South African Fintech Yoco Secures $100 Million Credit Facility to Expand SME Financing
The facility from Victory Park Capital will support Yoco Capital's merchant cash advances, allowing the fintech to finance more small businesses using transaction data from its payments platform.
South African fintech company Yoco has secured a $100 million credit facility from US-based investment firm Victory Park Capital to expand working capital financing for small and independent businesses.
Announced on November 9, 2026, the facility will fund Yoco Capital, the company's embedded finance business, which provides merchant cash advances to businesses using Yoco's payment services.
The agreement will give Yoco greater control over the financing it provides to merchants, including how advances are priced and how lending risks are managed.
The funding also marks a significant shift in the company's financing model, allowing it to bring more of its merchant lending operations in-house after years of working with external credit providers.
How Yoco Capital Provides Funding to Small Businesses
Yoco Capital uses transaction data generated through merchants' everyday business activities to determine their eligibility for working capital.
Instead of requiring merchants to complete a conventional loan application, the platform assesses live sales information from their in-person and online payment transactions.
Eligible businesses receive pre-approved funding offers through the Yoco application. Merchants can accept an offer without providing collateral, with funds transferred to their accounts.
The advances range from R2,000 to R1.5 million, depending on the merchant's eligibility and business activity.
Repayments are automatically deducted from daily business takings rather than through fixed monthly instalments.
This structure allows repayment amounts to reflect merchants' trading activity, although businesses still need to account for the deductions when managing their daily cash flow.
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Businesses Can Use Advances for Stock, Equipment and Expansion
Yoco Capital is designed to support different working capital requirements among small businesses.
Merchants can use the advances to purchase inventory, hire additional employees, upgrade business equipment or open new branches.
For businesses that experience seasonal demand or need additional capital to fulfil customer orders, access to working capital can help maintain operations and support expansion.
Yoco currently serves more than 200,000 small and independent businesses across retail, hospitality and services.
The company says the new facility will help extend financing to more merchants within this network.
Yoco Has Provided More Than R6.5 Billion in Merchant Funding
Yoco has been providing working capital to South African entrepreneurs since 2018 through partnerships with specialist small business credit providers.
According to the company, it has facilitated more than R6.5 billion in advances for over 40,000 merchants during that period.
The new agreement with Victory Park Capital changes how the company funds a significant part of this lending activity.
Rather than depending entirely on external financing partners, Yoco will have direct control over the capital used for merchant advances at scale.
The company says it will continue working with funding providers where external partnerships remain appropriate for particular products or markets.
Why Victory Park Capital Is Funding Yoco
Victory Park Capital is a US-based alternative investment firm specialising in private credit and asset-backed finance.
The investment firm has made more than $12 billion in investments across approximately 260 transactions since its establishment in 2007, according to its announcement.
For Victory Park Capital, the agreement provides an opportunity to support a fintech platform with an established merchant network and transaction data that can inform financing decisions.
Yoco CEO Carsten Holtkemeyer said the facility would give the company greater control over the financing component of its business platform.
Victory Park Capital Senior Partner Jason Brown also expressed support for Yoco's efforts to expand access to flexible financing for South African entrepreneurs.
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What the Deal Means for South Africa's SME Financing Market
Small businesses in South Africa continue to face challenges accessing traditional bank financing.
A 2025 report by Finfind and African Bank estimated the country's small business financing gap at approximately R350 billion, highlighting the difficulty many entrepreneurs face when seeking capital to grow their operations.
Yoco's model uses payment transaction information to assess business performance and determine financing eligibility.
This approach could help businesses with limited conventional credit records access working capital based on their actual trading activity.
However, merchant cash advances are still a form of financing that businesses must repay. Automatic deductions from daily sales can also affect available operating cash, particularly during periods of weak revenue.
The long-term impact will depend on the affordability of the advances, the terms offered to merchants and how effectively the funding supports business growth.
For Yoco, the $100 million facility strengthens its position beyond payment processing by bringing payments, business management tools and merchant financing closer together.