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Scaling from 2k/day to 10k/day when Cash Flow is tight (18)

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Yoo guys,

Currently been doing Native search arbitrage, numbers are good and theoretically I can scale from my current 2-2.5k$/day to 10k and even 100k without much problems.
The only problem is Cash flow, as you know with search arbitrage you get unfavorable payment terms. I negotiated net 15 (payout is 15 days after the calendar month).

on Taboola I've got a Credit Line of 40K$, which is favorable because they are net 30. My current monthly credit line with them is 40k$, which is a small number. I request a CL increase but likely won't see a massive favorable increase due to my relatively low capital (their margin for safety) in the banks.

Any suggestions on how do I scale?
I don't want the snail scale path

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I wud suggest you to wait for the payment to come and then re-invest it.
Because if you scale like crazy and at the end if your network declines to pay you(for whatever reason), you'll be in big problem.

Also, what's your ROI on search arbitrage?
Which network are you working with? Google Adsense? or something else?

How much money did you have to spend with Taboola in past, to get a credit line of $40k?

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In case of standard AM offers this is quite easy, all you need is to negotiate faster payments and the problem would vanish in about 2 months, but as you mentioned, it's not that easy with arbitrage campaigns.

This being said, you don't have many options

You can try to talk to the advertisers/search feed owners and explain the situation, in theory they should be willing to get more volume but there is a reason why they stick to these payment terms, it's a bit risky for them.

Same with taboola, you might negotiate some increase but getting higher line of credit will take time too.

The best opion imo, is to talk with your bank. Banks have so much money that they cant spend these days, maybe you can get a nice credit there? I assume you are moving nice stacks of $$$ through your account, so they might be willing to help you out. Have you tried that already?

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Yeah, currently every month I'm taking relatively small loans to bridge cash flow. My accountant suggested me taking a couple more months, creating a business plan, and then potentially getting a loan of half a million or so.
The problem is the interest, they would give me like 8% yearly interest while my ROI is 10% that's not so pretty, but I think I could handle it.
Another option is to maybe partner with someone who is in the same "genre" as I am and they got big stacks, rent an office near them, and let them have 15% of the gross profits while using their capital.

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Since my ROI is 10-20% (then also factor the logisitics costs, and personal living costs), snail scale is not an option...

In regards to credit line it depends spend history and your bank equity to provide insurance for the credit, you need to share accountant data with them etc, show that you're serious. No hard numbers here really, it's a negotiation after all.

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One thing to keep in mind here, your ROI is not yearly, it's ROI on whatever you are able to spend, right?

So let's say you can scale to $10k a day, which is $300k a month and you're on NET15.

Whatever you spend in a month, you will get paid in the middle of the next month, so you realistically only need about 450k to be able to run this volume.

$450k loan at 8% would mean you have to pay $36k interest at the end of the year.

Now the $300k monthly spend * 12 = $3.600.000 in spend with a ROI of 10%, which would mean $360.000 profit.

$360.000 profit and $36.000 interest... sounds good to me

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@roiter123, isn't there a danger of getting account banned...in your case?
Because people who do adsense arbitrage, this thing happens with them all the time.

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Yeah that sounds good in practice. I think it would be hard for me to get such a loan approved.

That's why I was thinking this. You also get accountability partners that will make sure you're staying on track.

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No, because I'm doing search feed arbitrage, which is perfectly legal.

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I’m guessing a business credit card like Amex with unlimited spend is out of the question?

Especially with Taboola, since they don’t charge the nonsense 3% fees anymore for CC

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Probably wont make sense for him those are usually charge cards and you have to pay off the balance in full each month.

I think the bank loan might be something to try sooner than later if you got something working capitalize now.

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Isn't it like you either pay it off in full or get charged an interest? That's who most of the credit cards I had used to work.

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Of course you can get a high limit AMEX or any credit card but from my understanding the ones touted as "unlimited spend" are usually charge cards that need to be paid off monthly now maybe you could charge it then negotiate terms kind of like a ask for forgiveness later but that might hurt your credit.

Though at the same time unless they have a history of you balling out on other accounts its unlikely you could go nuts on the card in the first place.

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Used to be cash card, pay-full-balance-end-of-the-month only, a few years ago they opened them up and you can run as a normal CC as well (with insane APR as usual, but not too bad if only 1-2 months over).

True on the acual 'unlimited' part, there is a hard cap based on your spend, but it's still really fucking high. I was scared when they told me how much I was allowed to spend.

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With an AMEX, it depends. At one time, most were charge cards and not credit cards. The balance had to be paid in full each month or they hit you with massive penalties and interest. They do have credit cards now and may have moved primarily to that model. Just something to verify if getting an AMEX.

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Yup, I guess it depends on the particular bank and CC type. The one I have now allows me to spend a certain amount and I can pay it off whenever I want. When I pay it off in a given period of time (I think it's 45 days now) there is no interest, but whatever remains unpaid I need to pay quite high interest on monthly.

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1. If your ROI is only 10% at your current scale you will not scale to 100k/day and probably not even 10k/day

Work on your ROI more at this scale

2. People do not get paid ALL THE TIME, the fact that it is a search feed doesn't not make you immune. At any given time they can say "bot traffic" and not pay you some or all of the money you think you are getting. With Search Feed "some" is pretty frequent and if your ROI is only 10% you end up negative.

3. If 8% APR is the lowest you are gonna get capital for, if that seems high than you are not even close to ready for outside capital.

Work on your creatives and ROI - at 2k/day you should be able to do much better than 10%.

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Id be happy to discuss backing you financially so you can scale. Feel free to DM me your contact info

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