Yoco, a South African fintech, has secured a $100 million credit facility from US investment firm Victory Park Capital to expand its small-business cash advances operation and take greater control of the financing offered through its payments platform.
The deal marks a new phase for Yoco Capital, which has advanced more than R6.5 billion ($395 million) to over 40,000 merchants since 2018, working with specialist credit providers. The new facility is expected to give Yoco greater control over the pricing and risk of its merchant loans as it scales the business.
The bigger bet is that transaction data generated by merchants using Yoco’s card machines and online payment tools can help the company assess businesses that traditional lenders may struggle to evaluate. If that data advantage holds, Yoco could turn its payments relationship with more than 200,000 businesses into a larger cash advance operation, while testing whether its model can remain profitable as it scales.
Yoco Capital, a data-driven funding for small businesses, provides working capital advances to merchants already using the platform. Rather than requiring an application, eligible offers appear in its app after merchants are assessed using live sales data from in-person and online payments. Advances range from R2,000 ($122) to R1.5 million ($91,185), with no collateral required.
Yoco automatically deducts repayments from a merchant’s daily takings rather than requiring fixed monthly instalments. The model is designed to make repayments move with sales, although it raises questions about how merchants fare when revenue falls, or trading becomes unpredictable.
“We have spent a decade building an operating system that runs a merchant’s whole business, payments, point of sale, and now the decisions in between. Financing was the one layer we didn’t fully control. This facility changes that,” Carsten Holtkemeyer, Yoco’s chief executive officer (CEO), said in a statement on Monday.
Yoco describes it as one of Africa’s largest dedicated merchant cash advance facilities, giving it direct control over the financing layer at scale for the first time. The company says it has not recorded an unprofitable lending cohort since it began advancing capital in 2018, including during the Covid-19 pandemic. But it did not provide cohort-level performance figures, default rates, or write-offs with the announcement.
The model relies on a different view of a small business’s finances. A bank statement or credit bureau report offers a snapshot, while payment records can show sales patterns in real time. Yoco says that information can help it tailor funding to a merchant’s trading history and business needs.
Merchants typically use advances to buy stock ahead of busy periods, hire staff, upgrade equipment or open branches, according to Yoco. The company plans to extend Yoco Capital to more of its 200,000-plus merchants across retail, hospitality and services in South Africa.
Access to finance remains a constraint for smaller businesses. The 2025 Finfind and African Bank SA MSME Access to Finance Report puts South Africa’s small-business financing gap at about R350 billion ($21.3 billion). It estimates that small and medium-sized enterprises (SMEs) receive 13% of national bank lending, compared with 51% for large corporations.
Victory Park Capital brings experience in private credit and asset-backed finance to the arrangement. The firm says it has invested more than $12 billion across 260 investments since 2007. Its senior partner, Jason Brown, said Yoco had demonstrated a track record of supporting small and independent businesses.
“We’re supportive of Yoco’s mission to expand access to flexible financing solutions for South African entrepreneurs,” Brown said.
Yoco believes the facility fits a broader effort to become an operating system for independent businesses, combining payments, point-of-sale software and financing. The company has expanded its product offering, acquired software business Dyner, and said it is developing an AI-powered platform. It also says it has reduced merchant fees by R250 million ($15.20 million) a year.
Yoco’s next test is whether it can scale cash advances without compromising the discipline behind its model. For merchants, the real measure will be simple: whether the funding arrives when they need it most, helping them keep the doors open and the tills ringing.
Editor’s note: This story has been updated to clarify that Yoco’s $100 million credit facility will support its merchant cash advances operation, rather than merchant lending more broadly.