Finance is important for any business. eCommerce sellers in Amazon or eBay always have a hard time balancing cash flow. This is because Amazon sellers need to wait at least a week to receive the payment made by buyers. The policy is designed in that way to eliminate scam sellers, also to protect customers and build trust. Hence Amazon has a sea of customers. In these conditions, the easy way is to look for Amazon Sellers Loan. Financing is necessary when if you are planning for an expansion, hire new staff or increase inventory size.
Let’s look at the options for loan
The simplest way is to visit the nearest local bank and approach for a loan. However, this is not easy. The loan approval rate of traditional banks is too low. Local banks are not fast, lots of paper works. So for new eCommerce sellers, this is not an easy option unless they have something solid asset to mortgage or good credit score. Also, the chance of receiving a loan will even reduce for eCommerce sellers. In the UK, one can apply for startups loan. The StartupLoan programme is backed by the government.
Alternative Loan options
The alternative lenders are perfect for eCommerce sellers. The approval is very fast and less paperwork. However, these lenders might charge high interest. Bitbond, Paypal WC, ezbob are the few lenders who process loan within 24 hours. Generally, these lenders charge 1% to 7% interest per month. Since eCommerce sellers require short term loans, the lenders came up with charging interest on a monthly basis. The loan amount varies from $1000 to $50,000 and the maximum repays time about six months.
The alternative lenders check your amazon seller account, sales data, Paypal cash flow, eBay account, Shopify, store website, LinkedIn, Facebook, and other online databases to access the health of the business. Generally, the loans are available for business based in the UK, US, Australia and a few European countries.
Advantages of Loan for eCommerce Business
Sellers can borrow sufficient funds to increase inventory size. In holiday seasons, one can utilise the fund to buy more products and so that increased sale. Borrowing fund help in balancing the demand. Sometimes, Amazon or eBay take a long time to credit your sales money. Rather than waiting for funds to receive, one can borrow a loan and buy more products.
The business might hit bad sometime, one can utilise the amount to manage in difficult times. If you have private label products or own brand, then use the funds for marketing, offer discounts and promotions. So that business will boost and the sales will pick-up.
Use funds to increase the infrastructure like staff, office and warehouse. Business expansion demand finds, and eCommerce sellers cannot take a chunk of revenue and put on infrastructure. Therefore, external financing will help to deal with infrastructure.
What if I cannot make a repayment?
If you cannot repay, one has file bankruptcy and all your asset and debts will be erased. This is what happens with the local banks. On the other hand, with alternative lenders, it depends on the lenders. One can renegotiate the repayment plan. Also, business scale and type of ownership play an important role. Generally, alternative lenders don’t have any security. Hence they might increase the interest rates or as you to pay fine. Finally, if you are unable to pay, then they will hand over the details to collection agencies. These agencies may seize the inventory or other infrastructure, website, etc.
Finally, managing finance is an important part of any business. One must have sufficient fund to keep running the show. Amazon sellers Loan or any eCommerce business loans is a boon for many sellers. Your Amazon seller account might hold some funds because of some issues, and one has to keep selling in Amazon to balance the business. The alternative loan will help a lot for small retail sellers and help them to get back on track.