The new financing programme relies on a revenue-based financing model that allows merchants to grow their businesses and expand their operations, secure new equipment or ramp up their marketing efforts. What makes this offering stand out is that sellers pay a single fixed fee with repayments tied to a percentage of their future sales on Amazon.
In essence, this means that repayment is only required when sellers make sales - a system that offers protection during quieter periods. Moreover, according to the official press release, the programme is accessible within a few days, it doesn’t require any lengthy paperwork, and it does not have fixed terms or late fees.
Through this new YouLend financing option, businesses can apply for funding through their existing Amazon UK business accounts for sums ranging between GBP 500 and GBP 2 million depending on their affordability. In order to become eligible to apply, businesses need to have a minimum of three months of trading history on Amazon. Once the application is submitted, Amazon positions itself as an intermediary and presents merchant cash advance offers to sellers via Seller Central.
In the company press release, Amazon officials talked about the importance of providing sellers in the UK with fast, flexible, and accessible funding. They also talked about their partnership with YouLend and highlighted the new financing programme’s potential to provide more confidence for sellers during their cash flow expansion efforts by allowing them to make repayments based on how their business is performing.
In July 2022, Jakob Pethick, CCO at YouLend, was interviewed by The Paypers and talked about the future of financing and how SMEs can capitalise on new lending opportunities.
He emphasised that the finance industry still relies heavily on backwards-looking data, such as credit payment history or time trading. Many of these data points are unavailable to SMEs, or they do not reflect their ability to repay financing which is why fundings are unfairly withheld from them.
He mentioned embedded finance and how it allows SMEs to apply for financing on the same platform where they conduct their daily business. The integration of data analysis also speeds up and simplifies the application process, allowing them to get an answer as soon as possible.
In June 2022, YouLend published a research paper that highlighted the importance of mobile payments. The company’s ‘Less Cash, More Possibility’ white paper showed that only 5% of businesses in the UK only accept cash, a phenomenon heavily influenced by a proliferation in mobile payments. The research showed that 48% of businesses have adopted digital payment methods, with female-owned businesses taking the lead, at a 51% adoption rate, relative to 42% for male-owned businesses.
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