Consolidating Ecommerce Loans to Simplify Finance

Ecommerce finance helps retailers get ahead of the competition, fuelling stock purchases, advertising and web development. For many online retailers, the COVID-19 pandemic heralded a new era of consumer demand, which, in turn, meant immense pressure on supply chain and stock sourcing. For new businesses, ecommerce finance provided the support needed to make critical stock investments at the right time. 

One such retailer approached our team at Rangewell after finding themselves having to spend hours each week managing multiple payments to multiple lenders. The garden furniture seller had already taken five different finance packages from five different unsecured capital lenders in a bid to fund stock that would meet customer demand. Each of these loans had its own repayment terms and were becoming increasingly complex to manage. 

For a business that needed more visibility over cash flow, inventory and lead times, having to pay five different lenders back with different amounts of capital resulted in an unsustainable position. Luckily, the retailer had approached our specialist team of ecommerce finance brokers and we were able to review the situation before we stepped in and helped. 

Why we were able to help

Rangewell’s knowledge of the finance market is unmatched. We have great relationships with lenders from all different sectors - but we also have deep knowledge of the industry as a whole and how loans and repayment terms impact ecommerce retailers. When we spoke to this client, we knew immediately that consolidating their multiple existing debt facilities into one single facility would make repayments more manageable. 

We introduced the client to a specialist ecommerce lender. They offered a loan that would consolidate all of their debts and provide an additional £60,000 finance to be used for more stock purchasing. While this new loan amount was for a higher overall total than the five individual ones, the overall monthly cost was cheaper - meaning the lender was confident in the client’s ability to repay as they’d already managed to continually repay the other facilities. 

In addition, we negotiated an interest-free period for the client, giving them four months of ‘breathing space’ in which they could focus on stock investment before the repayment terms began. 

About specialist ecommerce finance

This case study is the perfect example of why standard capital repayment loans can spell trouble for an ecommerce retailer. Facing long lead times and high customer demand means you need a way to ensure you have stock when required without relying on revenue from sales. Choosing a standard commercial loan can be a misstep if the repayment terms don’t suit this sales cycle - especially if repayment begins to threaten your cash flow position for stock purchasing. 

In order to maximise your chances of success, you need a finance package that understands the nature of ecommerce and can ‘flex’ with it. In this case, the lender was able to offer a larger overall loan that allowed the client to:

A) buy more stock to ensure they could meet demand and 

B) consolidate their other loans into a clear repayment plan. 

Importantly, the interest-free period added a new layer of flexibility to the client’s cash flow and stock lead times, giving them more control over their business planning. 

If you’re an ecommerce retailer struggling to find finance packages that suit your business and structure, talk to Rangewell. We’re an independent broker that can approach the whole of market on your behalf, but we also specialise in ecommerce funding and can quickly identify the right opportunities for your business's unique needs. 

From funding for new stock purchases, warehousing facilities, advertising costs and more, choose Rangewell to represent you and find lenders who know the industry and can support in ways you may have never considered - such as the interest-free period offered to our client in this case study.