Amazon Sellers Working Capital: 6 Funding Options

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If you're eager to start a business, Amazon might be the ideal platform to consider. As revenues continue to increase, budding entrepreneurs should grab the opportunity to follow their dreams of establishing a business. Starting an online business might seem a simple task and an inexpensive way to sell products. With this approach, you don't have to look for a store location, negotiate rental arrangements, manage warehouses, and work on monthly payments for rent and utilities. 

Although there are several advantages of establishing an online business, you need to have extra cash. When you have additional funds, it can keep your stocks on hand, allow you to provide more options, and invest in marketing to attract new clients on 

Today, several funding options for your eCommerce business are readily available. It's crucial to look for one that can cater to your needs. If you want to learn more about the available funding options, checking out Sellers Funding and others can provide you with a good starting point. 

Here are some of the funding options worth checking out for your online Amazon Sellers business: 

1. Business Credit Cards 

One of the funding options worth considering is business credit cards. Today, you can choose from various options, and most involve a straightforward application process online. An advantage of business credit cards is flexibility, which allows you to leverage credit for payments to your partners and vendors. 

The drawback with business credit cards is the interest. If you fail to pay the total balance every month, it'll cost more in the long run. Additionally, any late fees and other penalties you might have will drive the cost higher. 

2. Lines Of Credit 

A line of credit works in the same way as a credit card where you can work with a flexible credit line you can utilize to buy products or withdraw as cash if necessary. Lines of credit are available in amounts starting from the thousands up to millions. If you're considering this funding option, you need to ask about the monthly or annual fees along with the interest they charge on the funds you withdraw and repayment terms. 

One of the main advantages of lines of credit is allowing you to repay what you withdraw, so you're borrowing only the amount you need. Additionally, it's readily available when you need it the most. 

3. Merchant Cash Advances 

A merchant cash advance (MCA) can provide you with immediate funding for your Amazon business even if you lack collateral. You can also apply and qualify even with little or no paperwork, making it a convenient option. Additionally, your credit score isn't only the basis for approval, so you have a good chance for this type of funding. 

Don't forget to ask about the fees you'll pay since it varies from one provider to another. The high-interest rate is one of the drawbacks of this funding option, though. Generally, the lump sum you'll borrow depends on your credit card sales, and you'll repay the loan with an extra fixed fee along with a percentage of your sales. 

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4. SellersFunding 

If you haven't heard about this tool before, it utilizes an artificial intelligence algorithm to qualify your Amazon store, assessing your performance metrics over a minimum of six months. In a short while, you'll know if you qualify and if you can obtain the amount you need, usually taking one to two days. 

The best aspect of this funding option is to apply for another loan as long as you pay back 50% of your current loan. It's best to be careful, though, due to the annual interest rates ranging from 15-24%, but there are no pre-payment penalties or hidden fees. 

5. Small Business Loans 

Applying for a small business loan from credit unions or traditional banks might be an option worth checking out. Most of these loans have lower rates but involve a lengthy and extensive approval process. An average loan application can take hours to gather and complete documents plus another three to eight weeks to determine if you qualify. A loan will require monthly repayments and don't account for sell-through and income. 

Although the loan terms seem manageable if your business is at its peak, the online market can be unpredictable. An eCommerce business like an Amazon Seller requires a certain degree of flexibility which credit unions and banks often fail to offer. 

6. Personal Loan 

If it's your initial attempt to start as an Amazon seller, you might consider a personal loan as one of the first options. With a personal loan, you're likely to obtain an amount ranging from $2,000 to $50,000, which is usually a good start. 

Before applying for one, you must have a good credit score and a decent income statement. The yearly percentage rates can range from 5-36%. It’d be best to be ready to pay for the interest and fees in monthly installments ranging from two to seven years. If you take on a person loan with high interest rates, you really need to ensure your Amazon seller business is successful.

Capital Conclusion 

Once you're ready to take the first steps in setting up an online business, you need to consider your funding source. Today, several funding options are worth checking out with their share of advantages and drawbacks. Depending on your current status, it's best to learn more about these funding options to find the right one for your Amazon business needs. Amazon selling is a competitive market right now, so get the funding you need to compete at the highest level!

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