Online businesses have been thriving over the last two years, showing no signs of slowing down when it comes to their growth or popularity among UK consumers.
Unsurprisingly, there has also been an increase in demand from online businesses for flexible funding, up 47%* according to London-based lender 365 Business Finance. As a provider of merchant cash advances, this dramatic rise seen year-on-year, when compared to 2020, shows how quickly some online businesses are expanding, requiring extra finance.
SMEs frequently use merchant cash advances to assist with cashflow, for purchasing additional stock and equipment, and for the expansion or refurbishment of premises. However, in ecommerce, the cost of continually updating and improving online shop fronts often also requires extra investment, with flexible finance a simple and fast solution, with no APR, fixed term or fixed monthly payments.
As the ecommerce industry continues to grow, the average amount advanced by 365 Business Finance to online outlets has increased by a substantial 35% during 2021, with a reported 56% rise in 2020 compared to 2019.
Managing Director at 365 Business Finance, Andrew Raphaely, said, “We are now working with more and more SMEs in ecommerce, as the COVID-19 pandemic has accelerated even further the needs and desires of consumers to shop online from the comfort of their own homes.
“It’s important to appreciate that online businesses have to invest heavily in their online presence, in terms of website development, putting funds aside for monthly running costs, search engine optimisation and the advertising and marketing required to make an ecommerce venture a success.
“The fact that with a merchant cash advance, these ecommerce businesses are only required to repay funds through a small percentage of their online transactions, means their cashflow isn’t negatively impacted, as they only repay the advance when customers pay them.”
For further information about how merchant cash advances can assist online businesses, and how to apply for £5,000 to £200,000, go to Online Businesses Finance | 365 Business Finance or read through this helpful guide to ecommerce funding.
* Latest data from 365 Business Finance, as of November 2021.