Card machine loan vs business loan: which should you choose?
By Helm, Funding Specialist
- Card machine loans are faster and more accessible
- Business loans are typically cheaper on total cost
- Card machine loans flex with your revenue
- Business loans have fixed monthly payments
- The best choice depends on your priorities
If you need funding for your business, understanding the difference between a card machine loan and a traditional business loan is essential. Both provide capital, but the speed, cost, eligibility, and repayment structure are very different.
Side-by-side comparison
Here is how the two options compare.
| Feature | Card Machine Loan | Business Loan |
|---|---|---|
| Speed | 24 to 48 hours | 2 to 8 weeks |
| Repayment | % of daily card sales | Fixed monthly |
| Cost | Factor rate 1.15 to 1.50 | 4% to 30% APR |
| Collateral | None | Often required |
| Personal guarantee | Not required | Usually required |
| Credit check | Soft check | Full check |
| Minimum history | 3 months | 1 to 2 years |
| Best for | Speed, flexibility, poor credit | Low cost, large amounts |
When to choose a card machine loan
A card machine loan is the better choice when:
- You need funding within 48 hours
- Your credit score is poor
- You want to avoid personal guarantees
- Your revenue is seasonal or variable
- You prefer automatic, flexible repayments
When to choose a business loan
A traditional business loan is the better choice when:
- You have strong credit and can qualify for competitive rates
- You have time to wait for approval
- You want the lowest possible total cost
- You need a large amount (over £100,000)
- You prefer predictable fixed monthly payments
Cost comparison
For a £15,000 funding need:
| Card Machine Loan (1.25) | Business Loan (12% APR, 2yr) | |
|---|---|---|
| Amount received | £15,000 | £15,000 |
| Total repayment | £18,750 | £16,932 |
| Total cost | £3,750 | £1,932 |
| Time to arrange | 24 to 48 hours | 2 to 6 weeks |
| Monthly/daily payment | ~£62/day (varies) | £706/month fixed |
Frequently asked questions
Can I have both at the same time?
Yes. Having a business loan does not prevent you from getting a card machine loan. Just ensure combined repayments are manageable.
Which has a higher approval rate?
Card machine loans have significantly higher approval rates because they focus on card revenue rather than credit scores.
Which is better for seasonal businesses?
Card machine loans, because repayments flex with your daily card revenue. Fixed business loan payments do not adjust.
Can I switch from one to the other?
You can take out either product at any time. If you currently have a business loan, you can still apply for a card machine loan, and vice versa.