6 reasons why a Working Capital Advance is the best way to finance your holiday inventory
Holidays are the busiest shopping season in the entire year, especially for online retail stores. Online US sales are expected to reach 1.3 trillion dollars in 2022. Every business would want to capitalize on this opportunity to give a push to their business. You cannot afford to lose out on sales owing to a lack of variety in the inventory. Furthermore, variety is essential to design deals and bundles to boost sales.
Ideally, you’ll have enough working capital to pay for your entire inventory upfront to get the best deals. But because the holiday sales season often comes on the heels of a much lower sales period, you might be a bit short of ready capital to buy the needed inventory.
What is the best way to finance your holiday inventory?
What can you do if your cashflow is stagnant and you just don’t have the capital to hand to take that step? eCommerce businesses have a few options when it comes to getting hold of extra funding and to maintain the inventory to capitalize on the holiday. But not every path to business finance is equal, especially for small online sellers. Here are some things to look out for when you’re looking for the best way to finance your holiday inventory:
1. A business financing option that is fast and easy
If you need to buy holiday inventory, the chances are good that you need the cash more or less immediately. The window to restock the inventory is narrow during the holiday season. You cannot afford to lose the most profitable window owing to paperwork that is associated with traditional forms of funding. You don’t have time to meet with your bank manager, update your business plan, and assemble all your business documents in triplicate. You definitely don’t have time to wait 4-6 weeks while the bank checks out your loan application. Payoneer’s Capital Advance offering is instant – you can access the working capital you need with just the click of a button.
2. Affordable fees
Getting a loan or funds on difficult terms and conditions would do more harm than good to the business. It might seem a suitable option at times, but it will drag the business into a debt trap that would be difficult to get out of. Banks, business credit cards, and other fast business financing options often come with high-interest rates. You could end up paying back far more than you borrowed and wiping out all your holiday season profit. It’s good that Payoneer Capital Advance charges one attractive fixed fee that cannot be changed, and no additional fees
3. Financing that doesn’t affect your credit limit
You need your business credit for a reason. If an emergency crops up, you need to have some wiggle room on your credit cards to cope with the cost of troubleshooting. If you use your available credit limit on your holiday inventory, you’ll have nothing to turn to if a real emergency strikes. It’s better to choose a working capital solution like Payoneer Capital Advance, which doesn’t impact on your business credit and leaves your other credit lines open in case of a crisis.
4. Funding that doesn’t risk your personal savings
Your pension, IRA or savings funds are there for a reason, and that reason is not to buy your holiday inventory. Don’t draw on your personal safety net or retirement funding as a source of short-term business finance. What will you do if something goes wrong in your personal life? Likewise, your house is your home and not a reservoir of business equity. It’s not a good idea to take out a second mortgage or HELOC to cover your holiday inventory. It’s not likely, but there’s still a risk that you could lose your house. Instead, turn to a working capital advance that keeps your personal funds untouched.
5. Borrowing exactly the right amount
If you take out a business loan, there’s a big temptation to take out more than you actually need. Once you’ve got the extra finance, you’re bound to find something to spend it on. It’s just as undesirable to discover that your loan or credit card limit is capped at less than the amount you need. A working capital advance like Payoneer Capital Advance is based on your previous sales performance, so it’s automatically designed to fit your inventory needs.
You can get up to $750,000 from Capital Advance based on the performance of the business in the past few months. The platform has designed three programs that can be picked based on the type of business. You can choose Express, which must be completed in 1 month, grow in 3 months, and in 6 months. You will have the flexibility to choose between the offers.
6. Settlements that don’t start until your profits come in
If you’re financing holiday inventory, there’s going to be a delay before you see returns on the funding. It takes at least a couple of weeks for your products to arrive, sales to increase, and receipts to clear. The trouble is that settlements for business loans begin almost as soon as you receive your funding, and even credit cards only give you up to a 30-day grace period before you have to repay the balance or pay interest. You would have to start repayment long before the profit peak, which can lead to anomalies in the cash flow and hurt the business. Thankfully, Payoneer Capital Advance works with the marketplace to automatically collect out of your future incoming payments.
Payoneer Capital Advance is an ideal solution for online sellers looking to finance holiday inventory. You’ll get your funds quickly and easily, avoid high interest rates and protect both your credit limit and your personal savings.
Learn more about how Payoneer Capital Advance can help finance your holiday inventory.
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What is the Importance of Working Capital?
Working capital is necessary to meet short-term obligations, including payments to employees and suppliers. Businesses that do not have working capital run into cash flow problems which negatively impact the business’ performance.
How Much Amount Capital Advance Offers to the Business?
Working capital offers up to $750,000 to the business based on the sales performance in the past months.
Are Working Capital Funding Solutions a Good Idea?
Working capital funding can be used to address short-term financial requirements. You should get these loans only if the business is crunched and needs additional finance to boost the cash flow. Do not get the loans just for the sake of it because you have to return them with a certain interest.
What are the Advantages of Working Capital?
Getting a loan from capital advance offers a number of benefits, including better interest rates, zero paperwork, friendly terms and conditions, and flexible plans that can be picked based upon the needs of the business.