Merchant Capital vs Retail Capital: SA revenue-based finance compared
Two of SA's biggest merchant cash advance / revenue-based finance players. Plain-English comparison of product shape, fit, total cost, and who each one works for.
Merchant Capital and Retail Capital are the two biggest SA revenue-based finance providers — they advance you a lump sum and collect a fixed slice of your daily card or EFT turnover until it’s repaid plus their fee. Great for businesses with steady trade; brutal for businesses whose margins can’t absorb a slice off every sale.
How revenue-based finance actually works
Both lenders give you an amount up front — typically R50k to R5m — and then take a fixed percentage (often 8-15%) of your daily revenue until the total they’re owed (principal plus a factor fee) is paid off. Quiet months = smaller repayments. Busy months = faster payoff. There’s no fixed monthly instalment, no interest rate in the traditional sense. You owe a total amount; how fast you pay it depends on how fast you sell.
What’s different between the two
Merchant Capitalhas been in SA longest (founded 2012) and has the deepest SME underwriting infrastructure. They’re particularly strong for retail, hospitality, and card-revenue-heavy businesses. Advance sizes typically go up to R5m. Onboarding is fast — decisions within 24-48 hours once they see your bank and card statements.
Retail Capital (founded 2011, now backed by TymeBank) plays across a similar space but has stronger positioning for omnichannel and EFT-heavy businesses. The acquisition by TymeBank in 2023 gave them a bigger balance sheet — they can go larger on advance amounts, and their tech integration with Tyme means if you bank there, onboarding is basically instant.
Green flags — either one works if:
- You have consistent monthly revenue of R250k+
- Card or EFT turnover makes up most of your sales (they can read it from statements)
- Margins are healthy enough to absorb a 10% slice off every sale
- You want the repayment to flex with actual sales, not sit on the 1st of the month
Red flags — skip both if:
- Your margins are already thin (sub-20% gross) — the slice off every sale hurts more than it helps
- You trade seasonally in a way that's hard to read from 6 months of statements
- You need the cash for something slow-burning (construction, product development) that won't lift sales quickly
- You could qualify for a cheaper term loan — RBF cost more than equivalent bank debt, you pay for the speed and the flex
How to pick between them
Honestly, much of it comes down to who comes back with the better quote for your specific profile. The shapes are similar; the pricing depends on their current book appetite and what they see in your statements. The practical answer is to get a quote from both (Frank can help) and compare total payback as a percentage of advance over the expected repayment window.
One tactical note: if you’re already banking with TymeBank, Retail Capital’s process will be measurably faster and the pricing may be slightly better because of the data integration. If you’re on Standard Bank / FNB / Nedbank, they’re both roughly even on friction.
What Frank would actually do
For the first advance, get quotes from both and take the better number. Either one is a reasonable choice if the business case is right. What you don’twant to do is take RBF before you’ve asked the question: “would a Lula Capital Loan or an invoice finance facility actually be cheaper here?”
Next step
Run Frank’s questionnaire — it asks the few things that matter and shows whether revenue-based finance (Merchant / Retail Capital) is really the shape that fits, or whether something else (invoice finance, term loan, bridge) would serve you better: See your funding options.