SumUp Raises $100 Million to Offer Merchants Cash Advances

SumUp has raised a $100 million credit facility to launch a merchant financing solution.

The British company’s Cash Advance tool offers advances of up to £20,000, based on merchants’ payment history and repayable via payment acceptance using SumUp’s card readers. 

According to a release emailed to PYMNTS, SumUp says the launch is happening “at a time when businesses are contending with a cost-of-living crisis,” providing a lifeline for dealing with emergencies or investing in their companies.

The credit facility comes from alternative investment firm Victory Park Capital and will let SumUp offer advance payments to merchants, beginning in the U.K. market before being expanded to other European countries “in the near future.”

“Our cash advance product can support business growth in a transparent and fair manner, enabling merchants to continue doing what they do best, without having to worry about accessing funds,” said SumUp Co-Founder Marc-Alexander Christ.

The launch comes at a time when many small and midsized businesses (SMBs) are seeking extra financing. Research by PYMNTS showed that 34% of SMBs do not use credit but want to do so. Fourteen percent said they have access to busi­ness credit sources and want to expand their financing. 

And Main Street SMBs with more access to financing show more confidence that their revenues will grow year over year.

“Most Main Street SMBs are unaware of or unfamiliar with the range of financing options available,” PYMNTS wrote. “This may be because they are occu­pied with their day-to-day operations, did not qualify for or were denied other financing options. It may also be that lenders have not done enough to educate SMBs. These findings suggest that Main Street SMBs remain an underexplored market for financial lenders.”

Meanwhile, PYMNTS’ Karen Webster spoke with SumUp’s Christ earlier this year about the success the company has found in serving the micro-and-nano merchant segment, which in many cases are run just by one proprietor. 

SumUp, he added, has been adding point-of-sale hardware and issuing to go with its core card reading business to provide clients with a full spectrum of services.

“Merchants are realizing that there is much more technology out there that they can embrace to help them run their businesses,” Christ said.