As an eCommerce business owner, you know that scaling your business requires capital. However, traditional financing options like bank loans or venture capital may not always be the best fit for your business. This is where revenue-based financing comes in.
Revenue-based financing, also known as revenue-share financing or revenue advance, is a type of alternative financing that provides capital to businesses in exchange for a percentage of their future revenue. Unlike traditional financing, revenue-based financing does not require collateral or equity, and the repayment is tied to the business’s performance.
One success story of revenue-based financing in Egypt is FlapKap, the revolutionary revenue-based financing platform that is transforming the eCommerce landscape in Egypt, the Middle East and Africa.
Founded in 2022 by Ahmad Coucha and Khaled Nassef, FlapKap helps eCommerce businesses scale and grow by providing them with flexible payment terms and access to working capital.
CEO Coucha had noticed the late payment and working capital issues businesses faced during his time at digital agency Kijamii, where his clients often paid late, sometimes up to 120 days from when a sale closed. The idea to replicate a similar operation for MENA popped up after witnessing the rise of revenue-based financing platforms in the US and the West.
FlapKap finances eCommerce platforms’ expenditures and recoups its money when these brands pay back a percentage of their revenues until repayment is complete. It adds a fixed fee to whatever amount its clients access on its platform, split to be paid in percentages from their revenues within a specific time-frame.
Revenue-based Financing: A Game-Changer for eCommerce Business Owners in Egypt
Revenue-based financing will become a popular choice for eCommerce businesses in Egypt because it offers several advantages over traditional financing options.
Firstly, revenue-based financing is generally faster and easier to obtain than bank loans or venture capital. This is because revenue-based financing providers focus on the business’s revenue and future potential rather than its credit score or collateral.
Secondly, revenue-based financing is more flexible than traditional financing options. The repayment terms are tied to the business’s performance, which means that if the business has a slow month, the repayment amount will also be lower. This allows the business to manage its cash flow more effectively.
Thirdly, revenue-based financing is a non-dilutive form of financing. This means that the business owner does not have to give up equity in their company to obtain financing. This is especially important for eCommerce businesses that may not want to give up control of their company or dilute their ownership.
In conclusion, revenue-based financing is a game-changer for eCommerce businesses in Egypt that are seeking to scale and enhance their performances online.
The success story of FlapKap and its funded SMEs shows that revenue-based financing can provide businesses with the capital they need to grow, without the drawbacks of traditional financing options.
If you’re an eCommerce business owner in Egypt, consider revenue-based financing as a viable financing option for your business.