Dojo funding review: how the advance works and who is behind it

Dojo is a UK card payments provider best known for its card machines and its app, and it offers business funding to the merchants who process through it. The offer is built around three promises that its own funding page leads with: knowing what you will pay up front, repaying as you earn, and applying in the app or online. That is the shape of a merchant cash advance rather than a term loan.

The mechanics follow the market pattern. You take a lump sum, agree a single total to repay, and a fixed percentage of your card takings is deducted automatically until the balance clears. Across the UK market that deducted share, usually called the holdback, tends to sit between 5 and 20 per cent, and the cost is expressed as a factor rate rather than an interest rate, commonly between 1.1 and 1.5. An advance is not a loan: it is the purchase of a slice of your future receivables at a discount, and when written to a limited company for business purposes it generally falls outside the Financial Conduct Authority's consumer credit rules.

One point deserves prominence, because it is what most people searching for Dojo funding are circling around. Dojo does not obviously present itself as the underwriter. YouLend lists Dojo among the platforms it works with on its own website, and Liberis also names Dojo among its partners. Both are embedded finance providers that build funding into other companies' platforms under those companies' branding. We cannot say from public sources which entity sits behind any particular Dojo offer, so the sensible step is to ask who the agreement is actually with before you sign, since that determines who you deal with if anything goes wrong.

The target customer is a Dojo card machine merchant with steady in person card takings: pubs, restaurants, salons, independent retailers, garages and similar. Because Dojo can already see the processing history, the offer is sized without an accounts pack, and the application is short.

It works best where Dojo handles most of your card income. If Dojo runs alongside another terminal or an online checkout, the deduction is drawn from a narrow slice of your revenue, and the balance clears far more slowly than the illustration suggests. Work out Dojo's actual share of your takings before you assume a repayment period.

It fits poorly where income is mostly cash, bank transfer or invoice, and it is the wrong instrument for long term investment, because a facility designed to clear within months does not match an asset that pays back over years. There is also a lock in worth weighing: while a balance is outstanding, repayment depends on you continuing to process through Dojo, which makes switching acquirer awkward. If you were already thinking about moving, resolve that first.

Dojo does not publish a standard rate card. Pricing is quoted per business, typically on a factor rate or fixed fee basis, and the figure depends on your card takings, trading history and the expected repayment period. Anyone quoting a specific Dojo rate before your account has been assessed is guessing.

What the model does give you is certainty about the total. You agree one figure at the outset and there is no interest accruing on top. The corollary is the part that catches people out: because the total is fixed, repaying quickly does not reduce it. Clearing a 1.2 factor rate advance in four months rather than nine means paying the same fee over a shorter period, which raises the effective annual cost. Ask explicitly whether early settlement produces any rebate.

Ask two further questions. Is there a minimum monthly repayment that applies even when trade is poor, since percentage based repayment is often sold as fully flexible but frequently has a floor? And is any fee deducted from the advance before it reaches your account? Our guide to what a factor rate means explains why the headline figure alone tells you so little, and the cash advance calculator converts a quote into a total repayable and a likely duration.

The closest comparisons are the other acquirers funding their own merchants. SumUp Cash Advance works the same way, generating a personalised offer from SumUp sales and deducting a set percentage of takings, and it states that funds arrive within two working days. The Worldpay business cash advance is the most transparent of the three, publishing a funding range and specific eligibility criteria and naming Liberis Ltd as the provider of the product on its own page. That openness about who is funding what is exactly what is missing from most acquirer offers.

An independent provider such as 365 Business Finance takes a different approach, sizing an advance against all your card income rather than one terminal, and giving you someone to negotiate with. That matters most if your takings are split across providers. Our roundup of the best merchant cash advance providers in the UK sets the options out side by side.

Get four figures in writing: the amount advanced, the total repayable in pounds, the percentage of takings deducted, and any minimum monthly payment. Then test the deduction against your quietest recent month rather than your best. If the numbers only work on optimistic assumptions, the advance is too big.

Ask who the credit agreement is with, whether a credit search will be recorded, whether a personal guarantee is required, and what happens to an outstanding balance if you leave Dojo. Dojo's own account of the product is on its funding page, and the registered details of any UK counterparty are available free of charge from Companies House. Terms, pricing and funding partnerships in this market change regularly, so confirm the current detail with Dojo before you commit.