Ebay via YOULEND - anyone got any pros and cons

[eddy130_1]

Hi All,

I hope sales are good!

Today we received a generous offer from eBay Capital that would be enough to rent a unit for a year. I believe that you pay a daily percentage of sales. The previous similar type of loans via P-pay were very straightforward and handy for a few thousand pounds now and then.

I’ve heard both good and bad things about You Lend. Does anyone have any stories or information before we consider contacting them?"

[typo_lee]

Avoid. They take 20% - 30% at source before ebay take their fees and as its clear ebay is going down the pan if your sales drop like ours have massively then you will be left with hardly any income after they take their percentage and ebay take their fees! Its very dangerous and could cripple your business. I think youlend need to tighten their lending criteria as if ebay does indeed go down you will be left with a loan to pay but no sales to fund it.

[floral.lines.supplies]

Wouldn't touch this with a barge pole!

[eddy130_1]

Very true, how is the customer protected if youlend or indeed eBay went south. They customer seems unprotected if there`s a concern.

Thankfully my business bank has been generous and supportive.

[pg_kicks]

It depends on the amount you wish to take and the repayments. 

I have used it a few times when I have been able to get a good amount of stock, going to the bank may have been easier and cheaper but it takes 24 hours and I don't need to do much. I never take the max amount they offer but always try and pay it back around 30% of my sales, they usually charge around 5/6%. It works fine for me as I only use it to buy stock which in turn creates more sales so the repayments havent crippled me or anything. I guess if the sales didnt come then ti would be a struggle.

[cavalierpostcards]

Their communication skills are terrible.

[jace_mindu]

I'm glad I came across this topic to evaluate the figures involved. It's alarming how much of a rate they take and I can't see how any business could consider such an agreement, which is blatently going to have a signifcant impact on profit margins.

I would advise looking at Klarna instead. I've been using for them for a months now and the benefit of being able to buy in bulk and spread the cost out over 3 months, has been a substantial benefit to my growing business. 3 months might seem short, but consider how you can use it multiple times. Instead of buying £1k of stock in one order, I could pace myself by placing 4 weekly orders of £250 over a month, Klarna devides those over 3x payments, and what I'm actually paying is £77.52 a week over 3 months (4.3 weeks a month), with NO INTEREST.  I use my outlook calender to monitor each payment date and ensure my 3x purchases are spread out evenly enough, sometimes just waiting a day before ordering/paying to avoid multiple payment days. With Klarna accepting orders as low as £35, you can build your balance up gradually as you learn to manage your payments. OUTLOOK!!! The real benefit to this is that you can start small, make responsible payments and grow your business organically. That's a lot safer than any loan which can effectively put you over your head with too much stock too soon. They have just implemented a temporary 'virtual card' option, which once you set up, you can use anywhere. Just be sure to screenshot the details as they will not show you the card details in your account once it is set up.

[therenewalworkshopltd]

I've not seen a wholesaler/manufacturer using Klarna, ever!

As far as I'm aware, they only offer basically credit for purchases on retail sites.  Now I may be wrong, but that is way Klarna has been setup originally.

They are not cheap at all and if you are getting interest free, the retailer is paying the cost!  Which in turn, will be included in the price you pay.

So unless I'm missing something, it is simply not something that a business can use for credit!

[vintagewatchpart]

As well as getting letters through the post and monthly emails about this, I am shocked that my private account is now seeing  "Get the funding your business needs" emails... 3rd month in a row now.

My private account is not a business! My parents' Ebay account is also seeing the same, an account they just use to sell off old clothes or unwanted items they've hoarded. 

How can encouraging private individuals to receive 4-figures of money to fund a non-existant business be justified from Ebay and how much does this reek of desperation to further bleed the funds out of us?

[typo_lee]

Will just be a standard mailshot and there is ZERO chance of a private seller gaining their hands on a youlend advance as you DO HAVE to be a business seller and submit all relevant company details and youlend have to see all your ebay transactions.

[japanjomatcg]

i would image it has to be something like 10% but i am also not seeing anything about the actual fee for taking out such a loan.

[japanjomatcg]

This is sadly not true, and you do not have to send anything in, a few people i know have been accepted because they saw the message in the inbox, they applied and got it almost right away with a lot less paperwork than you would think! almost an alarmingly small amount considering the ramifications of what is happening! maybe the new lot of emails has gone out because they now accept private sellers. i think once they get a good look into your ebay they base it solely on that. 

