When it comes to business funding, the payment structure matters just as much as the amount you borrow. Two of the most common options are fixed payments and turnover-linked (flexible) payments - and they suit very different types of businesses.
Fixed payments: predictable but rigid
With fixed monthly payments, you pay the same amount every month regardless of how business is going. This works well if your income is stable and consistent month on month. A franchise with guaranteed minimum turnover or a business with long-term service contracts might be well suited to this structure.
The risk is that during a quiet month - a seasonal dip, load shedding impact or an unexpected slow period - a fixed obligation can put real pressure on your cash flow at exactly the wrong time.
Flexible payments: designed for how most businesses actually work
Turnover-linked payments adjust based on how much your business takes in. When sales are strong, you pay more. When trade slows, you pay less. A GoTyme Business Advance works on this model.
For most South African SMEs - especially those in retail, food and beverage, hospitality and services - this is a much better fit. South African businesses deal with load shedding, seasonal variation and unpredictable demand. A payment structure that moves with your actual income keeps your cash flow stable and your operation running.
Which should you choose?
If your turnover is consistent and predictable, fixed payments can work well. If your income varies month to month - which is true of most South African SMEs - flexible, turnover-linked payments are the safer and more sustainable choice.
Use the GoTyme funding calculator to see what a flexible advance could look like for your business, or apply for funding today.