Short-term business loans: a key pillar for your e-commerce business
For anyone who dreams about having their own business, this is the time to start one. We are living in the internet era, so opportunities are everywhere. Internet commerce is peaking, and there is a high demand for so many types of products. You can start a small online business with much smaller costs. However, you may discover your personal savings aren’t enough, and you need extra funding to get things going. While you measure your options, take a close look at short-term business loans, they may be exactly what you are looking for.
What is E-commerce?
You know what it is, and you see it every day. You are bombarded with it every time you go online. If you open your email or take a look at your Facebook page, there will be dozens of ads inviting you to get a great deal at whatever they are selling. You may find it annoying at times, but the truth is online shopping has its benefits. If you think about it, you will realize you have been taking this road more often in the last years. From books to toys or clothing, you have probably used online stores more than you thought. The advantages are clear: better prices, fast delivery and you can exchange the product if you are not happy with it.
What is e-commerce financially speaking? Well, over 10% of all retail shopping in the U.S. And the percentage is growing every year. In 2020 it’s expected to reach 12.4%. That is much more impressive than it seems at first glance.
How to Finance your E-commerce Business
An e-commerce business doesn’t have to face the costs connected to a ‘brick and mortar’ business. So, you don’t have to worry about paying a huge rent for a strategically placed store. But that’s not the end of it. You still have to worry about marketing and operating expenses, for instance. All that means money. And the budget may turn out to be greater than what you had planned. You can’t stop now, so it’s time to look for funding to keep your business on the market.
The bank may be the first thing that comes to your mind, but you need to make sure you qualify for a loan first. Banks are usually the most strict lenders, there is a lot of documentation involved and many requirements and fees. So, it may be time to find alternative sources. Here are a few options for you:
- An SBA loan – these are loans that are partially guaranteed by the Small Business Administration. They come with much lower costs but are also really hard to access due to the difficult process and the high competition.
- Grants – that’s basically free money for your business. They sound amazing but are extremely hard to access. Not to mention, you have to spend the money exactly the way you planned in your proposal.
- Crowdfunding – that means you will actually be asking for donations in exchange for future rewards. It can be successful depending on the profile of your business, but it’s a long and difficult process, and there is no guarantee you will get the funds you need.
Are Short-term Business Loans the Answer?
If the options mentioned above don’t sound right for you and banks aren’t exactly accessible either, you may want to consider a short-term business loan. These are loans you can take to cover your operating expenses, to buy materials or some equipment, things that keep your business going. The sums aren’t huge, so short-term is convenient, you don’t want to get into a long and ultimately expensive loan unless you really have to.
A short-term business loan requires no collateral, and it’s usually offered for a year or less. The interest is medium, but that’s good for an unsecured loan. Actually, the general terms make it accessible for most businesses. It is true that it has a higher threshold for qualifications than other types of loans, like bad credit business loans. But if you have a healthy business and have the revenue you need to cover the rates, it can be the help you need to take your business one step further.
If you want to find out if this is the loan you need, do a little online research. Take a look at the available options, and there are many lenders that can help you get the money you need. BizFly Funding, for example, offers up to 24 months to pay the loan off. No matter what lender you choose, make sure you carefully read all the details and that you are making an informed decision.
Are Short-term Business Loans Right for an E-commerce Business?
Getting a loan for a relatively short period and with medium interest sounds good, but is it useful for your e-commerce business? What can you actually do with that money? Quite a lot, really. You can buy the products, and set up a rich inventory, buy new equipment, hire more people, rent more workspace if necessary. You can also improve your marketing strategy and aim for better long-term revenues. This type of loan seems tailored for an e-commerce business. And if you want to find out more, just fill out an application and find out all you need to know about it. Whatever financing you decide on, keep fighting for your e-commerce business, because experts estimate it’s a segment that will grow even more in the future.
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