Unlocking Exponential Growth with innovative financing solutions
The success of any ecommerce company depends on the availability of ample liquidity to grow. While internal financing from the company's own cash generation can support some expansion it invariably requires additional external financing to support the full growth potential of a brand. Unfortunately for most online businesses, accessing external financing is complex, time consuming and at times, impossible.
fulfin, a dedicated provider of liquidity to digital economy companies has played a pivotal role in helping thousands of online businesses achieve as much as 50X revenue growth with founder friendly financing.
The agony of choice in alternative lending
There are many alternative financing options available to SMEs, but most are unsuitable for online businesses. Leasing, supply chain finance, factoring, crowdinvesting, venture capital and revenue based finance all provide different ways to achieve liquidity, balance sheet relief, or an increase in the equity ratio.
The Right Financing for Digital Entrepreneurs:
- A Venture capital investment exchanges a share in the company's future success for upfront liquidity. Investment amounts can be large, however VC both dilutes the founders ownership and creates the complexity of investor reporting and cap table management
- Leasing grants the right to use specific assets, such as production machines, in return for a fee. Leasing is not a viable option for the majority of e-commerce companies, who don't produce their own goods.
- Factoring assigns the companies future receivables to a financing partner in exchange for immediate cash. E-commerce payments are mostly instantaneous, rendering factoring irrelevant for most sellers
- Crowdfunding relies on a large number of individuals financing the production of a product by prepaying in return for some incentive. It always involves a significant marketing effort and success is far from certain.
- Supply chain finance, also known as finetrading, usually involves a capital provider acting as an intermediary between suppliers and the online business by paying the supplier invoice directly and extending payment terms to the seller. This can strain seller-supplier relationships and complicate order processing.
- Revenue Based Financing and Cashflow lending is where a financing partner provides fast and flexible short term liquidity based on the ability of the seller to generate revenue in the near term future to pay back the loan
Unlocking Growth Potential
Managing the Cash Conversion Cycle is the major challenge faced by online businesses as they look to grow to their full potential. Down payments, balance payments, freight, tax & duty and marketing all need to be paid in advance of the goods being sold and generating revenue. This unique aspect of e-commerce combined with the inherent seasonality and volatility of online revenues means online sellers need a financing partner that can react quickly to the changes in their revenue generating potential and provide rapid confirmation of the availability of financing.
By leveraging fast, flexible founder-friendly e-commerce financing such as that provided by fulfin, digital entrepreneurs can access large amounts of capital to unlock their full growth potential, whilst still maintaining ownership and control of their business.
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