Getting paid faster: a guide to payment costs and cash flow

01

Why does cash flow squeeze UK businesses that are making sales?

Because money goes out before it comes in. Wages, rent and suppliers are paid on fixed dates, while customers and card providers pay later. A profitable business can still run short in that gap.

The Department for Business and Trade estimates that late payments cost the UK economy almost £11 billion a year, that over 1.5 million businesses (28%) are affected each year, and that 14,000 businesses close each year as a result, which is 38 every day.

This guide covers the part you can influence through card payments: how fast takings reach you, how much processing takes, and finance repaid from card sales. If business customers pay late, statutory interest is 8% plus the Bank of England base rate, unless a contract sets another rate.

02

How quickly do card payments reach my bank account, and can I speed it up?

It depends on your provider, plan and cut-off times. Published terms run from next day including weekends to one or two working days, and instant transfers cost extra. Check your own agreement for the schedule and weekend rules.

Authorising a card payment and receiving the money are separate steps. SumUp says money reaches its Business Account by 7am the next day, even at weekends and public holidays, so check how long onward transfers to your own bank take. Square says one to two working days to an external bank account for free, or instantly for a fee of 1.95%, from £15 to £3,500 a day. DOJO markets next-day payouts. With any provider, confirm the schedule in writing.

Speed can be bought, but an instant-transfer fee is a percentage of every amount you move early, so it adds up fast if used routinely.

03

How much cash do my card processing costs really take out of the business?

Your effective rate is total fees divided by total card takings. Each 0.1 percentage point is worth £8 a month on £8,000 of takings, £25 on £25,000 and £75 on £75,000, so small differences add up over a year.

Add every fee on a month's statement, excluding VAT, divide by that month's card takings and multiply by 100. Include per-transaction fees, machine hire and minimum charges. A lower rate only helps if the contract, notice period and exit costs let you move.

04

What is a merchant cash advance, and how is it different from a bank loan?

A merchant cash advance gives you a lump sum now and takes repayment as a percentage of your daily card takings. In DOJO's version with YouLend, a fixed fee is agreed upfront, so repayments follow sales.

DOJO describes its business funding as a cash advance, offered with YouLend. It is repayable, not a grant. DOJO says card transaction history, business performance and credit information are considered, and that a pre-qualified amount is not an approval. It also says YouLend uses a soft search that does not affect the credit score.

Regulation can differ from a bank loan. The Financial Conduct Authority has said its remit, set by Parliament, does not include lending to limited companies, and its 2024 work on personal guarantees focused on sole traders and small partnerships borrowing less than £25,000. Whether a particular advance is regulated depends on the provider, the structure and your business type, so ask.

05

What is DOJO Flex Funds, and when might it fit better than a one-off advance?

Flex Funds is a facility DOJO offers with Liberis to eligible customers. DOJO describes an initial fee-free portion, repayment as a fixed percentage of daily sales and a balance that replenishes as you repay, so you can draw again without reapplying.

DOJO describes Flex Funds as an ongoing facility, separate from DOJO Business Funding. It says an initial portion of the first drawdown is fee-free and a fixed fee applies to the rest. Repayments are automatic at an agreed percentage of daily sales, with no fixed monthly amount. DOJO's FAQ lists minimum monthly card revenue and trading-history criteria, and says new customers receive an initial drawdown after seven days of transacting once an offer is accepted. Recheck the live criteria.

A one-off advance may suit a single large planned spend. A replenishing facility may suit repeated, smaller gaps, but only if the fees across repeated drawdowns stay acceptable.

06

Can a business rewards credit card help my cash flow?

It can give you time between spending and paying, plus cashback, but it is borrowing. The Capital on Tap card advertises uncapped 1% cashback, and interest, fees and repayment dates still apply. Cashback does not reduce what you owe.

DOJO's page describes the card as a product of New Wave Capital Limited, trading as Capital on Tap, not a card issued by DOJO. It advertises uncapped 1% cashback, limits of up to £250,000 and no annual, FX or ATM fees. The issuer sets any limit after assessment. The page lists limited companies and LLPs, mentions a personal soft search and a business hard search, and says DOJO may earn commission.

Cashback rewards spending. It is not a saving on the debt, so if interest and fees exceed the cashback you earn, you are worse off.

07

Which option fits which cash flow problem?

Match the tool to the problem. Slow payouts call for a faster schedule, high costs for a lower effective rate, one large spend for an advance, repeated short gaps for a facility and routine spending for a card.

None of these fixes a business that loses money. Borrowing moves cash forward in time. It does not create it. If the same gap appears every month, look at pricing, costs and payment terms first.

08

What should I do in the next 30 days?

In week one, gather your statements and payout schedule. In week two, work out your effective rate and cash gaps. In week three, collect written quotes. In week four, compare total costs and decide, without cancelling anything early.

1. 01
   Week 1: gather

   Collect three months of card statements, your payout schedule and contract end dates.

2. 02
   Week 2: measure

   Work out your effective rate and list the days when cash runs short.

3. 03
   Week 3: askFull step in the download ↓
4. 04
   Week 4: compareFull step in the download ↓

09

How does Reeve Consult fit in, and what should I do next?

Reeve Consult is an authorised DOJO partner and may receive a referral fee from DOJO. Funding and card products are provided by DOJO's partners, who make the decisions. This guide is general information, not financial advice.

We can help you review a card statement and a written DOJO proposal. We do not decide funding or credit applications, and no approval, amount or fee is promised. Read the full terms of any offer, compare it with at least one alternative, and seek advice if you are unsure.

Rules, rates and products change, so check the latest position before you apply.