Financing options for e-commerce businesses.
Today, the market is booming with e-commerce businesses across the internet. Over 10% of all retail sales in the U.S. are from online shopping. That number is projected to grow at a year-to-year rate of 15%. Understanding e-commerce funding sources and what types of e-commerce loans may be available to you is important for the success of your small business.
What Is E-Commerce Financing?
E-commerce companies operate on the internet and sell products to online customers. Although there may not be a brick-and-mortar storefront, there are plenty of expenses that go into running an e-commerce business, just like any other small business.
These expenses can be overwhelming at times. Taking out a loan may be a great option for your business. A loan can get the cash flow moving and your business booming.
Knowing what kind of loan to get might seem tricky, but here at LendThrive, we want to help e-commerce companies.
Types of E-Commerce Funding
There are different types of e-commerce financing options available. Read on to find out which type of funding solution might be best for you.
- Business Line of Credit. A business line of credit is best for incremental e-commerce expenses. This type of e-commerce funding is a mix between a traditional loan and a credit card.
- Inventory Financing. Inventory financing, or purchase order financing, is best for businesses experiencing unexpected growth. This type of financing is a reliable way to secure funds for inventory needs.
- SBA Loan. The Small Business Administration offers businesses access to capital through intermediary lenders. SBA loans are best for small businesses that are well-established because they take a long period of time to receive.
- Business Credit Card. A business credit card is a great option for new businesses just starting up. Financial institutions typically won’t see your brand new business as worth the risk. A business credit card soothes that burden and makes starting a business a lot easier.
As you can see, there are plenty of options to choose from when it comes to e-commerce financing. Connect with a professional lender to get started choosing the e-commerce funding source for you.
E-Commerce Financing Qualifications
Each lender will have a few different requirements for approval, but your credit score and credit history are some of the most important factors for a majority of lenders. Business credit score will be reviewed first if you already have a business credit score. If not, your personal consumer credit history will likely be reviewed.
The higher your credit score, the better the e-commerce loan you will qualify for.
Other factors that will likely be considered by lenders are how long you have been in business and the revenue earned. For many lenders, if you have not been in business for at least two years, you will not be eligible for financial assistance.
How Can I Use a Small Business E-Commerce Loan?
Depending on the specific e-commerce loan you acquire, the uses for the loan may vary slightly. Here is a list of some probable e-commerce costs that can be covered by most loans.
- Pay your bills on time
- Purchase new manufacturing equipment
- Expand your business
- Fund payroll
- Replenish inventory
- Run marketing campaigns
- Site maintenance
- Hire more employees
There are many other ways you can utilize your e-commerce loan, but hopefully this gives you an idea of some of the common uses.
How to Choose an E-Commerce Business Loan
To choose an e-commerce business loan, you need to consider your business’ needs and history. If you are just starting a small business, a business credit card might be the way to go.
On the other hand, if you have been in business for at least two years and are expanding, a Fixed Rate Business Loan is a great option. This loan choice offers quick funds to meet the needs of your ever-growing business.
Speak with a financial professional today at LendThrive to see if a fixed rate loan is right for you.
LendThrive is passionate about the success of small businesses — they are the backbone of the economy, after all. However, we understand that small business owners and entrepreneurs sometimes need funding to thrive. That’s why we make the lending process as easy and painless as possible.
When you get a loan from LendThrive, you don’t need to stress about high interest rates. We offer Fixed Rate Loans with low interest rates that you can even decrease incrementally through our Rate Reduction Rewards program.
The Rate Reduction Rewards program rewards borrowers with decreases in interest rates for making on-time monthly payments. And if your small business thrives and you want to pay off your loan early, there’s no penalty!
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Frequently Asked Questions
How much can I borrow?
LendThrive loans range from $25,000 up to $150,000 depending on the scale and needs of your business. The amount you qualify for is determined upon credit approval. Apply today to see how much you qualify for.
How does the application process work?
We make the application process simple and easy. You will be asked to provide some basic information about your business for pre-approval. Then, we will pull your credit history. Within one business day, you will receive a final decision on your loan application.
How long does it take to be approved?
At LendThrive, we pride ourselves on our speedy approval process. Most loans are approved within 24 to 48 hours.