Last post: Aug 23, 2013
As the Internet has grown over the years so has the number of retail outlets wishing to take advantage of selling their products online. These online stores are collectively often referred to as e-commerce businesses. There are an increasing number of consumers choosing the convenience of shopping online rather than visiting the shop in their local high street.
As the Internet has grown over the years so has the number of retail outlets wishing to take advantage of selling their products online. These online stores are collectively often referred to as e-commerce businesses. There are an increasing number of consumers choosing the convenience of shopping online rather than visiting the shop in their local high street. This has presented e-commerce sites with a number of challenges with one of those being the need to carry an increased amount of stock to cope with a higher level of sales.
In order to fund the purchase of additional stock, e-commerce businesses often need to raise the capital to do so. One way of doing this is to borrow the money but, for whatever reason, requests for finance from e-commerce stores to the major high street banks are not generally looked on as favourably as that of shops on the high street.
However, in the last couple of years, there have been a number of lenders that have appeared on the scene that specifically look to provide finance for e-commerce businesses. Below we provide some information about three of these lenders that we trust you find beneficial. The lenders are called Kabbage, IWOCA and EZBOB.
What selling platforms do you have to be on to qualify for a loan?
Kabbage – eBay
IWOCA – eBay and Amazon
EZBOB - eBay and Amazon
How much can you borrow?
- Kabbage – £500 to £25,000
- IWOCA – £500 to £50,000
- EZBOB – £500 to £40,000
Over what term?
- Kabbage – 10 months
- IWOCA – up to 6 months
- EZBOB – up to 12 months
At what cost?
Kabbage - A transaction fee of between 2% to 7% of the amount of the loan. On any borrowing remaining after one-month interest is charged at 4% per month. Over a 10-month period the total cost will be between 20% to 25% of the amount of the loan.
IWOCA – An interest rate of between 2% to 8% per month. There are no application fees or administration charges.
EZBOB – An interest rate of between 2% to 7% per month with the rate reducing over the term of the loan. A loan completion fee of 0.8% with a minimum of £30.
What are the eligibility criteria?
Kabbage – They will validate the e-commerce store's transactions to decide upon the amount of the loan and cost.
IWOCA – This is based upon the annual trading history of the e-commerce store and feedback scores from customers. Normally they require one years trading history, a feedback score of at least 99% and sales exceeding £10,000.
EZBOB - The applicant must be at least 18 years of age, a UK resident, have a UK bank account and debit card, have been trading for a minimum of one year and have a turnover of a minimum of £10,000.
What can the finance be used for?
- Kabbage – Working capital purposes
- IWOCA – Working capital purposes
- EZBOB – Working capital purposes
How does the application process work?
Kabbage – The application form is completed online by providing personal and business information, a credit reference search is made and a decision given in minutes and the funds can be in the e-commerce's bank account or PayPal account within 3 to 5 business days.
IWOCA – The application process is completed online by providing personal and business information, a credit reference search is undertaken and a decision made in minutes and the funds can be paid into the e-commerce's bank account on the same day.
EZBOB – The application process is completed online by providing personal and business information, a credit reference search is carried out and a decision made in minutes and funds can be transferred into the e-commerce's bank account within minutes.
What other conditions are there?
Kabbage. IWOCA and EZBOB – all loans are unsecured and there is no penalty for early repayment. For advice on broader business finance issues and to look at other options to finance your business, please call one of the Choice Loans team on 0845 1260350
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