Business finance for dropshipping & online resellers

Why dropshipping cash flow is front-loaded

A reseller's money goes out before it comes in. You pay for advertising the moment a campaign runs, and you settle supplier orders — often prepaid in full to a wholesaler or overseas manufacturer — before the customer's money is yours to spend. Marketplaces, payment gateways and platforms then hold settled funds for days or weeks, and may keep a rolling reserve against refunds and chargebacks. The result is a business that can be selling well yet starved of working cash exactly when it needs to buy the next batch of stock or scale the ad that is working.

Where the cash gets stuck

Three drains recur: ad spend that has to be funded up front before any sale converts; supplier prepayments and minimum order quantities that lock cash into inventory in transit; and the payout lag plus held reserves on marketplaces and gateways. Returns and chargebacks claw back money you had already counted, and a winning product makes it worse — demand scales faster than your cash can, so the better it sells, the tighter the squeeze.

What online resellers use funding for

The most common, sensible use is scaling a proven product: pouring more into an ad set that already converts, and buying the inventory to meet the demand it creates, before the payouts catch up. Resellers also use a facility to secure bulk supplier pricing, bridge the gateway reserve and payout cycle, and stock ahead of a seasonal surge. The logic is to fund spend that pays for itself inside the facility's life. Test the maths first with the return on borrowing calculator.

What to weigh before borrowing

Be honest about whether the product is genuinely proven — borrowing to scale a tested winner is very different from funding a speculative launch. Watch your true margin after ad cost, platform fees, shipping and a realistic return rate, and confirm it still covers the finance. Match repayments to your payout rhythm, and ask for the total repayable, not just a rate — see business finance fees explained. This is general information, not advice on your accounts.

How short-term company finance fits — no personal guarantee

Credicorp lends to the limited company, not to you personally, so there is no personal guarantee and your home is not pledged against the facility. As an exempt business lender, Credicorp provides working capital to UK companies rather than regulated consumer credit, keeping the assessment on how the business trades. A business loan or the flexible Credicorp Flex line gives an online reseller a controlled pot to fund ad spend and supplier orders, repaid as payouts settle. You can apply online.