For generations, businesses have operated a physical storefront to sell products or services, engage with customers, and convey a brand experience. It works well – but this century has seen a new commercial domain enter the picture, and now any company that doesn’t provide a high-quality web offering is left fighting an uphill battle.
In fact, the rise of eCommerce and the commercial internet has been so spectacular that vast numbers of companies are now exclusively eCommerce businesses. Consumer eCommerce now accounts for 30% of the total UK retail market, with businesses driving over £99 million in profits (International Trade Administration) and servicing an estimated 60 million digital buyers (Statista).
It’s easy to see why – eCommerce businesses often generate unprecedented profits, due to a variety of factors such as having no need of office space, reduced cost of operations, or lower salary obligations.
But running a successful eCommerce business all hinges on one crucial component: secure and reliable cash flow.
Practical access to capital means organisations can act on their ambitions (like purchasing stock or marketing) and start manifesting long-term goals and, oftentimes, that capital comes in the shape of a secure business loan or finance facility.
eCommerce entrepreneurs have a task on their hands, to find the right finance solution and gain a competitive advantage in the online marketplace. This article is here to help you do just that.
The importance of growing your eCommerce store
The world of eCommerce is constantly evolving, and for online businesses to stay relevant and competitive, they must continue to grow and adapt.
Here are some key reasons why growing your eCommerce business is essential:
- Increased revenue: With an expanded product range and improving your website’s functionality, you can attract new customers and increase sales. A larger customer base means more revenue and increased profitability.
- Competitive advantage: As the eCommerce industry becomes more crowded, businesses that stand out are more likely to succeed. Growing your business can give you a competitive edge and help you stand out in a crowded market.
- Better customer experience: With growth comes the ability to improve your customer experience. By investing in customer service, shipping, and website design, you can provide a more seamless and enjoyable experience for your customers.
- Improved brand recognition: By growing your business, you can improve your brand recognition and reputation. A well-known and respected brand can attract new customers, drive repeat business, and increase customer loyalty.
- Flexibility: As your business grows, you gain more flexibility to experiment and try new things. You can invest in new marketing channels, launch new products, and expand into new markets, all of which can drive growth and revenue.
Funding for your eCommerce business
Once you’ve decided to grow your eCommerce business, funding will represent the financial fuel needed to make it happen. Here are some of the most popular funding options available for eCommerce businesses:
Recovery loan
The UK government introduced the Recovery Loan Scheme to help businesses recover from the impact of COVID-19. This scheme offers loans of up to £2 million to businesses that have been impacted by the pandemic. It has now been replaced by the growth guarantee scheme, and it can be used for any legitimate business purpose, including growth and investment.
Unsecured business loans
Unsecured business loans do not require any collateral and can be used for a range of business purposes. The lender assesses the borrower’s creditworthiness and offers a loan based on the borrower’s financial history and the perceived risk of the loan.
Interest rates for unsecured business loans can vary widely, so it’s important to shop around for the best deal.
Secured business loans
Secured business loans, on the other hand, require the borrower to put up collateral to secure the loan. This collateral would need to be a UK property with enough equity in it to secure the loan on. Secured loans often come with lower interest rates than unsecured loans, as they are less risky for the lender.
Merchant cash advance
A merchant cash advance is a type of financing that is based on a business’s credit and debit card sales or eCommerce. The lender provides a lump sum payment, which is repaid through a percentage of the business’s daily card or eCommerce sales. A merchant cash advance would be an attractive option for eCommerce businesses, as a large proportion of revenue is likely to come through card transactions.
Revolving credit facility
A revolving credit facility is a type of loan that allows a business to borrow money up to a pre-approved limit.
With a revolving credit facility, the business can draw down funds as and when needed, and interest is only charged on the amount borrowed. This can be a useful option for eCommerce businesses that need flexible funding to support their growth.
How does eCommerce funding work?
Accessing the right kind of funding can provide the financial foundation your eCommerce business needs, and the good news is, the process couldn’t be easier. Below, we’ll walk you through three steps to take before your company gets the cash injection it needs to grow and thrive.
- Get your loan application started: Simply input a few basic details into our online calculator. This is so we can check your credit eligibility with various lenders; we’ll aim to come back to you as quickly as possible.
- Get matched to the best lenders: You’ll have the chance to assess your funding options from a selection of the most viable lenders, hand-picked for you. We take all the important factors into account, including interest rates and the amount of capital available, to provide you with the most suitable options.
- Receive your payment in days: With Aurora Capital, you won’t be left facing a frustrating period of downtime while you wait for your finance to arrive. Thanks to the help of our funding specialists, you’ll have rapid access to that necessary injection of cash in a smooth and streamlined process.
Benefits of a business loan for growing eCommerce companies
Every forward-facing eCommerce business has its ambitions, aiming to grow sustainably and reach ever-more profitable levels of business success. The issue is that, sometimes, it isn’t possible to make those gains without a solid foundation of capital upon which to build.
It’s a catch-22: you can’t achieve increased profits without some investment, but without those profits at hand, performing the necessary expenditure is impossible. This is where eCommerce funding can make all the difference.
With a secure and reliable foundation, your business is positioned to make the necessary investments to upgrade operations. Below, we’ll examine just three of the uses your business could put that finance towards.
Marketing services and advertising
It’s a self-evident truth of modern business that, in order for new customers to engage with your brand and make a purchase, they first need to discover you and what you have to offer.
There’s never been a more competitive commercial arena than the internet space, where your eCommerce business might potentially be pitched against thousands of competitors. This underscores the importance of effective marketing and strategic advertising.
Online store or website upgrade
Did you know that 81% of consumers conduct online research before making a purchase? (CSA.) In this day and age, it is absolutely vital to make a good showing in the online space – especially if you’re an eCommerce business. The digital sphere – the internet – is your backyard, after all.
Despite this fact, surprisingly, over one-third of businesses in America – the consumerist capital of the world – still don’t have even a rudimentary website (Oberlo).
In order to stay ahead of the competition and make sure your business always comes across well, you might wish to invest in a website upgrade. This could mean a design refresh, a new UI, some conversion rate optimisation, a content campaign, or some behind-the-scenes technical tweaks; whatever shape it takes, periodic upgrades to your website shouldn’t be neglected.
Buying stock/equipment
Equally important is ensuring that your product or service offering is optimised. Delivering the goods in an efficient and quality fashion is a competitive difference-maker, and anything less than ‘premium’ is a chink in your commercial armour.
But even with the best will in the world, this pursuit of quality is made practically impossible if your business is forced to operate with archaic, antiquated systems due to a lack of funds.
Perhaps you don’t have the capital to invest in modern, better-quality production machinery; or you need to expand inventory in order to meet a larger order volume.
In any case, buying improved equipment or necessary stock is just one of the business loan benefits you unlock with access to funding.
Secure & reliable funding, with Aurora Capital
For most businesses, there comes a time when funding is required to provide the foundation for growth and ongoing success – whether that means purchasing stock, investing in marketing, upgrading the website, or otherwise.
But how do you apply for a business loan, and more to the point, what type of loan is most suitable for your online eCommerce business? This is where Aurora Capital can help.
Our team has years of experience helping businesses and entrepreneurs access the finance they need to facilitate growth. By comparing 50+ lenders, removing the risks of independent sourcing – and saving on the hassle, too! – we help companies find the best lender for their goals, in an incredibly time and cost-efficient way.
So find and compare the financial solutions best suited to your business; contact us now to get started.
