Finding financing as an e-commerce business is not always easy, especially when you didn’t have the time to establish a business history.
Finding financing as an e-commerce business is not always easy, especially when you didn’t have the time to establish a business history. A lot of traditional lenders simply don’t understand or care for the business model and will often only invest when they have a sure shot to get their money back.
This leaves many e-commerce entrepreneurs struggling to find enough money to run their operations and stay afloat. However, this doesn’t mean that it’s impossible, and there are ways that you can get finance for your business, even with little or no personal and business credit. Here are a few things that you can do to finance your e-commerce business.
Do You Still Have a Job?
If you still have a regular job outside of your business, then you might be in luck. Having steady income broadens your options and allows you to get access to things like payday loans for instance. There are tons of direct lenders and online brokers that will connect you with new payday loan lenders. The application process is usually very simple and can be completed in minutes. You’ll also get access to money very fast with this type of lender. However, it’s important that you understand the consequences if you can’t repay the loan. In addition, know the terms as well as the APR on these loans.
Consider Releasing Home Equity
This is one of the things that you could do to save your business and inject some money into it. However, you need to have enough equity in your home in the first place and are actually putting your house on the line when doing so. This is why it’s important that you only take these kinds of loans if you’re 100% sure that you’ll get the money back. It’s also important that you don’t spend this money on frivolous things, and only on expenses that will foster growth.
Friends and Family
A common issue with e-commerce business owners is that they often keep it to themselves. They don’t want to talk to their families about their business, thinking that they won’t understand it or won’t take it seriously. But you’d be surprised at how interested some in your family may be about your business if you present it to them as an actual business.
Draft a clear business plan, and act with them as you would with any other lenders. Show them what the business is actually about and give them real and tangible predictions. Also, show them your books, and any sales you’ve made so far.
It’s also important that you let them know what you’re going to be using the funds for, and make sure that it makes sense. If you want to move into a snazzy new office, don’t expect them to get too enthusiastic. But if you were intending on using the money on advertising and show them how it would help boost your business, then they might be more open. You never know, some of them might actually be interested in partnering with you.
So, if you were struggling to get financing for your business, don’t despair. Make sure that you consider all of these options, and make sure that you approach this as professionally as possible to increase your chances.