Follow cash from the supplier to the platform payout
The cash cycle can include supplier deposits, production, shipping, customs, storage and a delay before a marketplace or processor releases funds. A sale shown on a dashboard is not necessarily cash available in the bank.
Model refunds, chargebacks, platform reserves and the timing of VAT or other liabilities. Borrowing against gross sales while ignoring settlement deductions can overstate the cash available for repayments and the next stock order.
Loan or revenue-based funding?
A business loan generally creates a defined payment schedule. Revenue-based finance may use a fixed fee with sales-linked collections, but some providers also offer fixed repayments. Confirm the exact product, not just the brand or the phrase flexible funding.
An ecommerce company with established receipts may be assessed using processor and platform data. A pre-revenue shop is a different risk. Minimum revenue and trading history vary; do not treat a provider’s calculator illustration as a universal eligibility threshold.
ROAS is not the same as repayment capacity
Return on advertising spend measures sales relative to ad spend, not the cash profit remaining after product cost, delivery, returns, staff and finance. Increasing ad spend can create a larger funding need even when the reported ROAS looks positive.
For an assumed £50,000 of sales, £20,000 product cost, £10,000 advertising and £7,000 fulfilment and refunds leave £13,000 before other overheads, tax and debt. A sales deduction must be tested against that remaining cash, not only the headline revenue.
What to prepare for a funding assessment
Useful information includes business bank statements, platform and payment-processor history, management accounts, stock forecasts and existing facilities. Reconcile reported sales to actual settlements so a provider can understand deductions and timing.
Ask what access a funder needs, whether it is read-only and how long it lasts. Do not share login credentials informally. Explain reliance on one marketplace, supplier or advertising channel and show a downside plan if that channel is interrupted.
Compare the funding terms with your stock cycle
Check the net advance, total fixed fee or interest, collection schedule, early-settlement terms, security and any personal guarantee. Repayment may occur faster than expected during a successful launch without reducing a fixed fee.
Compare provider reviews alongside the agreement. Wayflyer and Uncapped do not offer identical products, and neither name implies a suitable offer for every online seller. Shareholder’s general referral is not a live quote or a direct application to every provider discussed.
A few things worth knowing
Common questions
Can a new ecommerce store get revenue-based funding?
A product that requires historical sales will not be satisfied by a forecast alone. Check start-up-specific options and the actual provider criteria.
Is a fixed funding fee the same as APR?
No. A total fee does not include the effect of repayment timing. Faster collections can change the annualised cost even when the fee stays the same.
Can funding be used for advertising?
Some products allow this, subject to their terms. Assess contribution margin and cash settlement timing rather than using ROAS alone.