Is funding against your card takings worth it?
Funding that repays as a percentage of your daily takings is a genuinely different product from a bank loan, and it gets judged unfairly in both directions.
What it actually is
You take an agreed amount with a single fixed fee — not an interest rate that compounds. Repayment comes out as a fixed share of each day's card sales until the balance clears.
A quiet January costs you less per week than a busy December. That is the whole point of it.
The honest comparison
A secured bank loan will usually be cheaper on headline cost. If you qualify, can provide security, and can wait six weeks, take the bank loan.
What you are paying extra for is:
- Speed — days rather than weeks
- No security over your house
- No fixed monthly repayment to find in a bad month
- No separate application built on accounts a lender has never seen
When it makes sense
- Equipment that has failed. A dead walk-in costs you more per day than the fee.
- Stock ahead of a season you can evidence. You know the December numbers because you have last December's.
- A second site with a signed lease. Speed matters and the upside is calculable.
When it does not
- Covering a structural loss. If the business is losing money every week, funding postpones the problem and makes it larger.
- Anything you could wait two months for. Wait, and use cheaper money.
- A refit with no numbers behind it. "It'll look better" is not a repayment plan.
The test is simple. Can you point at the thing the money buys and say roughly what it returns? If not, do not take it.
Run the numbers yourself
Take the total fee, divide it by the amount advanced, and you have the real cost as a percentage. Then work out roughly how many weeks it will take to repay at your current takings. If those two numbers still look sensible next to what the money buys, it is probably worth doing.
We will tell you honestly when we think it is not.
