A guide to Paymentsense Business FundingProduct Information, Small Business Advice 6 November 2020
What is Business Funding?
Business Funding is a flexible financing option offered by Paymentsense in partnership with YouLend.
This type of funding is specifically tailored to businesses that take card payments. It is becoming increasingly popular amongst small and medium-sized enterprises, as it offers them greater freedom to repay, based on their trading patterns.
How does it work?
Subject to certain eligibility criteria being met, you’ll receive an ‘advance’ on your future card revenues, which you repay as a fixed percentage of your daily card takings. This means that your repayments are closely aligned to your cash flow patterns.
Since the advance is only paid back as you earn, you can have the peace of mind that you’ll be able to make your repayments, even if you hit a bump in the road.
How is it different from a traditional business loan?
Business Funding differs from a traditional loan for a number of reasons. The first and biggest difference is that there are no fixed monthly repayments.
Repayments are automatically taken as an agreed percentage (also known as a sweep percentage) of your card revenue. That way, they are always in line with what is manageable for you.
For example, if you take £500 in card sales in a day and your sweep is 10%, you’ll pay back £50 that day. If the next day you take £100 in card sales, you’ll only pay back £10.
Other marked differences between Business Funding and a business loan are:
- The application process is often quicker and easier than working with traditional banks
- The approval process typically is faster, and funds are transferred within days
- The total cost of borrowing is fixed from the start and never changes – no interest or hidden fees
What range of funding is available to me?
YouLend offer advances from £1,000 to £1,000,000. So whether you’re urgently replacing a broken coffee machine or want to expand your enterprise somewhere new, they have funding for your specific business needs.
The core benefits for businesses like yours
Unlike a bank loan, repayments are based on your card takings. This means you will always repay proportionately to your earnings, ensuring that you’re always in control of your cash flow.
Quick and easy application
Access to funding through your bank can often take weeks, especially when you’re being asked to provide a large backlog of accounting data.
Because Paymentsense has a record of your card turnover and revenue history already, this speeds up the application process. In fact, you can apply in under ten minutes.
One simple, all-inclusive cost
The total cost of finance doesn’t change. You pay one fixed fee which is known from the start and never changes – no interest, hidden charges or late/early repayment fees.
No limitation on how you use the money
Often when applying for a traditional business loan, you’ll need to specify what the money will be used for. Some loans even restrict you from spending on certain things, such as inventory or equipment.
With Business Funding, you can spend the money on the things that are important to you.
Who is Business Funding for?
Business Funding can be a great solution for small or growing businesses that need fast and flexible access to capital.
It is, however, reliant on your card turnover specifically, not your overall monthly revenue. So, if you take the majority of your sales in cash, this may not be the best option for you.
It is also important to note that Business Funding is better suited to small businesses that need a shorter-term lending solution.
Cash advances typically run from six to 12 months. However, as repayments are based on your trading, you have flexibility on the overall lending time, which won’t cost you more.
With the global pandemic affecting businesses’ ability to trade freely, Business Funding is an opportunity to a secure sum of cash which you will only pay back as you earn.
This crucially means that if your business is temporarily unable to trade due to a government official lockdown, you won’t need to make any repayments until you resume trading.
How do I apply for Business Funding?
You’ll be asked to provide a few details about your business such as your merchant ID and the funding amount and repayment options.
If your application is successful, you’ll typically receive your funds into your account within three business days.
If you need more help or information on your Business Funding application you can speak to a helpful Customer Advisor on 0800 804 8109.