South African fintech company Yoco has secured a $100 million credit facility from US investment firm Victory Park Capital to expand working capital financing for small businesses using its payments platform.
The facility will fund Yoco Capital, the company’s embedded finance business, which provides merchant cash advances based on transaction activity generated through Yoco’s payment systems. The financing gives Yoco greater control over the capital used to support its merchant lending operations and provides additional capacity to extend advances to businesses across retail, hospitality and services.
“We’ve spent a decade building an operating system that runs a merchant’s whole business, payments, point of sale, and now the decisions in between. Financing was the one layer we didn’t fully control. This facility changes that,” Yoko Chief Executive Carsten Holtkemeyer said.
He added the facility would allow the company to take greater control of the financing component of its business.
Yoco has been providing working capital to South African entrepreneurs since 2018 through partnerships with specialist SME credit providers. The company says it has disbursed more than R6.5 billion to over 40,000 merchants during that period. It currently serves more than 200,000 small and independent businesses.
Unlike conventional business loans, Yoco Capital uses transaction information generated through merchants’ everyday operations to assess their financing eligibility.
Merchants using Yoco’s payment terminals and online payment services can receive funding offers through the Yoco application. The company says merchants are pre-approved using their live in-person and online sales data, without requiring collateral or a conventional loan application.
Advances range from R2,000 to R1.5 million. Businesses can use the money to purchase inventory, hire employees, upgrade equipment, prepare for busy trading periods or expand their operations. Repayment is automatically deducted from daily sales rather than being structured around fixed monthly instalments. The model is designed to align repayments with business activity, potentially easing pressure on merchants during periods when sales are lower.
For independent businesses, access to working capital can determine whether they can take advantage of growth opportunities or maintain operations during difficult trading conditions.
Yoco’s financing model also highlights how payment companies are increasingly using transaction data to enter the lending market.
By observing sales volumes, payment patterns and business performance, fintech platforms can build a more detailed picture of a merchant’s activities than may be available through conventional banking records alone. That information can support credit assessment for businesses with limited collateral or short credit histories.
The financing challenge is particularly significant in South Africa, where the small business financing gap is estimated at approximately R350 billion, according to the 2025 Finfind and African Bank MSME Access to Finance Report cited by Yoco.
The same report puts the share of national bank lending received by SMEs at 13%, compared with 51% for large corporations.
The new facility is therefore aimed at a market where demand for working capital is substantial, but traditional lending requirements can make access difficult for smaller enterprises.
Victory Park Capital brings experience in private credit and asset-backed financing. The firm says it has invested more than $12 billion across approximately 260 investments since its establishment in 2007.
Its Senior Partner Jason Brown said Yoco had demonstrated a track record of supporting the operating needs of small and independent businesses.
“We’re supportive of Yoco’s mission to expand access to flexible financing solutions for South African entrepreneurs,” Brown said.
For Yoco, the financing arrangement is part of a wider transition from payments processing into a broader operating platform for independent businesses. Its services combine card acceptance, point-of-sale software, business management tools and access to capital. The strategy allows the company to deepen its relationship with merchants while generating additional revenue opportunities beyond payment transactions.
However, the $100 million represents the size of the credit facility, not the amount already disbursed to businesses. The expansion will also raise questions about the total cost of advances, eligibility criteria and the extent to which automatic deductions affect merchants’ cash flow. Flexible repayment arrangements can help businesses manage variable revenue, but transparency around fees, repayment obligations and the total cost of financing remains important.
Yoco says the facility will allow it to extend funding to more of its existing merchant network while developing financing products tailored to different business segments.
The important measure will be how quickly the facility translates into actual financing for merchants, how many businesses benefit and whether the model can maintain sustainable repayment performance. Yoco’s $100 million facility positions it to compete more directly in the embedded finance market, where payment data is increasingly becoming a foundation for lending to small businesses.