E-commerce Brand Scales with Revenue-Based Financing

The Client

GreenPaw Pet Supplies is a direct-to-consumer e-commerce brand selling eco-friendly pet products. Founded by husband-and-wife team Alex and Jamie Thompson in 2021, the company started as a side hustle selling sustainable pet toys on Etsy.

The Challenge

The Growth Trap

By mid-2024, GreenPaw was hitting a frustrating ceiling:

• ●Monthly revenue: $50,000
• ●Profit margins: 35%
• ●Problem: Couldn't scale advertising because they couldn't afford more inventory

The Math Problem

To reach $100K/month, they needed:

• ●$40,000 additional inventory
• ●$25,000 increased ad spend
• ●$10,000 operational buffer
• ●Total: $75,000

What they had:

• ●$15,000 in savings
• ●Maxed-out credit cards from initial launch
• ●No traditional business credit history
• ●18 months in business

Why Traditional Options Didn't Work

• ●Bank: "No" - Too new, no assets, inconsistent income pattern (e-commerce seasonality)
• ●SBA: Too slow - Would miss Q4 peak season
• ●MCA: Too expensive - Factor rates over 1.4 would kill margins

Finding the Solution

Alex found Banked.fyi while researching "e-commerce financing options." After reviewing their situation, we recommended revenue-based financing (RBF).

Why RBF Was Perfect

1. ●Payments flex with revenue - Pay more when sales are strong, less when slow
2. ●Speed - Funded in 5 days (vs months for banks)
3. ●No personal guarantee on house or cars
4. ●E-commerce expertise - Lender understood the business model
5. ●Reasonable cost - Total payback 1.15-1.25x (much better than MCA)

The Structure

Revenue-Based Financing:

• ●Amount: $80,000
• ●Total payback: $96,000 (1.2x)
• ●Repayment: 8% of monthly revenue
• ●Estimated term: 10-12 months

How payments would work:

• ●$50K revenue month = $4,000 payment
• ●$100K revenue month = $8,000 payment
• ●Automatically adjusts via payment processor integration

Getting Approved

Day 1: Connected payment processor (Shopify Payments), submitted application Day 3: Review of 12-month transaction history, offer extended Day 5: Documents signed, funds deposited

The Execution

Phase 1: Inventory (Month 1)

• ●Ordered $45,000 in inventory
• ●Negotiated volume discounts from suppliers
• ●Stocked best-sellers plus new product tests

Phase 2: Advertising (Months 1-3)

• ●Increased Facebook/Instagram spend from $500 to $2,000/day
• ●Launched TikTok advertising
• ●Tested influencer partnerships
• ●Implemented email marketing automation

Phase 3: Optimization (Months 3-6)

• ●Cut underperforming products
• ●Doubled down on winners
• ●Improved conversion rate through site optimization
• ●Launched subscription program

The Results

Revenue Growth

Key Metrics

ROI Analysis

• ●Financing cost: $16,000 ($96K - $80K)
• ●Revenue increase: $150K/month ($1.8M annual increase)
• ●Profit increase: ~$57K/month
• ●Cost as % of profit: <3%

Key Takeaways

For E-commerce Businesses

1. ●RBF aligns with e-commerce - Payments match revenue fluctuations
2. ●Speed matters for seasonal businesses - Don't miss your window
3. ●Invest in proven channels first - Scale what's working before testing new
4. ●Inventory is the unlock - Can't sell what you don't have

Financial Strategy

1. ●Time your funding - Before peak season, not during
2. ●Calculate true cost - RBF at 1.2x is much better than MCA at 1.4x
3. ●Understand payment mechanics - Know how repayment will flow
4. ●Have a deployment plan - Know exactly where funds will go

What's Next

With the initial financing paid off and a proven growth model, GreenPaw is planning:

• ●Product line expansion into pet food and supplements
• ●International expansion starting with Canada and UK
• ●Retail partnerships with several interested chains
• ●Series A exploration for larger capital raise

What started as a side hustle is now a legitimate brand—and it all started with the right financing at the right time.