Global fintech SumUp is making a push into merchant financing with the launch of SumUp Cash Advance – and it has raised a US$100m credit facility to help support the rollout.
The cash advances of up to £20,000 are based on merchants’ payment history and are repaid via payment acceptance through SumUp’s card readers. Merchants pay a fixed fee for access to the advances, so they don’t have to worry about spiralling monthly interest.
SumUp Cash Advance is being rolled out now and is supported by a US$100m credit facility from alternative investment firm Victory Park Capital (VPC). The credit facility will allow SumUp to offer advance payments to merchants, starting in the UK market before being expanded to other European countries “in the near future”.
SumUp claims that, “at a time when businesses are contending with a cost-of-living crisis”, the advances will provide a lifeline for dealing with emergencies – such as unexpected equipment breakdowns – or investing in their business, like procuring inventory or capitalising on growth opportunities.
It is one of a number of newly launched fintech solutions to the cost-of-living crisis aimed at both individuals – in the form of salary advances – and businesses, with several new credit products reaching the market. The need is not exclusive to Europe, either; last week, Hong Kong-based fintech startup Micro Connect raised more than US$450m in funding to connect small and micro-sized businesses in China with access to working capital.
‘Simplicity’ of SumUp Cash Advance stands out
Because the cash advance product is based on prior payment history and repaid through card reader sales, the latest offering should offer a seamless way for businesses to get extra funds that doesn't become unaffordable.
SumUp Co-Founder Marc-Alexander Christ says: “Since SumUp launched in 2012, we have witnessed a transformative evolution in merchant needs. In response, we have continually invested in new, sector-leading innovations, from pioneering hardware to cutting-edge software solutions. We are thrilled to partner with Victory Park Capital, further enabling our mission of simplifying business operations for our merchants.
“Our cash advance product can support business growth in a transparent and fair manner, enabling merchants to continue doing what they do best, without having to worry about accessing funds. Feedback has been positive to date; merchants appreciate the simplicity of the product, the speed of payout, and its convenient way of paying back the cash advance via card reader sales.”
Jason Brown, Partner at VPC, continues: “We are dedicated to supporting forward-thinking, innovative companies that enable wider access to financing solutions for small businesses. SumUp is a global fintech leader with a data-driven approach and product suite that matches the needs of modern businesses. We are delighted to partner with SumUp as they expand their offering and provide merchants with fair and clear short-term financing amidst a challenging market climate.”
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