E-Commerce Financing

How It Works —

Firms will provide you with capital based on data from your modern digital marketing solutions. Companies pay a fixed percentage of ongoing revenues to pay back the financing amount. The payments increase and decrease based on business revenue. These payments continue until an agreed-upon amount is repaid.

Example —

You receive $5,000 in funding and agree to pay the financier 8% of your revenue until you pay back $6,000 in total.

You Might Be A Fit If —

  • You drive most of your revenue by selling products online.
  • You have consistent e-commerce revenue to support repayment.

Why You Would Use This —

  • Typically starting with a smaller amount of funding, financiers will provide you with more capital every couple of weeks or months based on how your sales perform.

  • You have proven the success of your digital marketing efforts is in need of capital to scale up revenue.

What TO WATCH OUT FOR —

  • Paying a fixed percentage of revenue in a rapidly growing company can translate to higher payments than other debt products. 

    • The total repayment amount does not change based on your growth. 

  • Some providers will require you to share revenue whether you have borrowed or not.

    • Only take this kind of funding if you intend to utilize the capital.

  • Many provide the funding on a credit card that can’t be used for general business expenses such as payroll. 

    • The funding is only designed to invest in digital marketing to acquire new customers.

  • The revenue share amount may change depending on where you spend the capital. 

    • Understand if the financier has preferred vendors that can help you keep the financing costs low.

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Mezzanine Capital