Clearbanc specialises in providing working capital to online businesses.
It aims to provide unsecured and equity-free venture capital to fast-growth e-commerce businesses. It is a form of venture capital designed to appeal to those groups which typically struggle to secure such funding – for instance, women and minorities.
Specifically designed for e-commerce companies (and so-called Consumer SaaS – software as a service companies), Clearbanc insists that the sums advanced are not loans. They require no company or personal assets as security, no guarantor of repayment, and no credit checks.
Instead, the bank assesses your own commercial performance in terms of revenue, marketing expenditure and other data to calculate the extent of any funding it is prepared to offer. As a result, it is as though you re spending the bank’s rather than your company’s capital, says Clearbanc.
The calculations based on your predictive growth allow the bank to advance additional capital of between $10,000 and $10 million. If you initially chose not to take up the full amount of funding for which you qualify, or if your income unexpectedly increases – thanks to the opening of a new income stream, for example – or if you have already repaid at least 80% of any previous advance, further funding may be made available.
Since your application is assessed according to the actual performance of your business, no credit check is necessary and there should, therefore, be no impact on your credit rating.
Advances of the agreed amount of working capital are made through the issue of a Clearbanc Marketing Card.
This can be used – up to the agreed limits of the advance – for expenses related to any part of your marketing budget including, for example, the purchase of digital advertisements.
Recognising that e-commerce funding is typically required at short-notice, Clearbanc aims to make its capital growth funding available within less than 3 days – unless you are applying for an exceptionally large advance or the request is unduly complicated.
Eligibility is based on a minimum $10,000 monthly revenue for your business, which must be incorporated as a limited liability company, and which can demonstrate at least six months of regular and consistent income.
The advance of funds attracts no fixed or variable rate of interest as such but instead incorporates a fixed fee, calculated according to the performance of your business, the amount advanced and its repayment terms. In that way, you are aware of the cost of the transaction from the outset.
Repayment is calculated as a percentage – determined when the advance is agreed and in the typical range of 1% to 20% – of your ongoing sales transactions. So, there is no fixed repayment date, but all depends on the relative success of your business and its actual sales performance. Such a repayment schedule, therefore, helps to maintain a healthy cash flow for your business.
The bank is based in Toronto, Canada, but also currently operates in the UK and the United States, having raised investments of some $420 million.
All data cited in this article is correct at the time of writing.
Speedie Consultants are an approved Clearbanc Agency. Visit Clearbanc here