6 Reasons Why a Working Capital Advance is the Best Way to Finance Your Holiday Inventory

Payoneer Community
Payoneer Community
December 1, 2018

As an eSeller you’re always aiming for great sales – especially before the holiday season where annual online shopping rates peak. Having a large inventory with plenty of choices is vital to bring in revenue during the holiday sales season. Ideally, you’ll have enough working capital available to pay for your entire inventory upfront, so that you get the best deals. But because the holiday sales season usually comes on the heels of a much lower sales period, you might find yourself a bit short of ready capital to buy the inventory you need.

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. 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. 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 Low fees

If you’re looking to grow your business with plenty of holiday stock, you don’t want to undermine that growth by having to pay high interest rates. 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 a good thing that Payoneer Capital Advance only charges a single fee as low as 0.6%.

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.

6 Repayments 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 repayments 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. That’s not very long to see a profit on your borrowing. Thankfully, Payoneer Capital Advance works with the marketplace to automatically take repayments out of your incoming payments, so you won’t repay the financing until your sales volume increases and accounts receivables clear.

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 early repayment requirements, 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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