365 Finance Revenue-Based Lending for Small Businesses

Small business owners looking for funding often hit the same wall: traditional loans demand fixed monthly repayments that bear no relation to how the business is actually trading. 365 Finance takes a different approach with its revenue-based lending facility, where repayments rise and fall in line with your turnover.

This type of funding has gained ground among UK businesses that process customer card payments and want a more flexible alternative to a conventional business loan. Rather than committing to a rigid schedule, you repay a set percentage of your daily or weekly card revenue until the agreed total is cleared.

For businesses with fluctuating income, that can make the difference between manageable debt and a repayment commitment that strains cash flow during slower months. This article breaks down how 365 Finance revenue-based lending works, where it delivers real value, and where the trade-offs sit.

How Revenue-Based Lending from 365 Finance Works

365 Finance provides an unsecured funding advance, usually between £10,000 and £500,000, to UK limited companies and LLPs that take customer payments via card terminals. The lender advances a lump sum and recovers it by taking a small, fixed percentage of your daily or weekly card sales until the full agreed amount is repaid.

There is no fixed repayment term in the traditional sense. If your card takings dip, the amount you repay that week drops too. If sales spike, you clear the balance faster. The repayment percentage is agreed upfront and does not change, so you always know what share of each transaction goes towards settling the facility.

Funding decisions are driven primarily by your trading history and card turnover rather than credit scores alone. 365 Finance connects to your card terminal or payment gateway to assess revenue patterns, which means the underwriting process can be faster than a conventional bank loan. In many cases, approved businesses receive funds within 24 hours.

Which Businesses This Funding Suits Best

Revenue-based lending works well for businesses where card payments form a meaningful slice of income. Retailers, restaurants, pubs, salons, and hospitality venues are natural fits because their card terminal data tells a clear and verifiable revenue story.

Seasonal businesses also tend to benefit. A holiday park, an ice cream chain, or a Christmas pop-up operation may find conventional fixed repayments punishing during off-peak months. Because repayments here scale with revenue, the quieter periods feel less squeezed.

Service businesses with steady card turnover, such as dental practices, vets, and auto repair shops, can also use this facility to fund refurbishments, new equipment, or marketing without disrupting working capital. However, businesses that generate most of their revenue through invoices, cash, or bank transfers will struggle to qualify, since the lender relies on card terminal data to underwrite and collect.

Practical Benefits Worth Highlighting

The most obvious advantage is repayment flexibility. You are not locked into a fixed monthly debit that ignores how your business performed that month. This alignment between income and outgoings can reduce the anxiety that comes with traditional loan servicing.

Speed is another factor that matters to time-sensitive opportunities. Because 365 Finance uses card terminal data for underwriting, the application process is lighter on paperwork than a bank loan or asset finance arrangement. Decisions can come through quickly, and funding often lands within days rather than weeks.

The facility is unsecured, which means you are not putting up property, vehicles, or other hard assets as collateral. For business owners who do not own commercial property or who prefer not to risk personal assets, this is a meaningful point of difference from secured lending options.

Cost clarity also deserves a mention. The total repayment amount is agreed at the outset, expressed as a fixed interest rate rather than a fluctuating interest rate. You know exactly what you will repay, and the percentage taken from each card transaction does not change over the life of the facility.

Drawbacks and Points to Consider

Revenue-based lending is rarely the cheapest way to borrow. The fixed interest rate structure means the effective cost of capital can be higher than a standard business loan or overdraft, particularly if you repay early. Businesses with strong credit profiles and assets may find better pricing elsewhere.

The facility is tethered to your card terminal. If you switch payment processor mid-term, the repayment mechanism can break, and you may face complications or early settlement charges. You should check how 365 Finance handles such changes before committing.

Because repayments are taken as a percentage of revenue before you see the money, your gross cash flow will feel the pinch every trading day. This is different from a loan where you make one monthly payment and otherwise operate freely. Businesses operating on thin margins need to model the impact carefully.

There is also a ceiling on how much you can borrow, tied to your monthly card turnover. If you need a larger sum than your terminal data supports, this facility will not stretch to meet it, and you may need to look at secured or multi-product funding routes instead.

How Revenue-Based Lending Compares With Other Funding

Compared to a traditional unsecured business loan, revenue-based lending offers more repayment flexibility but usually at a higher cost. A fixed-term loan may suit a business with predictable, steady revenue that can comfortably handle a set monthly repayment and wants the lowest possible interest rate.

Against a merchant cash advance, the two products look similar on the surface. Both collect repayments as a share of card takings. The key difference often lies in fee structure and transparency. 365 Finance presents its cost as a single fixed interest rate rather than a factor rate, which some business owners find easier to understand and compare.

A revolving credit facility or business overdraft might suit a company that wants ongoing access to funds rather than a one-off lump sum. Revenue-based lending is better suited to a defined funding need, such as a refurbishment, stock buy, or short-term bridging requirement, where the business wants to draw once and repay organically.

What to Check Before Applying

Before you sign, get clarity on the total repayment amount and how it translates into an annualised cost. Ask 365 Finance for a straightforward breakdown of the interest rate structure so you can compare it against other quotes on a like-for-like basis.

Check the percentage of daily or weekly card takings that will be deducted and model what that looks like across a quiet month and a busy month. Make sure your gross margins can absorb the deduction without leaving you short on rent, wages, or supplier payments.

Also confirm what happens if you want to settle early, switch card processors, or close the business. Early settlement terms, portability of the facility, and settlement on closure are three areas where surprises can crop up if you do not ask the questions upfront.

Finally, ensure that your card turnover is sufficient for the amount you want to borrow. The lender will set a maximum based on your trading data, and applying for more than that threshold is unlikely to succeed.

Is This the Right Funding Option for Your Business?

365 Finance revenue-based lending works best for UK small businesses that take a high proportion of revenue through card payments and want a flexible, unsecured funding option that moves with their sales. Retailers, hospitality operators, and seasonal traders are among the strongest candidates.

It is less suited to businesses with low card turnover, those seeking the absolute lowest cost of capital, or companies that need ongoing revolving credit rather than a single advance. If your business relies on invoicing, cash, or B2B bank transfers, this facility will be difficult to access and a poor operational fit.

For the right profile, the combination of speed, flexibility, and no asset security requirement makes it worth serious consideration. The sensible approach is to compare the total cost against alternative funding routes, test the repayment mechanics against your own trading patterns, and only proceed if the numbers work across a full trading cycle.