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The above replies are correct. They make no allowance for if you want to maybe close your shop for a few weeks for Christmas /vacation. They are still wanting their cut (even if there are no sales) and hassling you to pay by bank transfer. Never had this probem with PayPal WC as they worked over a 3 month period so it was easy to catch up on missed sales. I would not take a second loan.
You need to consider compound growth. A £3k loan for stock, that you sell for a 10% profit, leaves you with £3,300. Repeat the transaction cycle and you end up with £3,630.
The issue with YouLend is they take a 10% sweep from your sale amount, once you factor in eBay fees etc, they are taking 20% of your income. So instead of 10% profit, you make 10% loss. As there is no cap on how much they take over time, it is more than just losing 10% of your sale, but the negative compound effect of losing 10% off every sale, having 10% less to buy stock, 10% to cover expenses etc. So instead of growing your business, your loss on all your sales shrinks your business at an increasing rate.
Consider the chart below. If you started with £1,000 and make 10& profit in a month, then reinvest those funds back into the business and repeat, your hit over £3k revenue in 12 months. If you borrow £3k from YouLend, on a 10% sweep, assuming this is 20% of your income, your 10% loss per month takes you down to just making £647 after 12 months. Assuming your overheads are £1k, you are operating at a loss after 9 months and still haven't paid back YouLend.
This is an illustration and obviously differs by what deal you make with them and how profitable your business is. Generally 10% profit is good and the minimum I aim for when listing a product, but the more income you make, the more YouLend take as it's tied to the same percentage with no cap.
I've had a very frank conversation with the staff there about this issue and there are aware of it, agreeing they need to look at eBay in a different way. There is room to negotiate down the sweep rate. It's claimed it can go as low as 3%, but the weird thing is, the more your borrow, the higher the sweep amount. Completely the opposite of how a loan usually works! It seems the sweep is covering risk. If you are making enough revenue, you can borrow a small amount and argue that with your revenue, you could pay it back very quickly.
Consider this, you make £200k a year revenue and want to borrow £5,000. With a 10% sweep, (20% if income) you're pay that back within 2 months. Why would you do this? Let's so it's to take advantage of a bulk deal, or cover postage fees over Christmas, or replenish stock sold over that busy time period. Your revenue keeps you far above your overheads line and makes you low risk, so you can likely argue them down closer to 5%. Their sales staff would likely go for it as they make money on the contract fee.
Just don't put that scenario to someone only making £20k a year, as the impact of losing 20% of revenue to a small business, is too impactful at such an early stage. I've said it before, register as a business and get a business credit card. I use CapitalOnTap and it works for me.
Honestly, I think this thread is at a point where people really need to be more specific about their circumstances. The general idea of YouLend has been down to death and if people really want advice, give us specifics!
