Payments firm looks to offer new affordable funding option to small businesses
Previously only available in the US, Worldpay Business Finance, will use its extensive data on its customers to offer them a cash advance that will then be paid back from their future credit and debit card sales.
Worldpay will be teaming up with financial firm Liberis to provide the funding, which will allow SMEs to secure unsecured cash advance based on their future credit and debit card sales.
Customers will make payments based on a pre-agreed percentage of the business’ card transactions, so business owners only pay when they are earning, meaning there is no need to worry about meeting a regular monthly payment if business is quiet.
The flexible cash advance includes no fixed term and unlike a loan from banks and credit card companies, business owners will not face fines for failing to make a payment. Furthermore, if the advance takes longer to pay off, the originally agreed payment cost remains the same.
“We’ve been concerned that the lack of affordable funding available to Britain’s SMEs is stopping great businesses from growing and thriving. Unlike traditional loans, the flexibility of Worldpay Business Finance means that payments can be structured in a way that better suits the models of small businesses,” said Dave Hobday, UK managing director at Worldpay.
“We work with around 280,000 small businesses in the UK and they make up a large proportion of our customers, so we want to help them flourish. By letting companies access cash relating to their future earnings, we are giving them the chance to grow in line with their ambition and potential.”
Worldpay processes approximately 31 million mobile, online and in-store transactions worldwide on a typical day (equivalent to 11.5 billion per year). The company is one of a number of growing success stories in the online payments industry as more and more consumers look to ditch cash for quicker and easier transactions.
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