{"id":1566,"date":"2023-09-07T11:52:00","date_gmt":"2023-09-07T10:52:00","guid":{"rendered":"https:\/\/storfund.com\/?p=1566"},"modified":"2026-01-28T13:57:32","modified_gmt":"2026-01-28T13:57:32","slug":"working-capital-options","status":"publish","type":"post","link":"https:\/\/storfund.com\/en\/working-capital-options\/","title":{"rendered":"Working capital options in an economic crunch"},"content":{"rendered":"
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In 2023, Europe and the US are facing a very different economic situation than they were a year ago. There is a cost of living crisis in Europe and North America, inflation is expected to remain high throughout the autumn, and interest rates are still rising.  <\/p>\n\n\n\n

Ecommerce has been hit from all sides as consumers have decreased expenditure, marketplaces have increased commission and their reserves and business borrowing becomes less affordable. But businesses still need finance to grow. In 2022, 61% of UK firms with turnover between \u00a350,000 and \u00a3250,000 sought finance<\/a> to help with working capital, according to the British Business Bank. <\/p>\n\n\n\n

In this new economic world, it\u2019s useful to understand financing options for ecommerce businesses if your marketplace business is still healthy and growing.<\/p>\n\n\n\n

What drives your financing decisions?<\/h4>\n\n\n\n

First, think about what\u2019s behind your financing decisions and what you want to achieve. Do you need more cash flow to buy more inventory, invest in staff or new products, or for a marketing push? Make sure your growth plans are realistic and the numbers stack up \u2013 check how much different financing options will cost you (see our table below). This is especially important given that the cost of borrowing is higher than it was 12 months ago. Create cash flow projections to show what impact business finance could have, and stress test against the worst-case scenario.<\/p>\n\n\n\n

Which finance type is right for you?<\/h4>\n\n\n\n

While there may be fewer business finance products on the market than there were 12-18 months ago as lenders become more risk averse against a challenging backdrop, there are still options available. Here is an overview of some of the debt financing options you might consider for your business, including their benefits and downsides.<\/p>\n\n\n\n

Revenue-based financing<\/h4>\n\n\n\n

Also called working capital financing, this is a loan which is paid back directly to the lender out of future revenues from your marketplace sales. There will typically be a fixed repayment target over several years, but there may be repayment flexibility.<\/p>\n\n\n\n

Pros:<\/strong><\/p>\n\n\n\n