As a business owner, you’re likely familiar with the concept of financing. But how do you know if you actually need it? And which product is right for you? To help take the guesswork out of all things financing, we’ve put together a few common signs that you’re ready for it, plus which option will help your business the most.
You Might Need Financing When…
First and foremost, you should consider outside financing as an investment in your business’ growth — not a solution for mounting bills or to avoid bankruptcy, for example. If you’re business is in a dire financial situation, you should reassess the state of your business and/or consult a financial advisor. Getting outside financing will not help you out of a financial hole. Instead, it should be used as a tool to fuel your business’ growth and really help you take things to the next level. So with that, here are four common signs you might be ready for outside financing:
- You have a proven product. You earn consistent sales and may even own the Buy Box, you just need help bridging cash flow gaps between payouts so you can replenish (and turn) more inventory more quickly.
- You’re *this* close to scalability. Because of your proven product, you’re practically scalable, you just sometimes have to slow your own sales as you wait for a resupply order. With financing, you can increase efficiencies and continue to sell — and sell faster — because you’ll be able to more quickly replenish stock.
- Seasonality & customer demand. Regardless of the time of year, you need to be able to meet demand. But some months are busier than others. Financing can help you bulk up on inventory when you need to so you can keep up with growing demand and never lose momentum.
- Opportunity cost outweighs financial cost. Finally, if the cost of not getting financing — lost Buy Box and sales, stockouts and closed accounts, no actual income, etc. — is worse than the actual borrowing cost, and when you know getting financing can help you make more money, then financing sounds like a smart option.
The Right eCommerce Financing
If any of these resonated with you, it’s time to talk about actual financing options — of which there are several: credit cards, bank loans, online loans, and more. It’s important to note, however, that not all financing is created equal, especially when it comes to business vs. personal options. In other words, a business loan is NOT the same as a personal loan and if you are serious about getting financing, you should only consider business options. After all, business financing is designed for you to invest in growth and take your business to new heights — not, as we mentioned before, to improve a dire financial situation. So with that, we’re focusing this section on financing options designed specifically for marketplace sellers, like Payability.
Payability provides a variety of solutions for ecommerce sellers to get paid daily and in real time, bridge cash flow gaps, and grow their businesses. In fact, sellers that use Payability grow 2.5x faster than their competitors. So how does this rapid growth happen?
With Payability’s Instant Advance, Payability buys a certain amount of your future receivables at a discount, giving you a large lump sum of cash up front that you can use to invest in bulk inventory or other growth areas. You could also use it to prepay your suppliers (and negotiate better supplier deals in the process — further increasing your margins!). To learn more about Instant Advance in action, read Gina Goldring’s story. She grew her Amazon business by 50% one month after her first Instant Advance.
Payability also offers daily cash flow options with Instant Access and their Seller Card. These solutions pay you your marketplace income in real time so you no longer have to wait two weeks or more to get paid on your sales. Regardless of the Payability solution you use, you won’t need a credit check — instead, Payability looks at your overall account health and sales performance. In addition to rewarding you for being a good seller, Payability’s credit check-free financing options make it possible for you get the cash you need in 48 hours or less.
Learn more about Payability and the 2,500+ other marketplace sellers they’ve helped at http://go.payability.com/fbamaster. You’ll get a $250 sign on bonus and discounted Instant Access fees when you sign up through FBA Master.