South African payments company Yoco has secured a $100m (approximately R1.65bn) credit facility from global investment firm Victory Park Capital to expand access to working capital for small businesses using its platform.
The facility will fund Yoco Capital, the merchant funding product built into the Yoco app, allowing the company to extend cash advances to more of the than 200,000 businesses that use its payment and business services.
Yoco says the funding will give it greater control over the financing it offers merchants, including pricing and risk management, while allowing it to develop its funding products based on its own experience with businesses.
How Yoco Capital works
Yoco Capital offers qualifying merchants cash advances based on their live sales across in-person and online payments.
There is no formal application process or collateral requirement. Eligible businesses receive a pre-approved offer through the Yoco app, which they can accept with one click. Funds are then paid into their accounts.
Advances range from R2,000 to R1.5m and are repaid through deductions from merchants' daily takings, rather than fixed monthly instalments.
Businesses can use the funding for expenses such as hiring staff, buying stock, upgrading equipment or opening additional branches.
Yoco CEO Carsten Holtkemeyer said the facility gives the company greater control over the financing layer of its business platform, which already includes payments and point-of-sale services.
R6.5bn advanced to businesses since 2018
Yoco has distributed more than R6.5bn in working capital to over 40,000 independent businesses since 2018, working with specialist SME credit providers.
The new facility marks the first time Yoco will have direct control of this funding at scale. The company says it will continue working with external funding providers where appropriate for specific products or markets.
Victory Park Capital specialises in private credit and asset-backed finance.
