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How to get funding for your existing online business

By Edited May 3, 2016 0 0

Do you need online funding for your online store?

The desire to grow and expand an online store business is a normal thought for those who own their own online stores. With an online store business the biggest expense for an owner is the cost of purchasing new inventory to sell. Sometimes business can be tough and there will not be enough revenue coming in to purchase the amount of inventory that is needed. Many times the wholesale suppliers will only give the best deals if you purchase enough quantity of the merchandise, and of course you will want to get the merchandise for as cheap as possible. 

Where than can someone get funding for their online store?

You can go to a bank and apply for a business loan. There will be a lot of red tape though and many people will not qualify. Banks are always a little leery on giving loans to online store owners as they may not see it as what they call a real business.

A peer-to-peer lending site is an alternative to a bank that has worked for many people. If you have decent credit, you might find that a P2P lending site can give you the loan you need to grow your business. These type of companies will loan you anywhere from $1000.00 to $25,000.00. The interest rate that you pay on your loan will be much lower with a peer-to-peer lending company than what a bank would offer you. If you get your loan, I would say that you will receive your money in two to three weeks from your initial application. I have personally used peer-to-peer loan sites in the past and think that they are great to use when needed. In my experience, Prosper is the best peer-to-peer lending site that exist.

Another choice that someone has to fund their online store business is to use a company called Kabbage. This company actually caters to online stores and will give you the jump-start that is needed to expand your business. If you are an online seller on either Amazon, eBay, Yahoo, Shopify, or Etsy, you are definitely going to want to check out Kabbage to see how much funding that they can loan you.

How much money will Kabbage loan me?

The amount that Kabbage will loan you is dependent on many things such as how long you have been a customer with them, as well as your online transaction volume. Your online transaction volume of course is how much money your business is bringing in and you cannot just make up some number and give it to them. You will have to link your store to Kabbage so that they can see what your normal business revenue is. If you sell on Amazon, eBay, and Yahoo, you will enter the information for all three of your stores and the revenue from all three will be calculated together.

One of the great things that I love about Kabbage is that it is in a sense a short-term loan. What I mean by this is that they do not give you a three or five year loan. Your loan is due in six months! If you get a $6,000.00 loan your payments will be about $1000.00 per month. Some may not like this but it is my personal preference, the sooner I pay it off the better.

As you make your payments on time more money will become available to you. For instance, if you had made three payments so far on that $6,000.00 loan we talked about a second ago and owe about $3000.00, you may have $5,000.00 more available. If you get another loan for that $5000.00 it will be added to the $3000.00 that you owe and your balance would then become $8000.00. Your payment date remains the same but of course your payment will be more using this scenario.

Who can qualify for a Kabbage cash advance loan?

Currently Kabbage is available to only United States residence. On their website they say that they will eventually expand to other countries but as of now they are just concentrating on the U.S.

Your online store sales do need to meet the minimum monthly average of $1000.00 per month. If it more than that the better for you as you will qualify for more funding.

You may want to note also that even though Kabbage does check your credit score, their decision in loaning you money is not solely based on what your credit score is;  which is great for those who do not have good credit. This is what makes Kabbage different from other type of loan institutions that make their decision solely on what your credit score is. Kabbage also bases their decision on how long you have been in business, your online store sales, your seller rating, and your feedback measurements.

Other ways beside your store revenue that will increase your loan amount

The amount that your earn through your online sales every month will of course be a major factor used to decide how much funding you will receive. There are other ways though that you can increase the amount that Kabbage will loan you.

If you are active with social networks, this will let Kabbage increase your loan amount. If you have a Facebook or Twitter, you can link those accounts and will qualify for additional funds.

If you have a UPS account, you can also link that account and you can get  funding up to 20% more.

If you have a Quickbooks account it can raise your Kabbage funding by 10%.

One thing I have noticed about Kabbage is that the more they know about you the better. They want to make sure that you are going to pay them back, and they want to deal with those that they know are going to pay them back.

If I am approved for a loan - How long will it take to get my funds?

It is unheard of to get your loan as quick as Kabbage can get your money to you. You can actually have the money in just a few minutes after you apply. This is no joke! I first discovered Kabbage by accident by just browsing the Internet one night. I read and learned about the site and what they do so thought I would give it a try. It took me about 10 minutes to fill out the application and link my accounts to them. They then let me know how much money was available to me. I then submitted my loan request and it was accepted right away with a message stating that the money will be in my PayPal account in a few minutes. It took me about one minute to log into my PayPal account and the money was there!

How do I pay my loan back?

Most borrowers prefer Kabbage to automatically debit their payment each month from their PayPal account. If for some reason someone wanted to make different arrangements with Kabbage, they can send in checks.

Kabbage will send an email about a week before the payment is due just in case you do not have enough money in your PayPal account to cover the payment. This allows enough time for you to transfer funds from your bank account into your PayPal account

Conclusion

I wanted to share what I now about Kabbage with others. Like I said earlier, I had never heard of it before until I accidentally found it on accident one night. I can not say anything bad about my experience with them. When I need funding for my business it is nice knowing that the cash is there when I need it.

If you are interested in getting your business funded with Kabbage, you will need to sign up, apply, then receive your funds. All this within minutes!

I must advise those that have just recently started an online store or are thinking about starting an online store, that though you will not qualify because of the $1000.00 average sales per month rule; you will want to bookmark Kabbage though and save it for future reference.

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