Yoco Secures $100M Credit Facility to Expand Merchant Funding

South African payments company Yoco has secured a $100 million credit facility from US investment firm Victory Park Capital to expand cash advances for small businesses. Announced on 9 November, the deal gives Yoco a larger pool of financing for Yoco Capital, its merchant-funding product.

This is debt capacity for lending, not a $100 million equity round, and it does not set a new valuation for Yoco. The distinction matters. Rather than selling ownership in the company, Yoco is securing capital it can deploy to eligible merchants and recover as those advances are repaid.

Yoco says more than 200,000 South African businesses use its payments and business tools. A merchant that qualifies for funding sees a pre-approved offer in the Yoco app, based on sales processed through the platform. The company says there is no separate application or collateral requirement. An accepted advance is paid into the business account, with repayment taken as small deductions from daily takings instead of a fixed monthly instalment.

Advances range from R2,000 to R1.5 million, according to the announcement. A shop might use the money to buy inventory ahead of a busy period, while a restaurant could replace equipment or hire staff. Linking repayment to sales can be easier to manage when revenue fluctuates, but it does not make the funding free or remove the risk of strained cash flow. Merchants should still compare the full cost and repayment terms with other options.

Yoco has offered working capital since 2018 through specialist lending partners. It says it has advanced more than R6.5 billion to over 40,000 merchants in that period. The new facility is intended to give the company direct control over more of its financing, including pricing and risk, at scale. Yoco says it will still work with partners where that arrangement suits a product or market.

Payments providers have a valuable view of a merchant’s day-to-day sales. That can help them assess a business that lacks extensive formal accounts or property to pledge as collateral. It can also turn a payment terminal or checkout service into a wider operating platform with financing, stock and business-management tools.

The attraction has limits. Sales data can show recent trading but does not guarantee future income, particularly when economic conditions change or a merchant’s main customers disappear. A lender that owns more of the credit decision also owns more of the consequences if repayment weakens. The size of Yoco’s facility therefore says less about immediate loan demand than about its capacity to fund and manage a larger book.

The move comes in a competitive South African merchant-payments market. TechBooky has covered MTN’s MoMo Pay push into informal business payments, where providers are competing not only on transaction fees but on what useful services they can build around a merchant relationship. Yoco’s bet is that access to capital will make its own ecosystem more valuable.

Victory Park Capital specialises in private credit and asset-backed finance. The parties have disclosed the facility size and intended use, but the announcement does not spell out its interest rate, drawdown timetable or the price each merchant will pay. Those details will determine how much of the headline amount reaches businesses and whether Yoco can expand responsibly. For now, the concrete news is a sizeable financing line for merchant advances, not a fresh equity valuation.