FinTech: SumUp Amasses $100M Firepower To Lend To UK Merchants

August 10, 2023 | FinTech, News

The SumUp Cash Advance product is popular with merchants facing the difficult economic environment in the UK.

SumUp has introduced a novel cash advance solution for merchants to address the escalating costs of running their businesses. This offering, known as SumUp Cash Advance, involves the repayment of advances through transactions carried out on SumUp’s card readers. To facilitate the launch and implementation of this initiative, SumUp has secured a credit facility of $100 million from Victory Park Capital (VPC), an alternative investment firm.

Merchants can access cash advances of up to £20,000 based on their historical payment records. These advances are repaid via the utilization of SumUp’s card reader system. Instead of concerning themselves with potentially soaring monthly interest rates, merchants are charged a fixed fee for the privilege of accessing these advances. (FinTech)

This new venture, SumUp Cash Advance, is being introduced gradually, beginning in the UK market. There are plans to expand the service to other European countries in the coming times, with VPC’s credit facility playing a crucial role in supporting this expansion.

SumUp’s rationale behind this offering is to provide a lifeline to businesses grappling with the current cost-of-living crisis. These cash advances can be instrumental in addressing unexpected emergencies or seizing growth opportunities, such as equipment breakdowns or business expansion efforts.

A notable aspect of SumUp Cash Advance is its simplicity. Leveraging merchants’ past payment histories and repaying the advances through card reader sales streamlines the process, ensuring that businesses can access additional funds without placing an undue financial burden on themselves.

Marc-Alexander Christ, Co-Founder of SumUp, said the company’s cash advance solution facilitates the expansion of businesses in a clear and equitable fashion, empowering merchants to focus on their core strengths without concerns about fund availability. Merchants appreciated the product’s straightforwardness and rapid disbursement, as well as the convenient method of repaying the advance through sales made via card readers.

Earlier this month, Petal, a credit card and financial technology company, secured a $200 million debt facility from Victory Park Capital. Additionally, Petal obtained a new term loan facility with Trinity Capital (NASDAQ: TRIN) for up to $20 million and raised $20 million in equity funding from existing investors. Petal’s unique approach to creditworthiness, known as cash flow underwriting, allows consumers without credit scores to qualify for credit cards based on their banking history. This has enabled more than 400,000 consumers to access high-quality Visa credit cards.

Related Story:  Credit Card Fintech Petal Amasses $240M In Debt And Equity To Expand Credit Card Biz

Image Credit:  SumUp

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