[jace_mindu]

I'm referring to Klarna as a means of spreading costs, not exactly credit as it's not providing any additional long term funds. As a seller, being able to benefit from buying in bulk, but spreading that cost over 3 months, is helpful. It essentially frees up 2/3 of the cost to spend on other stock items rather than entirely on a single product line. With no interest and limited in credit amount, it's a little safer for small sellers.

Just compare that to a loan that would be a significantly higher amount of credit with interest added, that can leverage a business severely if products don't sell.

[dch2112011]

As many posters have stated this type of loan can be extremely precarious in terms of it is solely dependant on your turnover.  

What it does not take into account is your profit margin which on a competetive market place like e bay can be extremely slim.

What can happen is it starts ok but if the loan repayment is greater than  your net profit on your sales used to repay the loan once the loan is spent you will need to borrow more money to maintain your outgoings wih no disposable income coming in.

This is how you are sucked in to a cycle of loan chasing a loan.

Of course it is sold to you to expand your business by buying stock - yes it may work or it could just increase turnover to service the loan and  so the cycle of loan chasing begins again

[vintagewatchpart]

Is there any way of opting out of the messages sent for YouLend? And also the junk mail sent through the post encouraging me to get the loan? 

It reeks of desperation to be regularly receiving these messages, same thing all the time (although this time the figure was blank in all the messages I received on my accounts so someone did a great job there!)

If I don't sign up the first 17 times with the same marketing message why would I sign up this time?

[jace_mindu]

I reached out to them and decided to give them a go. I'm going to break down the pros and comes and how I think they should be used.

They came back to me and I was quite upfront about the controversies online. No surprise, it's not all as straight-forward and they are not a scam.

First off, due to their links with eBay, once you show interest and request a quotation, they are granted access to your sales data so they can determine how much they are willing to lend you based on your average sale performance. They even look at feedback and the types of products you sell. They seem quite familiar with eBay and with accurate data, they have an advantage over banks or other credit companies.

Yes they do take payments out of your sales, but this is worked out in a weird way. They advised me that the most I could borrow was around £9,000, but the total value paid back showed a mark up of around 17%. Not great! However, their system is no like typical credit loans, as I raised my objections to the interest rate and they were able to work out that if I only took £3500, based on the final total, this work out at 11% interest.

OK, so 11% seems average to me, but bare in mind, this is for just £3500. Compare a credit card that you might be able to stretch up to a few thousand and you are looking at 15-18.9%. PayPal credit is charging around 23% now. If you wanted to get a better rate from a bank, you would be looking at a loan of around £10-15k at least to get a rate of about 8-9%, and they will set a schedule that has you paying back interest loaded installments from the offset; no buffer for bad days!

As for the minmum, yes this does exist. For £3500, YouLend are receiving 16.55%  of my eBay payout amount (not revenue) and YouLend a minimum of £80-90 a week. If this seems high to you, then read on.

YouLend is not for starting businesses up, opening the door for people to follow their dreams. They are interested in eBay businesses that are already doing well and showing consistent and growing income. £80-90 a week is not reflective on a £3500 loan, it's based on the idea that you already have a succesful business and the loan is a cash injection to help you expand. So you should already have enough cash flow to support those payments.

Where I think people have gone wrong, is they don't have a healthy business to start with, so a loan is likely not the way to go. Perhaps they don't know how to spend it, or don't have the ability to make full use of it by securing deals with suppliers, or maybe they cannot manage the increased business.

For example, some may take a few thousand to buy more of the same stock they have, then compain that they don't have more money coming in. Here's a shock; more stock doesn't mean more sales. It might be a means of securing lower prices, but having more of a product doesn't increase demand (not going to explain the supply/demand philosophy here and if you need to ask, then you are my point).

I received my cash injection within a day and I used to it buy a new range of products that I was already researching, sitting in my supplier basket. DIVERSIFICATION!!!! Essentially, if you want your business to grow, you need to expand into new products to reach new markets and consumers. A cash injection, if used properly, can expand your business substantially. I make a point of listing a new product every day and I'm seeing a growth of 37.7% over the last month.

As for YouLend themselves, I found the lady I dealth with professional, efficient (I had my documents within the call) and understanding over my concerns about interest rate and not taking on more money than I had a use for. She was willing to negotiate a lower amount to provide the rate I was looking for and understood the benefit of securing these terms knowing that based on my figures, I could be paying this off and securing a new loan within 4 months. Having received the loan and put it to use, I'm paying off roughly 1% a day, so 4 months is very accurate. Their website provides an account where I can monitor this and I am not being chased by them to take out or pay more in.

