If the product range is well positioned and the number of customers continues to increase, the stock level is also reduced and new goods are ordered. If these cannot be financed through the sale of the existing goods, a quick and simple financing option is needed to pre-finance the new goods. In this series, we will explain which options are available and which advantages and risks each financing method entails. This time it is about the classic bank loan:
Bank loan for the pre-financing of the goods
When it comes to financing a nascent project, the thought of a loan from the house bank is not far away. Offers to young entrepreneurs start from a successful marketing history of at least three months and two hundred units sold. These are usually the necessary prerequisites for various financing options such as bank financing. In most cases, however, these prerequisites are not sufficient because the company should either have collateral or be able to present at least two successful annual balance sheets. However, only very few start-up companies can provide this.
As an online merchant, you are therefore often placed in the "high-risk" category by your bank advisor. In most cases, this leads to a direct rejection of the submitted credit request or to extremely poor rate conditions. In addition, there are time-consuming processing and decision-making processes on the part of the bank. Thus, valuable time is wasted, which the Amazon Seller could have invested more sensibly.
Pre-financing of goods with fulfin
fulfin is a newly developed qualified subordinated loan especially for e-commerce sellers. With this loan, fulfin invests together with the merchant in the purchase of goods. With this loan, it is possible to cover the costs for the entire purchase of goods, but also the transport and storage costs - i.e. all purchasing expenses for the procurement of goods. Moreover, there are no fees for the trader (as for example with finetrading) and no monthly interest (as for example with a bank loan). Instead, there is a low and fixed percentage, for example 1% of the sale price of the goods financed with the loan. If sales of the pre-financed products subsequently go according to plan, the percentage rate remains the same. If sales do not go according to plan and fewer units are sold than originally planned, the way the calculation is made means that no fee or interest is due. This form of financing is therefore very similar to equity financing, without having to give up shares in the company or having a say in the company.
fulfin vs. bank loan - 3 advantages at a glance
- fulfin offers online merchants short-term flexible financing options. If a seller needs a short-term loan for certain time periods, such as Prime Day or Black Friday, fulfin can grant a loan without a lengthy review process. In addition, unlike a bank loan, there is no need to commit to a specific repayment period, which means that financing options can be flexible.
- In contrast to a bank loan, which often only covers a small credit line, fulfin provides the entire working capital to finance the current sales and at the same time still have enough reserves for unforeseen events. Often, the costs of the "fulfilment" can even be reduced, so that online merchants often get the opportunity to expand with an individual loan.
- When considering a loan request, the bank often uses a risk assessment based on a business plan as well as the amount of equity capital. Through digital interfaces, fulfin, on the other hand, obtains an exact picture of the seller, the respective product as well as the logistics route. Thus, the loan can be aligned individually, precisely and efficiently. By dovetailing the financing with the logistics project, the existing inventory can be used as collateral for the loan.
Sounds interesting for you and your company? Any questions? Just contact us and we will help you: https://www.fulfin.com/de/