Are you a retailer in brick-and-mortar or online trade and looking for a way to sales financing? Then our partner Kapilendo is the right choice for you. In our article, you will find out everything you need to know about goods purchasing financing. The German purchasing financier offers an almost unique offer at a fair price via its online platform as a working capital loan for flexible interim financing (reverse factoring) as an installment loan for online retailers, retailers, and shop owners.
The goal is always: to have liquidity and cash flow. Ideally, all pre-financed goods are sold before the loan is even repaid.
Purchasing Financing / Sales Financing / Interim Financing for Online Retailers
In this article, we explain the most important terms, the process, and the numerous synonyms that generally mean the same thing.
The System of Purchasing Financing or Trade Financing (Foreign Trade Financing)
Why use purchasing financing?
Especially for small businesses, it is often difficult to make larger investments as long as the goods are in the store and have not yet been purchased by the customer. But the supplier wants their invoice paid as quickly as possible. Furthermore, the market is very fast. Therefore, one must keep up with the speed in order not to be overtaken by the competition. The solution can be goods purchasing financing.
With a purchase or sales financing, you receive a working capital loan that you can repay much later. Reasons for a loan can be the payment of a large order, taking advantage of discounts and rebates, financing during a growth phase, or bridging seasonal liquidity bottlenecks. This is because goods always have to be pre-financed, and sales to customers only occur much later. Dealer purchase financing is a rather short-term financing, but with Kapilendo you have up to 180 days to repay. Purchase financing has no impact on negotiations with your supplier; Kapilendo* merely pays your invoice to the supplier.
The goal of loan financing for goods and products is always to ensure liquidity and cash flow for the entrepreneur. Ideally, you will have already sold all pre-financed goods before the loan even becomes due.
Thus, sales financing is suitable for all companies, whether operating in brick-and-mortar retail or in e-commerce. Kapilendo’s offering is primarily aimed at small and medium-sized enterprises that want to keep up with large companies in the fast-paced market. The minimum purchase volume at Kapilendo is just €250, which makes it worthwhile even for smaller amounts.
You should know these terms when it comes to sales financing:
Below, we explain some terms related to purchase financing:
Interim financing, also known as Reverse Factoring, is a good alternative to traditional banking. You receive a loan from a purchase financier who pays your supplier’s invoices on your behalf. The receivables are thus paid in advance. This rather short-term financing method is a good way to increase liquidity and postpone the payment deadline. However, since there is a contract between the customer, the supplier, and the factor, this purchase financing is not very flexible.
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With Finetrading, the supplier’s invoice goes not to you, but to the finetrader with whom you have concluded a contract. You, in turn, then pay the invoice to the finetrader, who legally acts as an intermediary. Therefore, this is not a loan, but a commercial transaction. Here, too, you have an extended payment term. This financing option is very flexible, as the total budget can be used for various suppliers.
In exogenous trade financing, also known as foreign trade financing, funds are supplied to a company from external sources. This usually takes the form of a loan, but also includes leasingandfactoring. Leasing means the provision of products in exchange for monthly installment payments. In factoring for purchasing, outstanding customer receivables are sold to a third party. Foreign trade financing can be short-term, medium-term, or long-term.
Inventory financing is another term for goods purchasing financing. This frees up liquidity tied up in inventory, as you receive fresh capital. Inventory financing is, in turn, possible through reverse factoring or finetrading.
A refinancing involves replacing one financing instrument with another. This can occur when there is good liquidity or during liquidity bottlenecks. Consumers can, for example, cancel and pay off a more expensive old contract by taking out a favorable installment loan. In a sense, a change of provider takes place. For companies, refinancing is possible, for example, through reverse factoring.
Our partner Kapilendo for inventory financing
Kapilendo is a German purchasing financier for small and medium-sized enterprises. Kapilendo is a so-called FinTech, which describes a company that has developed financial innovations. Kapilendo’s goal – 360° banking for SMEs – is to help medium-sized companies better master digitalization with the help of innovative financing forms.
To be successful as an entrepreneur today, one must be able to act ever faster to meet customer demands.
Kapilendo offers merchant financing within a very short time and thus helps you with inventory financing. This „loan for self-employed individuals“ pre-finances your products with the supplier and thus offers you an extended payment term. This provides you with maximum flexibility in purchasing. All necessary processes are digital, uploading your documents takes only a few seconds, and the money is with the supplier within 48 hours.
Thanks to special algorithms and artificial intelligence, this „flash loan for merchants“ (both online and offline) is a straightforward, transparent, and bank-independent financing solution.
In contrast to classic reverse factoring or finetrading, everything at Kapilendo happens much faster and simpler. This is because all processes are digital and no complicated framework agreement needs to be negotiated first. You remain flexible when ordering your products and simply receive your money as with an online loan.
Registration only takes a few minutes!
Your advantages of merchandise pre-financing
The advantages of purchase financing are obvious. You don’t have to bother with expensive bank loans and spend hours talking to a bank advisor. You have more time to focus on your core business and do only what you do best, which is selling. Thanks to the installment loan, you remain flexible in repayment, as you have 180 days to do so. This gives you higher liquidity and avoids financial bottlenecks.
Another advantage is the preservation of your creditworthiness with banks, should you ever need a larger loan.
Your suppliers will also be very satisfied with you, as they will receive their money on time. Often, they grant a discount, i.e., a price reduction, for a one-time payment of the invoice. This leads to lower costs for the entire sales financing.
Kapilendo thus guarantees fast and simple digital processing of all transactions. No annoying paperwork is necessary, and your suppliers are paid quickly and reliably.
A purchase financing is also suitable for relatively young companies, as Kapilendo only requires a business activity of 6 months.
A KfW quick loan is also particularly practical and helpful.
How does interim financing with Kapilendo work?
With our partner Kapilendo, interim financing of your goods is very easy. The process is quick and simple, and everything is done digitally:
- You upload your invoice
- Kapilendo pays your supplier immediately within 48 hours
- Your supplier ships the goods to you
- You repay the invoice amount in flexible installments
Registration with Kapilendo only takes a few minutes. The requirements are that your company’s headquarters must be in Germany and that it has been in existence for at least 6 months. Sales financing is only possible for physical goods. Kapilendo therefore does not require a guarantee or other collateral.
Many people think that purchase financing would be more expensive than a bank loan. However, this is not true. The costs at Kapilendo amount to a 2% fixed transaction fee plus a variable term fee between 0.2 – 1.99% for terms longer than 30 days (depending on the respective creditworthiness). However, a large part of the costs is already covered by the discount granted by the supplier.
Furthermore, Kapilendo does not have ongoing costs such as annual fees or a minimum turnover.
You can flexibly choose between 30 and 180 days as the payment term, entirely according to your needs.
Take the opportunity now for interim financing of your goods with our partner Kapilendo. He offers you an uncomplicated and innovative solution for financing products. Stay competitive in the market, because Kapilendo is the reverse factoring provider for financing your goods. If you have any questions, please feel free to contact Kapilendo!
Fragen oder Beratung zur Einkaufsfinanzierung?
E-Mail: fi@vastcob.com
Florian Ibe
DE
