YouLend Loan: is revenue-based finance right for your business?

YouLend is one of the UK’s leading providers of merchant cash advances, working with online platforms, brokers and small businesses. YouLend loans are revenue-based financing options designed for businesses that rely on card sales. This type of funding can help with everything from purchasing stock to easing cash flow gaps during slower months.

Revenue-based finance has the advantage that it’s tied to your business revenue, with repayments taken as a percentage of your sales, which can be convenient for businesses that have variable cash flow.

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What is a YouLend loan?

YouLend provides merchant cash advances (MCAs), which are a form of revenue-based financing. 

Rather than offering a traditional loan with fixed monthly repayments, YouLend allows you to repay the loan as a percentage of your daily card sales. This means repayments automatically adjust based on your revenue—so if you have a slower month, you’ll pay less, and if business is booming, you’ll repay more​​.

Here’s a quick overview of YouLend’s offering:

• Loan amounts: YouLend offers businesses financing between £3,000 and £1 million, depending on your card sales volume​.
• Repayments: Repayments are a fixed percentage of your card sales, which means no set monthly payment.
• Approval speed: YouLend offers fast approval and funding—often within 48 hours of applying​.

Advantages of YouLend loans

YouLend’s merchant cash advance model comes with several advantages, particularly for businesses that have seasonal or fluctuating revenues. Here are some of the key benefits:

1. Repayments that scale with your business: Because repayments are based on a percentage of daily card sales, you won’t need to worry about making fixed monthly payments during slow periods​.
2. Fast access to funds: As a digital lender, YouLend offers fast turnarounds for financing, meaning you could receive funds within 48 hours.
3. Minimal paperwork: The application process is straightforward, and many businesses can connect their bank accounts digitally using open banking tools, speeding up the approval process​.

Drawbacks of YouLend loans

While YouLend has clear benefits, its merchant cash advance model might not be the best fit for every business. Here are some things to consider before applying:

1. Dependent on card sales: YouLend's repayment model is based solely on card sales. If your business doesn’t rely heavily on card transactions or has inconsistent card revenues, this could be limiting. Businesses with mixed payment streams (cash, bank transfers, etc.) might not benefit as much from YouLend’s model​.
2. Higher cost: Merchant cash advances, including YouLend’s, often come with higher overall fees compared to traditional loans, which can raise the total cost of borrowing.
3. Limited flexibility: While YouLend offers flexibility in repayments, the funding is tied to digital revenue. If your income streams are more diverse or you want the freedom to decide how and when to repay, this model might feel restrictive​.
4. Limited repayment control: While the percentage repayment model scales with your revenue, there may be scenarios where it could be easier to plan around a fixed amount, especially in higher revenue months where you want to keep more of your revenue.  

Alternatives to YouLend loans

While YouLend’s merchant cash advance (MCA) model offers a flexible way to finance your business, there are scenarios where other forms of financing might be more appropriate. 

1. Iwoca Flexi-Loan

Over 90,000+ businesses have used an iwoca Flexi-Loan to grow and manage their cash flow. Our unsecured, short-term business loan gives you quick access to funds, with full transparency over fees and repayments. 

• Flexible borrowing amounts: iwoca offers loans up to £1 million, making it ideal whether you need a small cash boost or a larger injection of capital​.
• Fixed repayments: iwoca offers fixed repayment schedules, which can help you manage cash flow and budget more predictably. You’ll know exactly how much you need to repay each month, avoiding fluctuations.
• Broader eligibility: iwoca bases its lending decisions on your overall business performance, making it accessible to businesses with mixed or non-card revenue streams​.
• Early repayment without penalties: If you’re able to repay your loan early, you can do so without any additional charges, helping you reduce your interest if your cash flow improves​.
• Fast funding: You can receive a decision within hours and get your funds as soon as the next business day, ensuring you have quick access to capital when you need it​.

2. Business line of credit

If you need ongoing access to capital rather than a lump sum, a business line of credit might be a better fit. This gives you access to funds as and when you need them, allowing you to draw down on an agreed limit. Repayments are only required on the amount you borrow, making it a flexible option for businesses with fluctuating needs.

3. Invoice financing

For businesses that invoice their clients and are waiting on payments, invoice financing can help unlock cash tied up in unpaid invoices. This type of finance allows you to borrow against your outstanding invoices, giving you quick access to funds while waiting for your customers to pay.

4. Asset-based lending

If your business owns valuable assets like machinery or equipment, you could leverage them through asset-based lending. This option allows you to borrow against the value of your assets while continuing to use them in your business. It’s an ideal solution for businesses with high-value assets looking to unlock liquidity that you can use right now.

Making the right choice for your business 

To summarise, YouLend's merchant cash advance works well for businesses that experience fluctuating or seasonal revenue, particularly those that rely heavily on card sales, such as retail stores, cafes, or e-commerce businesses. 

However, YouLend might not be the best fit for businesses with more diverse revenue streams or those that need predictable repayments for better budgeting. In cases where you have non-card revenue or require larger, long-term financing, something like an iwoca Flexi-Loan can offer fixed repayments, no early repayment penalties, and broader eligibility. 

Find out how much you could borrow today with our small business loans calculator.