Running an online business without a physical shop can be challenging. Whether it’s keeping up to date with changing terms and conditions or dealing with that difficult customer, there’s always something to keep you occupied. So worrying about business finance is the last thing you need.
Sadly, banks are often part of the problem rather than part of the solution. Since the financial crash of 2008, most banks have been reluctant to lend, and all too many of them have, at best, a limited understanding of e-commerce businesses. However, there is an answer in the form of alternative finance. If you are operating as an ecommerce business, then whatever your circumstances and ambitions, it can be useful to know what funding options are available beyond mainstream sources. Here are five ways alternative lenders can help you get ahead.
Emergency loans in less than 24 hours
Sometimes your business is bound to hit a cash flow crisis or will need to make a fast investment in new stock. Alternative Finance in the form of an emergency business loan can be the answer—and an alternative lender can have the money inside your account in under 24 hours. With a bank, you could be waiting for days—or even weeks—for an in-principle decision.
Related Article: An Overview of Alternative Financing
Taking banks out of the equation, peer-to-peer lending allows individuals and businesses to lend to one another, with an alternative finance provider acting as the middleman. Easy-to-use portals make both lending and borrowing a breeze, and without the strict criteria applied by banks it’s surprisingly convenient to get the finance you need.
Financing working capital
Lack of working capital is the bane of every business, whether online or bricks and mortar. If you’re up against a deadline, an emergency loan can be the answer; otherwise it is possible to auction off your outstanding invoices, with the highest bidder effectively taking ownership of the debt and receiving full funds once payment is made.
If you import goods on a large scale from around the world, you may be able to access trade finance terms. This means that unlike a small customer, you will not need to pay upfront but may be invoiced at the time of shipment, with the opportunity to pay 30, 45 or even 60 days in arrears.
Alternative Finance for growth
If you wish to invest in the growth of your business, alternative lenders may be able to help. With different criteria from traditional banks, they can often reach quick decisions—and will frequently lend when banks are reluctant.
Running an online business isn’t easy. But as you can see, getting the finance you require to grow needn’t be difficult—let alone impossible.
Author: Carl Faulds is a business recovery specialist. He started work in the Business Recovery profession in 1990 and has continued to pursue an ethos of working with distressed businesses to help them overcome their financial problems. As Managing Director of Cashsolv, he offers advice and support to overcome cash flow problems and identify possible underlying problems that can be addressed to ensure a positive future for your business.