fee is fixed the day you sign, so finishing early does not save a penny — it squeezes the same cost into less time. That is the opposite of how a loan behaves, and it is the thing worth understanding before you take one.
At an illustrative factor rate of 1.2 — £10,000 advanced becomes £12,000 to repay, whether that takes three months or twelve. The last column is not an APR. It is what the same fee works out at over a year if you kept renewing the advance, which is the only basis on which the comparison is fair; annualising a three-month facility you would never repeat overstates it the way a payday APR does. Real factor rates are set against your own card turnover. How this compares with a loan.
Common questions
Who is it actually for?
Retail, hospitality and anything else that takes most of its money on card. If your customers pay by invoice and bank transfer there is nothing for the lender to take a share of, and a term loan will suit you better.
Is it cheaper than a loan?
Usually not, measured per pound. You are paying for flexibility and for a lender that will look past weak accounts. Whether that is worth it depends on how badly a fixed monthly payment would hurt in a quiet month.
What is a factor rate?
A multiplier on what you borrow. Take £10,000 at a factor of 1.2 and you repay £12,000. It is not an annual rate and converting it to one needs the term, which is exactly what this product does not fix in advance.
Do I need a card terminal?
For a merchant cash advance in the strict sense, yes — the repayment is a share of card receipts, so there have to be card receipts to share. Some revenue-based funding looks at total bank turnover instead, which opens it to businesses paid by transfer. If neither fits, an unsecured loan is the straightforward answer.
Can a sole trader get one?
The advances on our panel are limited company products. Where a sole trader is turned down on structure alone it is worth looking at what else the panel would consider, and farm businesses reach further through Farmzo.
Does it need security or a personal guarantee?
No charge over an asset, because there is no asset in it — the provider is buying a slice of future receipts. A personal guarantee is still common, and the fact that something is not secured does not mean nobody can come after you. The difference, in pounds.
How is the repayment actually structured?
Usually the provider takes its percentage through your card processor, so the deduction happens before the money reaches your account. There is no fixed monthly date and no fixed end date: a strong month clears it faster, a quiet one slower, and the total you repay does not change either way.
How fast is it?
This is usually the quickest thing on our panel, with funding possible inside 24 hours, because the lender is reading your card settlement data rather than your accounts.
See whether your takings qualify
Tell us your monthly card takings in the enquiry and we will tell you honestly whether this fits.
Get my optionsWhere to next
Loan vs cash advanceA factor rate is not an interest rate, and early repayment saves nothing.Cash flow finance Back to the hubCovering the gap between paying out and being paid.Flat rate vs APRWhy a 7% flat rate costs more than a 12% APR.EligibilityThe actual gates our panel applies, not vague requirements.