Direct Debits

In some geographies and for some use cases, Direct Debit is the preferred repayment method. For this solution YouLend are responsible for setting up and maintaining the repayments via the appropriate regional Direct Debit system (BACS Direct Debit in the UK, SEPA direct debit in Europe, ACH Direct Debit in the US).

Benefits of Direct Debit:

• No partner involvement in the flow of funds – The repayment process is independent of the partner’s payment infrastructure.
• Enables fixed repayment schedules – Ideal for predictable cash flow management.
• Covers all revenue sources – Repayments can reflect total business income, not just specific channels.

Drawbacks of Direct Debit:

• Less seamless onboarding – Merchants must sign an additional contract.
• Increased credit risk for YouLend – Since YouLend is not in the senior flow of funds, the risk of non-repayment is higher.

Types of Direct Debit
Direct Debits are available in two forms:

Variable Direct Debit

What is it: On a scheduled basis, YouLend collects a variable amount from the merchant, based on sales during that period.

Benefit: Aligns repayments with the merchant’s cash flow, similar to sales-based or re-routing methods.

How it’s calculated: YouLend maintains an open banking connection with the merchant’s business bank account to monitor sales and calculate the appropriate repayment amount.

Fixed Direct Debit

What is it Fixed Funding is a tailored advance product built to offer predictability and simplicity through fixed payments. On a scheduled basis, YouLend collects a fixed repayment amount.

Benefit: Fixed Funding gives merchants the confidence and control to plan ahead—with predictable, transparent payments that align with their business cash flow. It’s financing that feels simple, stable, and built around the way merchants want to operate. Merchants—especially larger and enterprise-level businesses—are increasingly looking for stable and clear financing options. Traditional revenue-based repayment models often lack the certainty that high-value merchants need to plan and manage their cash flow effectively.

How it’s calculated: The payment frequency and amount is agreed with the merchant up front.

What does the merchant need to do: In addition to signing their contract, we would request the merchant to also sign a direct debit mandate where we use our partner GoCardless to collect repayments from the merchant’s bank account.