Looking for financing for multi-channel eBay sellers? Most eBay sellers and other entrepreneurs will at some point need to look for cash to keep their business going. This is a fact. Especially nowadays. We focus on financing for multi-channel eBay sellers.
Because we live in a time of such economic uncertainty. While the middle class struggles to pay bills and keep its head above water, the rich keep getting richer through loopholes and tax breaks.
And the drama we see playing out daily (that is, the comedy/tragedy otherwise known as the 2016 presidential election) is not speaking to our specific financial challenges as small business owners, beyond lip service.
Small businesses can be a boost to the economy. But we are instead levied with excessive taxes, fees, and other administrative costs. Not to mention the day-to-day expenses of running a business. It can get expensive.
It’s no wonder we often find ourselves in search of business financing.
Related Article: Small Business Loans for Working Capital
Even if your eBay business is doing well, you could still need additional capital. Why? Maybe you’re thinking of expanding your product line or considering an expensive business-related purchase. Or something else. Paying for a store design, etc. Financing for multi-channel eBay sellers could be needed.
No matter your reason, there are five important points to understand that will help you better navigate the industry.
1) What is a marketplace lender?
It is a term often used interchangeably with “peer-to-peer” lending to describe the industry. “This is a misnomer”, according to David Klein, CEO and Co-founder of CommonBond, “especially as institutional investors have been outnumbering individual investors on platforms such as Lending Club, Prosper, and many others.”
In his blog, Klein defines a marketplace lender as a non-banking financial institution that heavily leverages technology for simplicity and speed of process and serves a two-sided market of consumers and investors/lenders.
2) How does equity financing work?
In order to raise capital you might decide to sell shares of your business to investors. The upside is you don’t have to pay anything back (other than to maintain business profitability so that investors’ shares increase in value).
But the downside is that the more common stock you issue to the public, the more your percentage of ownership in your company decreases.
So you need to ask yourself if you’re willing to give up partial ownership and control of your business in order to obtain capital.
3) What is debt financing?
This is the most common type of financing. It is when you borrow money from a lender with strict loan terms that dictate an interest rate and payback schedule. And if a payment is late, there are consequences such as late fees and credit bureau reporting that can affect your credit score.
4) What is a PayPal Working Capital loan?
A PayPal Working Capital loan is similar to other debt instruments in that it is paid back within a specified period of time. But instead of a credit check and lengthy application, a potential borrower simply needs to be a PayPal seller. Perfect for financing for multi-channel eBay sellers.
Loan amounts are based on your PayPal sales and are repaid using a share of your daily sales. There is no interest, per se, but there is a fixed fee. Read more here:
5) Can the SBA help me?
The short answer is yes.
The Small Business Administration offers several types of loan programs for small businesses, but they do not lend money directly. Rather, they insure loans through participating lenders and financial institutions who then can offer you a loan at lower risk, which means better terms for you.
But qualifying is very cumbersome. Plus, SBA-insured loans must be secured through property or some other form of acceptable collateral. Here is more info: https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs
With the upcoming election adding even more fuel to the fire of economic uncertainty, we can be sure of one thing. The financing industry will be indirectly impacted which, in turn, will directly affect consumer and business lending, online and off.
Only time will tell how.