'Banks and other traditional lenders have snubbed ecommerce businesses, but new approaches to funding are lightning fast, unsecured and won’t force you to give up ownership.’ – Swoop
We are in the midst of an ecommerce boom– and it’s not set to slow down anytime soon.
Since the pandemic, the shopping tide has turned, as businesses around the world shifted away from bricks and mortar to online selling to survive.
With the ease and convenience of online shopping, super-fast delivery times and increasingly slick check-out experiences– all without leaving the comfort of home– it’s no wonder that online shopping has become the new default for customers.
Riding the ecommerce wave
According to Swoop, the ecommerce retail market share has doubled in the last four years alone– and this could be just the beginning of the curve.
Ambitious ecommerce businesses can benefit from these shifts in customer demand and leverage new funding solutions to accelerate their growth journey.
But here’s the bottom line– even in the midst of a retail boom, almost all businesses need to borrow to grow.
As an ecommerce business, securing funding is a crucial step to achieving your next stage of growth. And you don’t have to wait until you need the funds to borrow them either. Being proactive and securing funds early will not only help you sustain your business– it’ll help you stay ahead of the curve and prepare for the next level of growth.
Securing funding has been historically tough for ecommerce businesses, particularly in the early stages when companies have a limited financial history, but high revenue growth numbers.
But ecom businesses can avoid these difficulties and challenges by looking to new, faster alternative channels of funding.
The new ecommerce funding solution
Traditional funding avenues like bootstrapping, crowdfunding, equity, debt, and grants can be difficult to secure, have longer lead times and unattainable credit scoring criteria, or even result in having to let go of a percentage of the ownership of a company. This has paved the way for ecommerce funding, which uses revenue as the primary data point for capital allocation.
Ecommerce funding has several names, including revenue-based finance, non-dilutive equity and royalty investment. In the end, it is a capital investment with a plan for structured repayment. As it is technically not a loan, there is no need to provide a personal guarantee, it won’t affect a company’s credit score, there are no interest rates, and the business owner retains 100 per cent equity.
Why ecommerce funding?
- Fast to receive the money (it could be in your account within 24 hours!)
- Simple to repay
- Repayments are taken at a percentage of revenue– they don’t punish you for a slow month or two
- You retain full ownership of your business– you don’t have to give up a percentage of your company
- Your credit score is unaffected. After connecting your accounts, the loan is secured against future sales which are repaid relative to your income effectively meaning you can’t default
- It’s non-restrictive, so you can use the money for any business purpose
- Funds are paid directly into your bank account so you are in control.
With a quick, flexible, and data-driven approach, ecommerce funding is a game-changer for online businesses, helping you add value to your business where you need it the most.
Does my business qualify for ecommerce funding?
We’re glad you asked!
You don’t necessarily have to be an ecommerce platform to qualify for ecommerce funding.
As long as a portion of your sales are online and you have six months trading history with an MRR over £2,000, you are eligible for some lenders.
Once you are hitting £10,000 over a period of between four and six months, you will be able to access lenders offering lower fees and start to accelerate your business at a fast pace!
Helping you on your funding journey