There are many success stories for many startups that have made it big. However, in order to do this, most companies raise substantial funds, which usually results in giving equity capital to investors in return. Polish finance company Booste offers an alternative option that can mitigate the loss of equity with income-based financing. The company has secured € 12 million in funding in its Series A cycle and will soon be expanding its services in the UK and Europe.
Financing details and expansion plans
Booste’s latest funding was led by DialCom24, a well-known fintech company from Poland. The funding will allow Booste to further develop its team of 15 people while expanding and developing its platform to reach more companies across Europe.
In a conversation with UKTN, a spokesperson for Booste says more about the company, what it is targeting and more. The first information is their international expansion, which begins with the UK, Ireland and the Netherlands and will expand to other regions later.
Flexible financing for businesses
Booste’s unique offering is essentially its Income Based Funding (RBF) option. This is a different approach where businesses can rely on RBF instead of traditional bank loans that require credit checks and personal guarantees or venture capital, which could lead to loss of capital. . Instead, Booste says a business can access funds when needed and pay them back based on their income. The company is currently focusing on e-commerce businesses, especially since the pandemic has also given the industry a huge boost.
So how does the RBF option work? According to the spokesperson, companies take a loan from Booste and repay a fixed percentage of their monthly income until the loan is fully repaid, as well as a 6% flat-rate for marketing activities or a 9% flat-rate. for inventory. “Customers have the option of choosing their own repayment schedule, setting the percentage of income they want to spend on repayment (typically between 5% and 20%),” the spokesperson notes.
Boost notes that the RBF provided is intended for use by businesses for growth activities. These include actions such as buying digital ads, marketing campaigns, or spending inventory. The spokesperson adds, “Customers connect their e-commerce and marketing accounts, such as Shopify or WooCommerce, and then Booste analyzes the read-only data to create a tailored offer in less than 24 hours. If accepted, the business will receive the funds within one day.
Who is eligible?
It is important to read the fine print when opting for any form of funding, and the same goes for RBF. One of the questions our readers might ask themselves is: who is eligible to apply to RBF? Booste notes that companies must submit six months of operating history and sell through platforms like Shopify to apply for funding. After that, the company connects to its platform to access the read-only digital data to generate an offer. This is how they determine if an applicant is eligible.
Commenting on how reimbursement works, the spokesperson explains: “Reimbursements can be adjusted based on income. For example, suppose a business borrows £ 10,000 from Booste and chooses to pay back 10% of its income per month. If their income is £ 1000 per month, they will reimburse £ 100. If the income is £ 2,000 the next month, they will reimburse £ 200. And so on, until they pay off the full £ 10,000 plus a fixed charge of 6% or 9% which in this case would be £ 600 or £ 900.
With the latest funding, Booste is not just focusing on expanding its services. It’s also about building a library of content to provide entrepreneurs with the tools and knowledge that can help scale their businesses. This includes webinars, resources and partners. All of this content would be localized into different languages so that Booste could help businesses across Europe and the UK.