A critical issue for most online sellers is having access to capital. Cash flow shortages can often arise from the effect of seasonality and the requirement of paying suppliers upfront for inventory. In a competitive space, having quick access to additional funding can give you an edge.
If you’re looking to fund a new ecommerce business or grow an existing one, there are a number of options available that have arisen in recent years to cater to the needs of small and medium size businesses.
The government has recently launched Business Banking with £300million of state funding, which will provide a significant boost to small and medium-sized business-lending and support UK business growth. If you’re a Limited Company with annual turnover of £100 000, Funding Circle might be for you, or alternatively there is Crowd Funding for businesses that don’t meet these criteria.
Funding tailored specifically to ecommerce has also come to the fore in the last 12-18 months. This is where lenders such as iwoca come in: using proprietary technology to analyse sales performance and customer feedback scores in real time.
With an applicant’s permission, iwoca can access the sales history of a business, whether it trades on ebay or Amazon, via ecommerce platforms such as Magento or Shopify, uses online payment systems such as PayPal or SagePay, or manages its accounts using software such as FreeAgent. Within minutes, iwoca can understand the business applying for the loan, how it is doing financially and if they can provide them with capital or not.
Alongside technological innovation, iwoca ensures its customer relationship managers spend time speaking to customers to understand more about their business and future ambitions. iwoca’s customer service is geared towards ecommerce with many of the team having traded online for a number of years themselves. This gives a unique insight into the situation its customers are facing and harks back to a time when banks would offer businesses a similar service.