If you process a lot of card payments via a card machine, you can take out a PDQ loan against your sales. Find out more about how PDQ funding works and whether it's the right choice for your business.
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Cash flow can make or break your business, especially when you need to cover unexpected expenses, invest in stock, or ride out seasonal fluctuations. When you’re feeling the pinch, PDQ funding (sometimes called PDQ loans) offers a fast and flexible way to secure short-term finance against your card sales.
But what exactly is it, and how does it compare to more traditional small business loans? Let’s explore how PDQ funding works, who qualifies, and whether it could be the right fit for your needs.
PDQ funding stands for "Process Data Quickly", though the term has come to describe a specific type of finance more commonly known as a merchant cash advance.
PDQ funding lets you borrow a lump sum against future card sales through your card terminal, or PDQ machine. In return, you repay the advance as a percentage of your daily card takings. This means you repay more during busy periods and less during quieter times.
Unlike traditional loans, there’s no fixed monthly repayment. This makes it especially attractive to businesses with fluctuating, seasonal income, such as those in hospitality or retail.
It’s not technically a loan, which is why you won’t usually see interest rates. Instead, providers apply a "factor rate" – a multiplier used to calculate the total repayment amount upfront (for example, with a factor rate of 1.3: borrow £10,000, repay £13,000 – more on this below).
You don’t need a perfect credit score to qualify for PDQ funding. What you do need, however, is to be trading and taking regular card payments. Most providers look for:
This kind of funding often works for businesses that may struggle to get a loan from the bank, but have strong, regular card sales.
Applying for PDQ loans or PDQ funding is typically faster and less paperwork-heavy than traditional finance. To apply, you’ll usually need:
Many alternative lenders that specialise in merchant cash advances can approve applications within 24 to 48 hours.
The speed of the process is really up to you. The faster you provide the necessary information, the faster you’ll see funds hit your account.
One of the main attractions of PDQ funding is its flexibility. Repayments are taken automatically as a percentage of your daily card sales. In other words, there’s no fixed repayment schedule.
However, it’s important to understand how costs are calculated. Rather than using an interest rate or APR, lenders apply a factor rate, which is typically between 1.1 and 1.5. So if you borrow £10,000 with a factor rate of 1.3, you’ll repay £13,000 in total.
Before signing anything, take the time to calculate the total repayment amount and consider how it aligns with your expected sales.
One of the biggest benefits of PDQ funding is speed. If your documents are in order, you could receive funds within 24 to 48 hours of approval.
This is much faster than most traditional bank loans, which can take days or even weeks to process. That speed makes PDQ funding especially useful when you need working capital in a hurry.
Wondering whether to choose PDQ funding or a standard business loan? The right answer in your case depends on your cash flow patterns and how predictable your income is.
PDQ funding:
Small business loans:
If your revenue dips and rises frequently month to month, PDQ funding may offer more breathing room. But if you can handle a fixed repayment and qualify for favourable terms, a business loan is probably more cost-effective.
In general, PDQ funding has minimal impact on your business credit score (as long as you repay as agreed, of course). Most merchant cash advance providers don’t report to credit bureaus unless you default.
That said, successfully managing this type of finance can strengthen your case for future funding by showing that your business is reliable and consistent.
If you’re just getting started, PDQ funding is probably not the best fit. Most providers require at least a few months of trading history and regular card sales to qualify.
Startups without a strong sales track record would struggle to meet the criteria.
Alternative funding options such as startup grants, crowdfunding, or startup loans (i.e. short-term loans from lenders who cater to early-stage businesses) may be a better starting point.
Every funding option has its upsides and trade-offs. Here's how PDQ funding stacks up.
While reputable providers should be upfront about costs, it’s always wise to read the small print. Things to look out for include understanding the factor rate used to calculate your total repayment, whether early repayment results in any savings and any setup or administrative fees.
PDQ funding isn’t the only option if you’re looking for fast, short-term finance. Here are a few alternatives worth considering:
Each option has its pros and cons, so it’s worth comparing them carefully based on your specific cash flow needs and repayment ability.
PDQ funding can be a powerful tool when used wisely. It’s fast, flexible, and often more accessible than traditional loans, especially for businesses that rely heavily on card payments. But it’s also more expensive in the long run, so understanding the total cost and ensuring it fits your business model is essential.
If your income is steady and you need quick access to cash without the hassle of bank paperwork, PDQ loans or merchant cash advances might be the answer, but other options can provide more flexibility.
If you’re looking for more control and fewer strings, iwoca’s Flexi-Loan could be a better fit.
So before making your choice, look at all the options. A PDQ loan might be right for you, but it’s not the only choice when you need quick access to cash.
If you think a more flexible, unsecured loan is the better option for your business, take a look at an iwoca Flexi-Loan. Apply for a Flexi-Loan today.
