“The number of digital traders in the country is increasing every day” – the capital market

“There are a significant number of merchants in the Internet commerce arena in Israel and it is increasing every day. Courses and schools that teach digital commerce are completely full, and see the great interest of Israelis in online forums. BizPortal Kobi Lekser, CEO of Nella Digital who announced yesterday that he will co-operate with

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Public is a new company for financing merchants on e-commerce sites, such as Amazon, eBay, Jet, Shopify and more.

In fact, two companies will be established – one that will appeal to the local market, and the other that will provide loans to merchants digitally from abroad. -Commerce that strengthened even before the Corona, and even more so during it when merchants were forced to close their stores following the closures.

The largest companies in the digital merchant lending market together roll in about $ 1.4 billion a year. The average loan amounts are $ 15-25,000, and the standard interest rates are about 1-2%. So why do merchants actually have to take out a loan, if the price at which they are selling their goods embodies within it the shipping costs, the operation of the store, and also a coupon that the seller cuts? Lexer explains that the need arises from the payment model of online trading platforms.

“Amazon, whose service will first contact merchants on its platform, pays them once every two weeks,” he says, “that is, if a merchant sells for ten thousand dollars – that money he will meet in two weeks. We offer a prepayment service so the merchant can get the “The money within a day after the sale. This is called ‘factoring’, and it is a well-known field in many worlds outside of e-commerce, and in e-commerce it is flourishing in the United States while in Israel we will be the first swallow.”

And why do you actually need you? Banks do not give loans to small online businesses?
“Unlike banks, our loans will be more friendly. Our collateral will be online assets, while banks or non-banking entities will ask you to pledge an apartment or other property.”

How will you carry out the underwriting?
“We will check the sales and rating / feedback history of the seller and weigh everything. Our threshold conditions will not be too strict and we will accept merchants from any field. Loans will be provided in such a case. ”

Under the agreement between Nella and Value Finance, the latter will provide the Israeli company with approximately $ 1 million, of which $ 300,000 as an owner loan and the balance as a credit facility for the loans granted by the company to be established.

It should be noted that loans for the purpose of advance payments are only one service offered by credit companies to the field of e-commerce. Another service, is loans for periods of three months to six months for the purpose of growth and expansion of the business within the trading arena, and it is likely that sooner or later Nella’s new activity and the value of finance will turn there as well.