A guide to ROAS financing for online businesses

Getting an eCommerce store or SaaS business to generate steady revenue is a challenge, but that’s not always the hardest part of running an online business. Paradoxically, it’s when a business really starts to scale that most founders hit a major hurdle. 

When sales for a small business begin to take off, the costs for advertising do too. The big challenge for companies on an upward trajectory is to fund ad spend before profit from sales starts flowing into the bank. 

It’s a catch 22. You know you need to fund the ad spend to generate more sales, but you don’t necessarily have the cash flow available upfront to make big investments in your campaigns. 

Unless you can fund your ad spend before sales take place, you either need to accept a slower rate of growth, or plough more money into building your business organically.  

Table of contents

• The importance of ad spend finance for online businesses
• Who is ROAS financing for?
• Ad campaign finance for online businesses from Bloom
• Bloom revenue-based finance
• Get financing for your ad campaigns today
• ROAS financing FAQ

The importance of ad spend finance for online businesses

If your ad spend offers a profitable return on investment, it’s a no-brainer to find a way to fund it and scale it.

The more you can afford to spend on your advertising campaigns, the more revenue you can generate. This, in turn, means you have more available working capital to invest in further advertising or other crucial business areas. 

While scaling paid digital marketing campaigns is hugely beneficial for increasing sales, it’s easier said than done. As the business grows, so does the amount you need to spend on advertising – what’s more, you need to spend the money upfront, before making sales. 

This problem is made worse by the fact that online businesses can't always procure loans from banks and financial institutions. These traditional lenders have strict criteria for loans, making the approval process difficult for online entrepreneurs. 

And even if you do fulfil the rigid requirements, approval may be a long time coming. Meanwhile, with the fast-paced nature of online startups, your venture could go under while you wait. 

Revenue-based financing can help online businesses that already have a steady income stream and need an additional boost of funding to continue on their upward trajectory. Financing your ad spend as an online businesses is a quick, safe and effective way to realise the potential of your growing business.

Let's see how return on ad spend financing can help you grow.

Who is ROAS financing for?

ROAS financing is perfect for eCommerce and recurring revenue businesses that want to run targeted promotions with paid advertising. Online businesses can quickly access financing and make repayments linked to performance, rather than a fixed scheduled amount each month, regardless of sales volume.

This means you can ride seasonal sales peaks more efficiently – with enough cash to fund your ad campaigns, you can scale your online advertising campaigns and take advantage of your proven return on ad spend.  

Keep these in mind:

• Ad spend financing is meant to fund growth for businesses that are already starting to scale, or even experiencing hyper-growth (doubling revenue by at least 100% every year)

• You can apply even if your company is not producing profit at the moment, as long as it you can demonstrate projected growth in the future.

• If you already have equity-based financing and want more money without diluting shareholder's equity, return on ad spend can be a great option.

Ad campaign finance for online businesses from Bloom

At Bloom, we understand that ROAS is predictable for many established eCommerce and recurring revenue businesses. If you have a proven track record of generating £3 in revenue for every pound spent, you’ll also know that ROAS financing is a relatively risk-free option for your business. 

Revenue-based ROAS financing is a great option for funding your online marketing efforts if you have predictable ad spend. You can then use the extra revenue generated from an ad campaign to repay your debt, one sale at a time.

Free up working capital

You can use ROAS financing to fund predictable marketing campaigns, but the benefits don't end there. By retaining your working capital, you can to hold cash back to invest in other crucial areas of your business, such as:

Get better backing when funding your supply chain

The purchasing power can help you negotiate on terms and improve net profit margins for your business.

Introduce new products and collections to your store

With ad spend catered for, you free up your funds to invest in research and development, tooling, and everything else that goes into widening your product offering.   

Fulfil recruitment costs

By taking on capital to fund your ad campaigns, you can retain working capital for staffing and onboarding top talent.       

Hire website developers

The longer a user stays on your website, the more likely they are to make a purchase and the more profitable your ad campaigns will be. That's what scaling should look like, right?

Pay the tax man

Most businesses fail to recognise the impact of end-of-year tax and VAT payments. The trouble is that these costs only grow with the business, drastically impacting its cash flow.

A rainy day fund for your business

With ROAS funding, you can retain working capital as a safety net instead of scrambling at the last minute to find money to fix unforeseen issues.

Bloom revenue-based finance

Bloom offers revenue-based financing for eCommerce and SaaS businesses of any type or size. We help you finance your growth, and you can repay the finance based on your revenue generated without diluting your control in the company.

ROAS financing or revenue-based financing is a simple way of getting funding and paying it back when you get paid by your customer. Revenue-based financing enables companies to retain equity and make financing repayment without giving away control. 

Why choose Bloom for ROAS financing

ROAS financing from Bloom will allow you to fund your business growth and help you achieve success by harnessing the following benefits:

Fair terms

Fixed payment plans that can quickly drain capital, especially after a slow month. At Bloom we offer fair terms based solely on your revenue.

100% your equity

With revenue-based financing you don't need to dilute shares, so you can retain control of your business.

Flexibility 

Pay us when your customers pay you. It's that simple.

Expedient service

If you're eligible, you'll have the funds deposited into your account within 24 hours of applying. 

Check your eligibility for digital marketing financing via Bloom

Funding ad campaigns with revenue-based finance helps small businesses without capital dilution or the fear that the bank might take away everything because of a few missed payments . Bloom offers revenue-based financing with simple criteria. The Bloom eligibility criteria require SaaS or eCommerce businesses to:

• Show a revenue of £10,000 per month 

• Have been operating for over a year

• Generate revenue via eCommerce or SaaS subscriptions

How much does ROAS finance for online businesses cost?

Bloom understands that managing cash flow with an online business can be a struggle, and the difficulty of getting loans from banks does not make it any easier. Bloom is your capital partner for growing your business, your online presence, margins and inventory stock, allowing you to reach your potential.

Bloom offers funding from £10,000 to £5 million, based on the needs of your business. Unlike fixed costs under other financing companies, we only take a percentage of the sales you generate, plus a simple fee (as low as 0.03% per day) that the client agrees on. The percentage of the sales will only be taken until the principal amount and fees are paid off. 

How to apply for Bloom ROAS financing?

Applying for financing through Bloom is a simple process. All you have to do is visit Bloom, check your business eligibility, connect your accounts, and select a funding offer.

Bloom can offer funding of up to £5 million within 24 hours of applying, so your cash flow remains unaffected. You're free to use these funds for business needs such as ad campaigns, digital marketing, investment, and more.

Get financing for your ad campaigns today

A good online business is ahead of its competition. Your online business will need funding, and instead of going to banks and undergoing long, tedious processes to get approval, give us a call. Whether you are looking to improve your digital marketing practices or increase your ad spend, Bloom is here for you.

Apply in a matter of minutes and kickstart your online business journey by supercharging your advertising efforts. To learn more, call us on +44 204 579 4867

ROAS financing FAQ

When can I apply for additional funding?

Once your business has paid off 60% of its balance, you can apply for additional funding.

Is there an application fee?

We offer a straightforward financing structure and do not charge an application fee.

What percentage of revenue will I need to share with Bloom?

This depends on the gross margin, net income, and net profit of your company . Based on revenue and profit projections, most partners share 5-20% of their sales.