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Merchant Capital Business Loan Review 2022

Merchant Capital

Merchant Capital Summary

Merchant Capital is a Johannesburg-based fintech lender founded in 2012. Merchant Capital primarily focuses on providing loans to South African businesses in the retail industry.

Eligible applicants:


There are 2 ways of Applying for Merchant Capital Business Financing:

1. Online:

Applications can be done within a few minutes on their website by filling in a simple form provided, requiring:

  • your contact details
  • card, cash and EFT monthly turnovers
  • company and personal details

Once done, you will immediately receive an email guiding you on the next steps of your application and also advising you of any other documents needed.

2. Face to Face:

Alternatively, you might prefer to discuss things in person, in which case a Merchant Capital sales executive will assist you with the application process.

If you have a complete set of all the required documents, the average application turnaround time is 24 to 48 hours.

How much do I qualify for?

It is safe to say you can qualify for up to 100% of your business’s average monthly credit and debit card turnover. However, Merchant Capital analyzes your statement and comes back to you with a more accurate qualification amount.

Contact references and credit checks

  • Merchant Capital provides unsecured funding solutions, therefore, to make responsible lending they run a personal credit check. However, you don’t necessarily need a perfect credit record to qualify.
  • They also do check with the contact references you provided to check if your business is worth credit.

How will I repay the Merchant Capital cash advanced?

The Merchant cash advance has no standard pricing model for paying back the funds. Because of the uniqueness of businesses, there are two options for Merchant Capital Cash Advance repayments:

1. Percentage of credit card sales:

Merchant Capital may automatically deduct a percentage of your credit or debit card sales until the agreed-upon amount has been repaid in full.

Since your sales can fluctuate, the speed with which the loan is repaid could be longer or shorter than expected.

2. Fixed daily withdrawals

Alternatively, a daily debit order provides the opportunity to know exactly how much you are paying back on a daily basis, rather than paying a large single sum at month-end. The debit order amount is set based on your business’s revenue.

How long does it take to qualify for Merchant Capital refinance?

Once you have paid back 70% of your facility, you may qualify for a re-advance. This time around, you will only need to provide the updated statements and your refinancing is processed.

Should you have not taken the full amount you originally qualified for, you can ‘top-up’ your Merchant Capital Cash Advance at any point in your funding cycle.

Some of the eligible retail industries:

  • Building and Hardware store
  • Butchery
  • Electronic Stores
  • Fuel stations
  • Hair beauty salons
  • Liquor stores
  • Nursery
  • Supermarkets
  • Restaurants and Fast foods

Merchant Capital Competitive Advantages

When sales are down, repayments also go down

When the repayment schedule is based on a fixed percentage of your sales, repayments adjust based on how well your business is doing.

This means that if you don’t trade, you don’t pay. On the other hand, during your busier times, you repay the advanced funds much faster.

No collateral

The Merchant Capital cash advancements are unsecured, meaning you don’t have to forfeit any personal or business assets if your sales plunge and you fail to repay the funds.

Refinancing is available

Once 70% of your facility has been paid back, you qualify for a re-advance.

Merchant Capital Competitive Disadvantages

There’s a debt-cycle danger

The Merchant Capital refinancing option traps a lot of businesses into staying in debt. The business is more vulnerable if you don’t qualify for other types of financing.

High total cost of borrowing

The total annual borrowing cost with all fees and interest included, is typically above 15%, which is far more expensive than traditional lenders.

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