online retail store - Funding options?

[minceljan]

I run a second-hand online store [LTD] and looking for some advice on my financials. First year of company we hit a revenue of £150,000, which I'm pretty satisfied with. Our profit margin sits at around 23%, and i think its decent for the industry im in (retail) ?

One of the challenges we're facing is the turnover rate of our items, which can take up to 12 weeks. I believe we have the potential to double or even triple our revenue if we can secure more funds to invest in inventory. I have a trusted supplier.

I'm considering taking out a loan to boost our inventory and speed up the turnover rate, but I'm not sure if that's the right move. Would a loan be a good option for a business like ours? Any advice or insights would be greatly appreciated.

 

[japancool]

Negotiate with your suppliers for payment terms.

 

[minceljan]

Negotiate with your suppliers for payment terms.

Not an option.

I had an arrangement with one supplier - he gave me stock and said that i can pay him back in a month. He ended up calling me every second day asking for payment, this was very annoying so I decided to just pay in full when receiving stock.

 

[Paul Kelly ICHYB]

he gave me stock and said that i can pay him back in a month

Did you get that in writing?

Are you registered for VAT?

What did you with the £40k profit you made?

How can you speed up your stockturn?

 

[Mark T Jones]

No something I know about, but I believe some online portals offer stock loans?

Otherwise, look at the Government Start Up Loan.

 

[Paul Kelly ICHYB]

No something I know about, but I believe some online portals offer stock loans?

Merchant Cash Advance - Several merchant account providers offer this and even Paypal does (did?).

 

[japancool]

Paypal, Stripe and others offer it, but having used them, I'm not convinced it's a good idea if your margin is 23%. The latest offer I've had from Stripe is £10k for a £1300 fee, but that's based on allocating 20% of your payments to repaying, which would in this case mean wiping out profit for 6 months.

 

[WaveJumper]

Did you get that in writing?

Are you registered for VAT?

What did you with the £40k profit you made?

How can you speed up your stockturn?

It would be interesting to see answers to these. Plus based on the money going through the company bank account I would be surprised if the bank are sending letters every month offering ridiculous amounts of overdraft facilities.

However depending on the answers to the questions raised above is the OP sure of the numbers and not trying to run before they can walk.

 

[Mark T Jones]

Paypal, Stripe and others offer it, but having used them, I'm not convinced it's a good idea if your margin is 23%. The latest offer I've had from Stripe is £10k for a £1300 fee, but that's based on allocating 20% of your payments to repaying, which would in this case mean wiping out profit for 6 months.

I've been approached by companies wanting me to offer my hospitality customers similar facilities I've resolutely declined to do so for 2 reasons:

1. I'm not in the business of funding cashflow.

2. They were extremely unforthcoming about the real cost of borrowing - which instils no faith whatsoever.