Selling online is a no-brainer for small business owners. The ability to maximize growth opportunities will assist you in capitalizing on the current online retail craze, but you need cash to build your expansion plans. Having the right funding is key. You’ll need a loan for:

  • Expanding product lines 
  • Buying more inventory 
  • Hiring employees 
  • Redesigning your website 
  • Augmenting your marketing budget 
  • Covering day-to-day expenses 
  • Buying a physical location  

Here are some options when it comes to financing your business. There are basically three common funding methods.

Term Loans

This type of loan is best when you want to cover short-term cash flow needs, along with long-term investment needs:

  • Loan amount: between $10,000 and $one million 
  • Loan term: One to 10 years 
  • Interest rate: six percent up to 30 percent  

You can get this type of loan in under two days. You’ll like it for its flexibility, higher than normal funding limits, and reasonable interest rates.

Accounts Receivable Financing

If you are an eCommerce business with outstanding invoices and require funding for short-term needs, this is the type of funding for you.

  • Loan amount: Up to 90 percent of outstanding invoices 
  • Loan term: one month to 90 days 
  • Factor fee: between one percent and five percent processing fee, plus a percentage of outstanding invoices 
  • Funding speed: one day to two weeks  

Keep in mind, this type of financing will use the value of your outstanding invoices as collateral. You won’t pay an annual percentage rate (APR), but you will pay a processing fee, on top of a percentage of your outstanding invoices to the lender.

Merchant Cash Advance

If you are an eCommerce business with stable credit and debit sales but don’t necessarily qualify for a term loan, this may be the best type of funding for you.

  • Loan amount – between $5,000 and $500,000 
  • Loan term – One week to 36 months 
  • Factor rate – 1.1 to 1.5 
  • Funding speed – As little as one day  

You are basically borrowing against your future debit and credit receipts, then providing repayment of the advance from those sales. You don’t need perfect credit but you do need to prove you’re an established business in order to qualify.

Get professional advice on which funding source is best for you, and always do your homework!