If you thought e-commerce is just an alternative to buying from a store, you’re wrong. Shopify, an e-commerce mega platform, reports a huge leap in worldwide e-commerce sales from $1.3 trillion in the year 2014 to $4.8 trillion in 2021. In such a scenario, funding an e-commerce business is a serious business.
With the evolution of the e-commerce business, there is also an increase in the options for funding. The small business loans required for e-commerce businesses are usually similar to those that other businesses take for expanding their business. While there are organizations that provide venture capital, you can get e-commerce grants as well.
So, if you’re looking forward to taking out an e-commerce business loan, here are the few options that you may resort to.
Get E-Commerce Financing From Loans
As long as eCommerce funding is concerned, the first place to look at is conventional business loans. Although experts recommend you not to take out bank loans as they’re tough to obtain for most entrepreneurs. Instead of borrowing from a bank, you can check out the fast rates of an online lender along with the flexibility that the online lenders offer for repayment of loans. The business line of credit, inventory financing, invoice financing, business credit card, and SBA loans are a few such lending options.
Opt For E-Commerce Grants
This is best for a company that is not in a hurry and that doesn’t have too much of cash flow. How about watching out for any e-commerce grant that your business will qualify for? There’s no doubt when we say that grants can be great options for business owners who can get them. Grants are free money.
Nevertheless, it takes a lot of time to find out the right grant for your e-commerce business and the application process is also a lengthy one. In case you think an e-commerce grant is the best type of financing option for your e-commerce business, you should do some research in your industry, in your locality, or even in your alma mater.
Get A Clear Idea Of Your Credit Rating
By now, you must be aware of the fact that credit can either break or make your loan application. A higher credit score will mean a low-interest loan and a poor score will translate to sky-high rates. In case you didn’t check your business credit score for a long time, you should check it before you opt for a loan. Often, there are inaccuracies and errors that may hurt your score. You should spot those errors and point them out to the credit reporting agencies so that they are negated.
Get Help From E-Commerce Venture Capital
If you’re someone who is looking for e-commerce business funding, through which you can get several thousands of dollars, it is better to opt for e-commerce venture capital. There are, in fact, several businesses that have raised millions of dollars from venture capital from top-notch investors like The Honest Company, Everlane, Winc, Zola, or Brooklinen. However, if you thought you would just snap your fingers and get venture capital, you’re wrong. You need a lot of hard work and dedication to grab this kind of funding.
Apply For The E-Commerce Loan
Once you’re done with comparing and contrasting your options, the next step is to apply for the funding option. Finish the application and upload all the paperwork online within few minutes. Based on the lending company, it can take a few hours to a few months to get the loan in your bank account. Once the company approves the loan, ensure you review the agreement to know what exactly you’re signing up for.
Therefore, now that you’re aware of the funding options for your e-commerce business, choose the one that best fits the needs and requirements of your business. Have a well-thought-out plan to use the funds properly from your account.
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