How much can I borrow with a merchant loan?
By Helm, Funding Specialist
- Most providers offer 1 to 1.5 times your monthly card turnover
- Higher card revenue means a larger potential advance
- Your industry and trading consistency also affect the offer
- First-time borrowers may receive lower amounts initially
- Top-ups and renewals can unlock larger amounts over time
One of the first questions business owners ask about merchant loans is how much they can borrow. Unlike bank loans where the amount is based on your credit profile and assets, a merchant loan amount is determined by your card transaction revenue.
This guide explains exactly how providers calculate your offer and what you can do to maximise the amount available to you.
How the amount is calculated
Merchant loan providers use your monthly card transaction data to determine how much they can offer. The standard formula is between one and one-and-a-half times your average monthly card revenue.
For example, if your business processes £15,000 per month in card payments, you could typically access between £15,000 and £22,500.
| Monthly Card Revenue | Minimum Offer (1x) | Maximum Offer (1.5x) |
|---|---|---|
| £10,000 | £10,000 | £7,500 |
| £10,000 | £10,000 | £15,000 |
| £20,000 | £20,000 | £30,000 |
| £50,000 | £50,000 | £75,000 |
| £100,000 | £100,000 | £150,000 |
What factors affect the amount?
While card revenue is the primary factor, several other things can influence the amount you are offered.
- Consistency of your card revenue month to month
- Length of your trading history
- Your industry and its perceived risk level
- Whether you have existing merchant loans or advances
- Your repayment track record on previous advances
- The provider's own lending criteria and appetite
First advance vs subsequent advances
First-time borrowers may receive a more conservative offer while the provider assesses their reliability. This is normal and should not be seen as a negative.
Once you have repaid your first advance successfully, most providers will offer larger amounts on subsequent advances. Your repayment track record demonstrates that your business can handle the funding, and your card revenue data provides more confidence.
Can you increase your amount?
Yes. There are several ways to access larger amounts over time.
- Grow your card revenue by encouraging more customers to pay by card
- Build a strong repayment track record with your provider
- Request a top-up once you have repaid 50 to 70 percent of your current advance
- Switch providers if another offers a more competitive amount
- Wait for your card revenue to increase naturally through business growth
Should you borrow the maximum amount?
Not necessarily. Borrowing the maximum means higher daily repayment deductions, which can put pressure on your cash flow. Only borrow what you genuinely need and can comfortably repay.
A good approach is to calculate the daily repayment impact at different advance amounts and choose the one that leaves you with enough working capital for day-to-day operations.
Frequently asked questions
Can I borrow more than my monthly card revenue?
Some providers may offer up to 1.5 times your monthly card revenue. Going beyond this is unusual and may result in higher costs.
Does my bank balance affect the amount?
Your bank balance is not typically the primary factor. Providers focus on your card transaction revenue. However, a healthy bank balance can support your application.
Can I get a larger amount by using multiple providers?
While possible, stacking advances from multiple providers is risky and not recommended. The combined repayment percentages can damage your cash flow.
How quickly can I get a top-up?
Most providers offer top-ups once you have repaid 50 to 70 percent of your current advance. The top-up process is usually faster than the original application.