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?"

[buywithryretail]

They approached me I was never interested it popped up. What is that supposed to mean private seller ?

[buywithryretail]

Learn to spell properly next time you make a point. It is "Scary" not "Scarry" 

[tabletop-hobbies]

There are cheaper ways to finance your business.  Most personal credit cards offer 0% on a 12 month money transfer, put it into your business as a Director's loan and repay over the next 12 months. 

A lot cheaper than youlend, iwoca or anyone else of the high APR lenders!! 

[storage.boutique]

If you put it into a Directors loan, remember you have to pay interest to yourself at a "Commercial Rate" which then also means you have to declare in your self employed tax assessment. If you are a Limited Company, you now have also got a personal tax assessment to submit - another sheer hassle. A wee tax inspection could render you personally rather liable for tax on that over a number of years - a small claims court action waiting to happen and nice and easy too.  If the Limited company has not been paying a commercial rate to the Director then you have been under declaring your income and there could also be some nasty fines. 

I call You Lend the "turnover killer". They lend you money and take a percentage from the top (they get a fee and they insure against you defaulting, so they cant lose in this deal). That percentage is now an additional overhead to you. To recover this overhead, you need to raise your prices, this reduces your sales and makes you less competitive. Falling sales means you need to borrow more money. You need to be very careful about this model. 

[cookienabber]

I've had a few runs with them now.

After a couple of loans and a frank discussion with my loan manager, I was able to negotiate myself down to a 7% sweep on £5k, which was more manageable than their default rates by far. Paid this off, but when discussing another loan, he had the audacity to offer me 22% for the same amount. This really frustrated me as he seemed to have forgotten our past discussion over my views on their service. I ended negotiating all over again and ended up with these offers:

£2.5k at 10% sweep

£3.5k at 7%

No here is where it really hits the fan. I accepted the 7%, signed the paperwork and was promised it would be in my account on a particular day, giving me time to secure some deals. When the funds didn't show up, I rung up and enquired, to be told my account manager was unavailable, but was apparently discussing with credits to try and get £5k at 10% (I was obviously unaware of this). A couple of days later when I finally heard back, it turns out the £3.5k was no longer available as an offer, neither was this £5k at 10% sweep, so my only option was the £2.5k at 10%. I had to take this to salvage the deals I had been preparing, but don't think I was happy about this, or missing out on what I had planned with the extra £1k.

You can imagine my frustration with the entire experience. Not only did this entire deal blow up in a number of other ways (I'll spare you the details), but it is clear to me that YouLend are only interested in lending small amounts with aggressively repayment schemes. My experience tells me they are not interested in legitimately supporting a business with long-term growth, as this no doubt ties up their funds for longer periods. By sticking with small amounts with high spreads, 16-20% interest rates and fees on top, they get the most bang for their buck, getting their money back ASAP so they can repeat the cycle.

It was interesting to try their service as it did help out in some ways, but for long-term organic growth of a business, I've decided to move on from this experiment, as they are not compatible with my loan term business plan. Having looked into a government-funded start-up loan, based on my healthy business finances, I've secured a funding pattern to support business growth over the next 3 years. I would suggest any registered business that meets the criteria for this loan type, with a long-term plan, take a look. 

[storage.boutique]

Speaking as an accountant, I totally agree. One caveat, there are a lot of lenders out there who say they are government backed to play on your memory of the Covid days when you did get government backed loans. If it is genuinely government backed you will pay a significantly lower rate of interest, pay over longer term (if you want) and arrangement fees will be minimal.

YouLend, Amazon Finance, or PayPal hit you for a substantial upfront fee which comes off your first payment. That fee is to pay an insurance policy so that if you default the insurance pays out. The interest rate they charge you as an APR will also be shocking. 

[cookienabber]

Absolutely. 6% Apr, no fees, 60 month plan or pay back early with no charge. They key difference was the application process required accounting records of you business, a business plan, examples of how the money would be spent. My underwriter was GC Business Finance, through the government website. They showed genuine interest in how I would use the money. The gripe is you need 6 months of registered business accounts to get through this, but this is because they take a proper look, genuinely setting up a scheme to support a business over the long term.

In my case, they could see the business was profitable, growing, and I had a clear business plan (stage 4, having shown my business succeeding my previous 3 stages) . My offer was setup to pay me every 3 months, to follow my growth, which was pretty much in line with what I asked for.

Without a doubt, anyone with a healthy business, with at least 6 months, should look into this. Just make sure finances are in order, as if they reject your application, you can't apply for another 6 months, as they expect you to correct any concerns raised.