Turnover-based lending: borrowing against your sales

How turnover-based lending works

Some lenders quote a facility as a multiple of monthly or annual turnover — a fast way to set an opening bracket. It is intuitive: bigger sales, bigger indicative facility. Many revenue-based and merchant advances work this way, repaying as a share of takings.

Why turnover is only a starting point

Turnover is not the cash available to repay. A business turning over a lot on thin margins may generate little free cash, while a smaller firm with fat margins generates more. That is why a turnover figure sets a bracket, but affordability sets the real limit.

Where it fits

Turnover-based facilities suit businesses with steady, visible sales — retail, hospitality, subscription. Repayment flexes with takings, which can help in quiet spells. But watch the effective cost, which is often high relative to a term loan. See merchant cash advance.

Turnover and affordability together

The sensible view uses turnover for scale and affordability for safety: never borrow more than your cash can service, whatever your sales suggest. See how much to borrow.

Check the cash, not just the sales

Use the calculator to test affordability against real cash, not headline turnover.

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.