Surge in online retail activity and invoice finance

Small businesses operating eBay online stores received a welcome boost recently when it was revealed that in general the online business sector has seen rapid growth over the past 12 months.

Findings, from research conducted by the online auction site eBay, concluded that the number of small businesses with an annual turnover of £1million had in fact doubled over the last year, thereby showcasing the UK’s e-commerce sector as a European leader.

The eBay research found that some 127 small business enterprises are expected to reach the turnover milestone of £1million in 2010, compared to 2009 figures in which 66 businesses achieved the milestone.

Similar research from an industry body for online retailing (IMRG), also saw a rise in profits declared from online business enterprises, reporting that UK consumers spent £5bn on online shopping in July 2010 alone. This is an 18 per cent like for like rise on the same period last year.

With many eBay businesses looking to free up finance for stock, marketing and further e-commerce development, online retailers can utilise the services of invoice discounting and factoring to smooth over cash flow problems. Such finance options can help a small business drive forwards, making the most of the rise in online market activity.

With many merchant service providers offering UK online businesses varying degrees of terms, from next day settlement to 90 days, and bank overdrafts at an all time low, cash flow problems are anticipated as UK online businesses struggle to turn around settlements into cash in order to purchase more stock.

Invoice finance products such as invoice factoring and invoice discounting and assest backed commercial finance such as inventory finance are being used more than ever as levels of traditional bank borrowing remain below demand.

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