Bare in mind, I have a healthy business and this extra cash went straight into stock I had already researched and intended to purchase. I didn't buy more of the same and expanded my catalogue with new products, which are selling! A cash injection of this sort is not to pay off debts, buy furniture or pay wages, it is a cash injection that should be utilised to expand your business. If you can't make that work, then you should be reevaluating your business model and finding ways to improve your current business setup so you can make a cash injection work. Banks would typically be very critical before offering a business loan and they will expect payments to be made come hell or high water. YouLend are fairer and base their loan on your sales performance, so you can get cash quickly and easily, but do not take this for granted and make sure you can utilise it first, and don't be afraid to ask for a lower amount that's more manageable. Once you have paid off 75% of your loan, you can request more.

I hope this helps!

[eddy130_1]

Thank you, 

I would still be very reluctant. Personally PAYPAL capital was way better. They are not a bank and thus if it went wrong, guess who they would come after.

[eddy130_1]

Yes, you could become unstruck if your sales are lower. Who could have predicted the many interest rate hikes? and then the nosedive of sales!!

eBay these days is very rocky, and the huge unceratinty of sales makes taking direct loans from YOULEND based on sales scary. YOULEND want complete control of your banking too it seems. 

PAYPAY captital was way better. 

[pillarboxred]

You would still owe money if the daily sales didn't materialise in the desired quantity. I am puzzled how, after all these years of selling a vast number of items, you still need to borrow money to continue. If sales are slow, borrowing to keep going isn't a good idea. Are you actually earning a living or working for the bank? You might be better putting up more storage shelves at home.I f you have an idea to expand the business in a new way, a loan would be worth considering but remember that banks always have an eye on the collateral you own (usually your home) and are quite happy to take that if you can't meet repayments.

[jace_mindu]

---

@eddy130_1 wrote:

YOULEND want complete control of your banking too it seems. 

---

Explain this please?

[jace_mindu]

There seems to be a lot of sceptism and mis-information here. Taking out a loan doesn't entitle a bank to take your home. That's excessive and wouldn't hold up in court. They would more likely have to negotiate a payment structure. Banks sending bouncers to your home would destroy their reputation and I can only see them ever doing this is you had specifically set up your home as collateral for a loan significatnly high enough to justify this.

I took out a YouLend loan and I'm now looking at a 66.6% jump in revenue over the last 31 days. My situation was specific though, in that I have been growing an increasingly diverse range of products, aiming to list a new item every day. I already had items in my supplier baskets which I had researched and determined would be good products, so I order them immediately after receiving the funds.

The mistake I suspect people are making, is assuming buying more = increased sales. Big mistake. Buying in bulk might reduce your bottom line, but doesn't necesarily increase demand for your product. Buying office supplies, equipment etc, again, doesn't increase demand/sales, even if this makes operations more efficient.

I'll also point out that I took just a third of what I was offered, not that my daily payments would be any different in percentage, but that I simply didn't have a new for the extra funding. I'm currently ahead on my repayments, 'ahead of our projections' they say, with 21% paid off within 30 days already.

I will state this clearly; If you have a successful business, are growing in size/revenue and the only thing holding you back is a lack of capital/scale of operation and you are frustrated with not being able to buy additional products, that you have researched and are confident you can sell at a profit, then additional funding is worth considering. YouLend understand eBay and you should be frank with them. By basing your repayments from a percentage of your sales, YouLend gives you some buffer space to pay back your loan gradually, based on organic sales, even if you have some bad periods. They are not sinister and will agree a fixed mark up with you before acceptance, so you know how much the loan will cost you and any weekly minimum before committing. Since a smaller loan gave me a better rate, there really isn't any benefit in taking on more funds than you require, and although I don't know if this will increase the % they take from your income, it will certainly take you longer to pay off. Any other type of loan that demands fixed payments, is more likely to get you into trouble if you hit problems, and a rate lower than the 11% I'm paying, is likely to require more funds than I wanted for greater risk and financial strain.

So, be honest about your business position, don't take more than you need, use it to expand your catalogue or get better deals on your best selling items with items you have researched. Once you pay back 75%, you can apply for more, so with a manageable amount, you have an opportunity to try the service out without putting your business into any finanical difficulty.