Fast and flexible purchase financing with fulfin
What is purchase financing?
The classic purchase financing can be seen as a kind of commodity financing. It offers the trader the possibility to buy goods despite low liquidity and thus to avoid an out-of-stock event of his products. Another common form of purchase financing is the so-called finetrading. The finetrader acts as a lender like an intermediary and pays the invoice for the ordered goods directly to the supplier, if necessary using a cash discount. In return, the merchant (i.e. the borrower) receives an invoice from the finetrader for the goods with an extended payment term or the option to pay in instalments. Whether with a traditional loan from a lender or through a finetrader, purchase financing offers a way to quickly order new merchandise to avoid an out-of-stock event.
For whom is this form of financing suitable?
Purchase financing is particularly worthwhile when a retailer has a high demand for his products, but cannot meet this demand due to insufficient liquidity - i.e. no money is currently available. For this reason, he cannot reorder in a timely manner, which can lead to a very unpleasant out-of-stock event. As a result, potential and existing customers often migrate to competitors, as there is usually a large selection of similar products, especially in the eCommerce sector. With purchase financing, the risk of such an out-of-stock event can be avoided and the retailer does not lose customers to the competition. This form of financing is also very advantageous for companies in the start-up phase. Young merchants who are still in the early stages of growth often find it difficult to successfully apply for regular loans from banks. Stagnating growth is of course undesirable and here purchase financing is exactly the right step to success. Established eCommerce companies also benefit, as this financing option offers a high degree of flexibility and scalability for short-term liquidity, something that classic rigid bank loans cannot do. In addition, this financing option is suitable for eCommerce merchants for special occasions, such as the recurring purchase of goods or occasions with seasonal products, such as the Christmas business. Ultimately, the term of the purchase financing is perfectly adapted to the needs of the customer, because within a term of three to nine months, the goods can be pre-financed and additional sales revenue can be generated.
Advantages of purchase financing
1. fast and uncomplicated application for e-commerce merchants
Purchase financing has the distinct advantage that the application process for merchant small to medium-sized e-commerce companies is much easier than it would be with a regular bank loan.
2.higher chances of approval of the loan
The chance for the trader to be approved for a purchase financing is significantly higher than for a regular loan, since banks check at least two annual financial statements, which are often not yet available, especially for young companies. Furthermore, banks are not able to understand the specifics of purchase financing as well, as they usually do not have sufficient expertise for this type of business model.
3.Trader retains all shares in the company
In contrast to the participation of a third party such as a VC (venture capital) company, the trader receives the additional financial resources without having to give up shares in his company.
Advantages of purchase financing with fulfin
1. specially adapted to the needs of e-commerce merchants
For e-commerce merchants, a fast (decision within 24 hours), flexible, uncomplicated and reliable loan extension and disbursement is important. fulfin offers this in a few steps via its own digital platform, which allows everything to be managed easily, quickly and completely paperless online.
2. no impairment of the dealer-supplier relationship
Unlike other forms of credit, such as finetrading, fulfin does not interfere with the already established relationship between trader and supplier, but merely provides the required capital. Thus, it is not necessary to change existing contracts or even to conclude new ones.
3. Individual capital investment
Purchasing finance from fulfin gives companies greater room for manoeuvre. The credit granted can exceed the actual invoice amount of the supplier. The trader can then use this additional liquidity for additional costs, such as import duties, logistics costs, marketing, etc.
4. holiday - interruption of repayment
Sometimes it can make sense for a trader to interrupt the repayment of his loan, e.g. if planned sales are delayed. In this case, an individually and flexibly agreed payment interruption, so-called holiday, can be useful. In many cases, this can be agreed in advance, giving the trader even greater entrepreneurial room for manoeuvre.
Procedure of a purchase financing
The application for purchase financing at fulfin is done online, in just a few minutes via the website (www.fulfin.com). In contrast to other financing partners, all the necessary data can be submitted online without any great effort.n. After the positive verification of the submitted data, the disbursement of the credit to the account of the trader takes place within a few days.
Do you still have questions about how you can tap your full growth potential with fulfin or is something unclear to you? Then simply submit a free and non-binding application on the fulfin platform today. To find out more, call us at: 089 215375920. Our competent and cheerful colleagues will be happy to help and advise you individually.
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