Are traditional funding options holding back digital founders?

A guest editorial by Katherine Chan, chief executive officer of Juice

As a chief executive officer of Juice, I’ve seen first-hand how challenging it can be to scale a business in today’s fast-moving digital economy. Traditional funding options like term loans and VC investment can feel like they’re designed for a different business landscape, where the pace is slower, the risks are lower, and the opportunities don’t slip through your fingers quite so quickly. 

For founders in industries like subscription services, eCommerce, gaming, and app-based businesses, the traditional approaches of venture capital and term loans can be restrictive. They don’t match the speed or flexibility critical to success. Juice was founded to change that. Our mission is simple: to provide digital founders with the capital and confidence they need to grow, on terms more flexible and suitable to match their needs. At the heart of this is our revolving credit facility, a flexible, non-dilutive funding solution that’s designed to meet the demands of today’s digital economy, compounded with our Insights to empower founders with the data and information they need to make important financial decisions. 

The problem with traditional funding

To be frank, traditional term loans can be a bit of a straightjacket as they come with rigid repayment schedules that don’t take into account the ups and downs of running a digital business. One month, your revenue could soar, and the next, it might dip due to seasonal or market trends. Term loans don’t care about that; they demand fixed repayments, no matter the business situation. 

Then there’s venture capital. While it can be an incredible resource for some, it often comes at the cost of equity. Giving up a chunk of your company early on can dilute your ownership and, more importantly, your control. For many founders, that’s a tough pill to swallow. 

The reality is that traditional funding models were built for businesses that move at a very different pace. The current, traditional methods are not built to support the agile and rapid decision-making digital founders need to stay competitive. With conventional funding options becoming more challenging to close in the current funding landscape, it’s ever more pressing to have alternate sources of capital. In the case of bank loans, while they can provide funding, their slow processes, limited accessibility, and high decline rates often hinder the growth of scaling businesses. Banks typically hesitate to fund asset-light companies due to the lack of collateral. 

A new approach to funding for digital founders

For digital founders, flexibility, speed, and control are often the cornerstones of a successful funding solution, and traditional financing options fall short in this area. They have rigid repayment terms, lengthy approval processes, and requirements to give up equity. These barriers can stifle the growth of organisations and force founders to make compromises that don’t align with their vision or goals. 

That’s where the concept of revolving credit comes into play. Unlike a fixed-term loan, revolving credit offers the flexibility to access funds as needed, repay them on a timeline that matches the business’s cash flow, and reuse the credit over a set period. The model can be a great alternative solution for digital companies with unpredictable revenue patterns. 

Revolving credit allows founders to adapt to challenges as they arise while being able to capitalise on growth opportunities without delay. It also eliminates the need to dilute ownership by giving away equity, allowing founders to retain full control over their businesses and vision. For ecommerce businesses, speed and adaptability often determine a business’s success, and access to funding options that align with these needs is necessary. 

Why revolving credit is the future

Revolving credit isn’t new. The concept has been around for consumers for decades in the form of credit cards and personal lines of credit. However, applying revolving credit to digital businesses offers a solution that can be a real turning point for SMEs. 

Digital businesses often operate with irregular revenue streams. The financial patterns can be unpredictable. The timing of recurring subscriptions or seasonal spikes such as Black Friday and Cyber Monday can dictate the patterns. Revolving credit works because it aligns with the reality of irregular revenue streams, offering liquidity when needed most and scaling back when it’s not. 

Traditional funding can’t always keep up with the pace of the digital economy for SMEs. Approvals take too long, terms are too rigid, and the funding often isn’t unavailable when needed. Revolving credit solves the old-school problems of outdated funding models and provides a level of agility that’s essential in a competitive business landscape. 

The bigger picture

As I look to the future, I see a business landscape where non-dilutive funding becomes more of a norm for digital businesses. Founders are starting to recognise that there are better options out there. Solutions that don’t require them to give away equity or bend to the constraints of old-fashioned financial products. 

At Juice, we’re proud to be at the forefront of helping SMEs break the pain barrier of funding. But this is about more than just individual businesses. When founders have access to the right financing, entire industries benefit. Innovation accelerates, competition increases, and the digital economy thrives. 

To all the digital e-commerce founders out there who are struggling to access capital that works to their tailored needs, I would say this: you’re not alone; traditional funding models often struggle to meet the demands of today’s digital businesses. It’s worth exploring alternatives that align with the pace and flexibility your business requires. The opportunities to grow and scale are there, and with the right financial tools in place, you can position your business to take full advantage of them.

Image: Juice

Guest Editorial This article was produced specially for Fintech Intel by an expert guest contributor.