Merchant Loans

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Are you looking for a business loan? Perhaps you are looking to scale your startup so you can move onto new ventures for your company, or you need a loan to cope with an unexpected cost that your business has encountered. Whatever the reason may be, Proper Finance can help you to find the right loan for your company. Your best interests are our top priority, and we have a number of different financial products available through our reputable lenders that you can choose from. One of these options includes merchant loans. Wondering what they are? These are one of the newest products on the alternative business finance market, and in this guide, we are going to explain how they might be able to help your company become even more successful than it already is.

Merchant loans explained

These kinds of loans are particularly popular with companies that are within retail or the leisure sectors. Why? A merchant cash advance uses a card terminal in order to ‘secure’ lending, which is particularly beneficial for firms that do not have that many assets in total to otherwise secure a loan, but who do have a high number of card transactions via their business each month. The repayments are then taken away from a proportion of your business revenue. As a result, merchant loans tend to be a very popular solution for many SMEs in the UK.

Who can use merchant loans?

In term of who can get access to merchant loans, they are applicable to any firm that uses card terminals in order to take payments from their clients or customers. This is because all companies that do so will have a card terminal provider (ie. a firm that processes these transactions on their behalf). The lender providing you with this merchant loan then works with the terminal provider directly so that there is transparency and clear visibility as to what is happening, such as the exact amount of money that is flowing through your business accounts. This can be particularly advantageous if you are a new business or an SME as unlike other types of lending for businesses available on the market, there is no requirement to have a detailed look at your accounts or carry out hard credit checks to determine your eligibility.


A merchant loan could help your SME get back on track.

Through monitoring carried out by the lender in collaboration with the terminal provider, the lender can then accurately and quickly assess just how much your company makes in an average month. From that, the lender can then determine a loan amount as well as an affordable repayment plan, in a much more efficient way than other business finance options.

What are the benefits of merchant loans?

As a company, using a merchant loan has a variety of advantages that could help your firm grow. These include:

  • Flexible financing: as repayments are typically to the lenders are made as a percentage of your firm’s revenue, that means your payments are flexible. This is because the amount will go up or down depending on your business’s income for that month.
  • Freeing up other types of finance: another key advantage of merchant loans is that it essentially creates a new line of credit for your business. If you have a merchant loan, it still possible to get other kinds of finance for your firm whilst having this type of finance in place, which could be hugely useful for your company. Take for example: if you have an equipment lease already in place, you can still obtain a merchant loan to help with overall cash flow at the same time too
  • Easy repayment process: equally, another bonus of merchant loans is that repayments are affordable and stress-free. As the lender will be working directly with your company’s card terminal provider, the amount they take out for loan repayments is never in your companies bank account. Instead, it works in much the same way as income tax does. As a result, this makes loan repayments far less stressful, as you don’t need to spend time worrying about your finances and allocating money aside to pay the lender you have found through Proper Finance, helping you to spend time on other more important ventures to help your business get up and running.

How can I apply for a merchant loan?

Have you decided after reading our guide that a merchant loan may be exactly what your firm has been looking for in terms of financing? Fantastic! Proper Finance can help you find the right lender on your behalf. All you need to do is click apply now on our site, and fill out an application form. This will take only a few minutes of your precious time. After this, we can start to compare lenders for you (all of which are FCA regulated and authorised, as is the case with our own company).