inKind
Capital
Need to solve cash flow issues? inKind can provide capital, in addition to attracting and retaining high-spending customers.
An effective interest rate of less than 1%
Since we provide capital in the form of purchased gift card credit, not a loan, your cost of capital is your marginal cost of servicing the gift card. When gift cards are redeemed, your effective interest rate on your capital is less than 1%.
Getting funded
Say your business buys a product for $3 and sells it for $5. This business has gross margins of 40%. Say your business needs $100,000 of working capital. If your business is a fit to work with inKind, then inKind could write you a check for $100,000 in exchange for $150,000 of credit to your business. inKind then sells that credit as high-dollar value gift cards to users in the business' community for a discount (e.g. $1,000 purchase for $1,300 of credit).
Servicing gift cards
Typically only 80% of the dollar value of a large gift card is ever redeemed; but in a worst-case scenario, say 100% -- all $150,000 worth of credit -- is redeemed. In this scenario, your business pays back that credit by servicing it at cost. In a business with 40% margins, that cost is 60% of $150,000 — a total of $90,000, less than the initial check size. Compare this payback to the equivalent loan you would receive from a bank to be repaid over three years. Paying back $90,000 on a principal of $100,000 over a period of three years is the equivalent of taking out a $100,000 loan with an APR of -3.33%.
Using breakage
Recall that in most cases, only 80% of the dollar value of a gift card is redeemed. In this scenario, your business must service $120,000 worth of credit, since this is 80% of $150,000. Servicing $120,000 at cost, 60% in this case, is $72,000. Paying back $72,000 on a principal of $100,000 over a period of three years is the equivalent of taking out a $100,000 loan with an APR of -9.33%.
Upfront Capital
It takes time to sell gift cards, and without inKind, you're guessing to see how much you can sell on your own. inKind's predictive model allows us to be confident in our ability to sell your gift cards, so we'll give you a lump sum upfront, before we even start marketing your business.
Get started today
Are you ready to grow? Apply today to get your funding and grow your business