Repaying an iZettle loan through future income
Repaying an iZettle loan is different too. Instead of signing up to an instalment plan as a company would with a traditional bank loan, repayments are taken from future transactions put through the iZettle payment system.
You pay back amounts based on your sales. When business is going well, you pay more. If sales slow down, your repayments will be smaller too.
iZettle determines a payback rate based on the:
- Fixed fee you pay for getting the advance (decided by iZettle)
- Amount you loan (decided by you, within the bounds of what iZettle offers you)
- Your sales volume (based on your sales history with iZettle)
For instance, the fixed Advance fee could be £1300 for a £10,000 loan, meaning you owe a total of £11,300. iZettle sets the payback rate at the percentage they think you need to pay per transaction (e.g. 10% of your daily transaction amounts) based on how much they predict you sell over the next 12 months.
iZettle expects a complete repayment within those 12 months. If for any reason your transactions don’t cover the full repayment within that time, iZettle may contact you to adjust the rate or extend the repayment period, or in a worst-case scenario cancel the advance and ask you to pay the remaining amount in one lump sum.