eBay is moving into the finance world with the launch Capital for eBay Business Sellers announced today, with the aim to support small businesses and address the cash flow crisis caused by the pandemic.
Over the next few months, many of the government’s financial assistance schemes such as furlough, loans and grants will tail off. However research, released today from eBay UK, which finds a third (31%) of the UK’s 5.9 million small businesses face going bust in under a month due to inadequate access to financing.
The research also found that two in five (40%) small businesses have been denied a loan from a bank, while one in three (31%) have been turned down for a loan by the government. When considering Covid loans specifically, 44% said they have not accessed any Covid support in the past 12 months. eBay want to bridge the gap for marketplace sellers, hence the launch of Capital for eBay Business Sellers today.
Capital for eBay Business Sellers (CEBS) offers a variety of financing products to support the 300,000 small and medium sized businesses that sell via eBay to 29 million active monthly buyers. This is eBay’s biggest push into financial services to date, since it started rolling-out the management of payments made on the platform last year.
“Small businesses make up 99% of all UK businesses, yet they have been financially excluded from traditional lenders and let down by COVID support schemes. That’s led to a serious under-investment, leaving many at risk of going under while others are prevented from reaching their full potential.
Capital for eBay Business Sellers is intended to help plug this gap, giving small businesses quick access to a range of financing options. With 300,000 UK small businesses trading on eBay, this proposition will help them reinvest, protect jobs, and succeed, even as the government’s support schemes dry up.”
– Murray Lambell, UK General Manager, eBay
Do we need another finance product?
There are plenty of alternative finance products out there – the first to launch in the UK was iwoca, and they were followed by the likes of PayPal Working Capital and Amazon Lending. However the big attraction of having a variety of lenders is the ability to select the offer that works for your business. Some charge fees up front so no encouragement to pay down the cash advance early while others have monthly interest so there’s definitely an incentive to clear the loan as quickly as possible. Some want a fixed repayment each month whilst others take a percentage of your sales so you pay more when sales boom and less when sales slow down.
The clever thing that eBay are doing is putting together a bundle of three different lenders each with a different offer. This will give businesses the flexibility to choose the type of financing that works for them all within CEBS and integrated so that lenders can assess your eBay business and use your past performance as a basis for lending.
“The online application took about 5 minutes. After accepting the 6 figure offer, we received the funds the very same day. Greater access to financing will significantly help us to grow and bounce back after what has been a tough year for so many small businesses.”
– Stan Weekes, founder, SW Trading Ltd
First Capital for eBay Business Sellers lender – YouLend
YouLend is the first of three financing platforms announced today as part of CEBS, giving eBay business sellers access to funding ranging from £500 to £1m, which is then repaid directly from their sales. With eBay already having access to seller trading history and performance, eligible sellers only need to complete a simple application form, receiving offers in minutes, with more than 90% of sellers receiving funds the very same day they accept an offer.
This financing solution helps small businesses overcome the many challenges that have left them financially excluded from high street bank loans and COVID support schemes. Lengthy application forms, years of trading history, high interest rates and high risk payment structures are just some of the pain points that CEBS aims to remove for business sellers in need of finance.
It also makes it possible for thousands of entrepreneurs and start-ups that have sprung up on eBay UK throughout the pandemic to access funding to grow and succeed. The entry level is low – You are eligible if your business has been trading actively for more than 3 months and is making more than £500 in monthly sales!
Hundreds of eBay businesses have already benefited from CEBS, with two further financing partners set to be announced in the coming weeks.
How YouLend works
- Get funds quickly
Apply in minutes, get quote same day, receive funds in days. - Repay as you earn
Repay with a small, fixed percentage of daily sales (typically 5 – 20 %). - Simple affordable fee
Pay only a flat fee that is agreed up-front (from 3%). - Flexible top-ups
Once you’re on board, receive funding top ups same-day.
If you want to find out more and potentially apply for finance then you can do so here.
“Our focus is on giving leading ecommerce platforms, tech companies and payment service providers the ability to offer their customers rapid funding through our technology platform. We’re delighted to partner with eBay UK to support their business sellers thrive and grow.”
– Jakob Pethick, CCO, YouLend
Why CEBS?
The CEBS launch is the next step in eBay UK’s ongoing commitment to supporting entrepreneurs and small businesses, delivering economic opportunity and making it easier to set-up, grow and scale. It follows a number of initiatives launched in the past year to help businesses and individuals set up ventures or open new revenue streams online, reducing or removing eBay’s fees through programmes like Pay As You Grow and Free Online Shop Window.
One Response
Yea!! , more credit options!!
I say that with a bit hypocrisy as i have used all of those listed in the past, and for various reasons!!
Luckily and more importantly, as an online business with the selling opportunities that Online sellers have had since March 2020, i do not have any current lending or even use my overdraft.
To put it bluntly, if you are an online only seller and you have not managed to get your business in to a good state of affairs over the past year, then your business has some serious issues and more debt isn’t going to solve them, only prolong the issues.
Now, there will be caveats to that general statement, but if your in need of lending to to cover existing debt, there is something wrong.
I saw an issue with my own business at the end of 2019 in that the short term debt i built up wasn’t coming down quick enough for my liking at the times it should (Q4).
The main reason was too much stock which i put down to taking advantage of qty discounts offered and buying more than i usually would and then it not selling as it used to, mainly because everyone else was getting the same qty discount!!
At some point, this stock needed paying for and then i needed to use lending to do this, and pow, there goes your qty discount advantage!!
Its a basic business rule, Dead stock will kill your business, we all know it, but sometimes its hard to stick to with discounts being offered, fear of missing out because your being told there is limited stock of a particular line or there are upcoming supply issues and before you know it, you have a full warehouse!!
I have Reps now still pushing the Supply chain issues mantra and i have decided to stick to my own business rules and we are doing fine.
yes, we will miss out on few selling opportunities, but we will not be stuck with stock that for whatever reason the buying public decide its not for them, and then you get the offer list from the supplier because they cant shift it and your already sitting on it in your warehouse.
There is one valid reason why banks don’t lend willy and indeed nilly, because the business asking for the loan has not shown a good business case for doing so and in my experience the marketplace lenders ask very few questions, if at all. They just go on sales history which as we know is only linked to turnover.
After saying all that, there are of course some good business reasons to take advantage of business lending.
There may well be that one exclusive offer that really is to good to pass up!!
And i know from experience that a choice between filling out an 8 page loan application from the bank and clicking a few buttons online, i know who i went with.