One seller’s experience with ecommerce lender iwoca
One of the first duties of any business owner is to ensure that cash is managed properly and part of this is setting up lines of credit – particularly when times are good. This not only provides a source of stability, it also means that the business can take advantage of profitable opportunities quickly when they arise – inevitably just after you’ve paid the VAT-man or the landlord and cash would otherwise be scarce!
We use a high-street bank, so that was the first place to go and chat about a loan. We’ve known our manager for years and it was quick to get a loan at a good rate approved – but the paperwork for the guarantee was more problematic. First it was lost by their security department, then it needed us to hire a lawyer to look at it and give us advice, and then then turned into two separate lawyers and so on and so forth. After 6 months, it was clear that this wasn’t something that was going to happen quickly or cheaply.
What of the alternative finance market? An initial call to Funding Circle revealed that they weren’t flexible enough to take a business with an overseas Director. Not a good start. I knew iwoca and their founder Christoph from their seller meet-ups and so – out of curiousity and frustration with the long-winded bank process – I filled-in their online form one Sunday evening.
Iwoca’s big idea is that by giving them access to your eBay or Amazon account, they can see your trading history and so extend an appropriate line of credit without further ado. On Monday I was pleasantly surprised to receive a phone call asking for a little more information and had a quick chat with Natalie who had already been assigned as our account manager. She was able to liaise with their credit team to ensure all their questions were answered. A few scans of passports, a penny transferred from our bank account and the usual ID and credit checks, and by the end of the week, we had a line of credit established.
I have to say I am properly impressed by the speed at which this whole process was completed. It’s definitely not the cheapest loan we’ll ever be offered, but the rate is clearly stated and without any other fees (banks seem to love adding on an arrangement fee or transfer fee). If this is typical of what the alternative finance market has to offer, then the banks will have their work cut-out to keep their dominant position.