fulfin vs. bank loan - 3 advantages at a glance

If the product range is well positioned and the number of customers continues to increase, the stock level will also be reduced and new orders will be placed. If these cannot be financed by the sale of the existing goods, a quick and simple solution is required. Financing optionto be able to pre-finance the new goods. However, for many SMEs, applying for a bank loan is more difficult than initially hoped.

In this series, we will explain what options and alternatives there are for this and what advantages and risks the respective financing methods entail. This time it's 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 option such as bank financing. In most cases, however, these conditions are not sufficient because the company should either have collateral or at least be able to present two successful annual balance sheets. However, only very few start-ups 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. Valuable time is thus wasted, which the Amazon Seller could have invested more wisely. Learn more about our prerequisites and the accompanying advantages with fulfin.

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 Purchasing of goods. This makes it possible to cover the costs for the entire purchase of goods, but also the transport and storage costs - i.e. all procurement expenses for the procurement of goods. Moreover, there are no fees for the trader (as for example with the Finetrading) and also no monthly interest (as for example with the bank loan). Instead, there is a low and fixed percentage, for example 1% of the sales 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 thus very similar to the Equity financingwithout having to give up shares in the company or having a say in the company.

fulfin vs. bank loan - 3 advantages at a glance 

1. fulfin offers online merchants short-term flexible financing options. If a seller needs financing for certain periods of time, such as the Prime Day or Black Friday, in need of a loan at short notice, fulfin can grant a loan without a lengthy review process. In addition, unlike a bank loan, you do not have to commit to a specific repayment period and can make your Financing options thus flexible. 
2. Unlike a bank loan, which often only covers a small credit line, fulfin provides the entire Working capital to finance current sales and at the same time still have sufficient reserves for unforeseen events. Often, the costs of fulfillment can even be reduced, so that online retailers often have the opportunity to expand with an individual loan. 
3. 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 our financial experts will be happy to help you: https://www.fulfin.com/de/