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fulfin - financing ecommerce May 28, 2020 2 Minutes
Categories: Ecommerce | Help for sellers
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How to keep your company liquid in the crisis

Less turnover, already long payment terms are stretched to the maximum and many payments are only made after the payment term has expired - this is often the practice in the current situation. As a payee, this often makes everyday operations more difficult - especially for small and medium-sized enterprises. While state emergency aid can provide a brief period of relief, loans from the KfW that go beyond this are out of the question for many small companies with fewer than 10 employees. In this article, we have summarised possible solutions for keeping your company solvent despite the crisis.

Create transparency about liquidity 

The first step is to create transparency about the liquidity available in the company. In particular, questions such as "How much cash is available?" and "To what extent are there already committed credit lines that could possibly be drawn at short notice? The figures from this analysis should then be compared with the short-term cash requirements. 

Create a liquidity plan 

A liquidity plan can make amounts of money needed in the short term calculable and thus maintain solvency. The long-term goal of a liquidity plan is to provide a transparent overview of payment deadlines, to predict or avoid bottlenecks and to gain a strategic perspective on cash flows in the company. 

In order to remain liquid in a crisis, it is important to record all incoming and outgoing payments in a liquidity plan and to structure them carefully in order to maintain an overview. Subsequently, the current liquid assets as well as the expected incoming and outgoing payments are entered into the plan. Finally, the expenses are subtracted from this. At the end, the liquidity of the considered time window is obtained.

Financing the purchase of goods in order to to remain liquid in the crisis

In addition to the classic overdraft facility, suppliers often offer supplier credits. However, not all suppliers grant sufficiently long payment terms. Small companies in particular often do not have the necessary market power. 

Those who need to pre-finance goods at short notice often resort to financing options such as finetrading or factoring. However, these are often associated with high costs, are complicated or are only offered for larger volumes. 

Particularly in order to remain liquid during a crisis, a company often has to resort to cost-effective alternatives at short notice. The Pre-financing of goods with fulfin can provide you with short-term liquidity.

This type of pre-financing is a qualified subordinated loan where fulfin finances the purchase of goods together with the merchant. In this way, it is possible to cover all purchasing expenses for the procurement of goods. There are no additional fees for the merchant (as for example with finetrading) and no monthly interest is due (as for example with a bank loan). 

Create financial flexibility 

In the case of fulfin pre-financing, a low, fixed and transparent percentage rate applies, calculated on the basis of the sales price of the goods financed with the loan. If sales of the pre-financed products go according to plan, the percentage rate remains as agreed. 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. Thus, the product allows a strong self-control and does not bind to a static contract like many other financing models. Therefore, the own financing framework can be created according to the own needs.

During the crisis, fulfin offers its customers extra flexibility. A new cash-boost product for small e-commerce businesses provides immediate access to a small amount of working capital. In addition, fulfin constantly monitors the market as well as current developments and offers customers a one-month payment break if necessary.

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