About Baby Care Business Financing
If you sell baby care products online, chances are you have a complex supply chain to manage and several products that must be kept in stock. Every business is unique in its budget and goals, but many face similar challenges when it comes to cash flow. With so many up front costs involved in inventory procurement, many eCommerce businesses find themselves in a cash flow crunch. They struggle to maintain sufficient inventory levels to reach their sales goals and grow their businesses. The extra capital provided by baby care business financing is a good solution for many such businesses.
Slow seasons, changes in demand, and lack of foresight can mean a decline in your revenue. Without consistent revenue, you won’t be able to stock your warehouse with the items that you need to sell. Baby care products are in high demand, so your business needs to keep up with orders if you want to compete against rival companies. Baby care business financing will allow you to make smart decisions regarding these operations, so you can finally meet your goals..
Baby Care Business Financing Opportunities
With so many financing options out there for your baby care product business, you may be overwhelmed with the choices available to you. There are a lot of factors to consider when choosing a funding partner or bank. However, it’s always a good idea to start by eliminating expenses, optimizing your budget, and prioritizing what matters most to you in a financing solution.
Decide if you are able to stick to a fixed monthly payment or if you prefer a flexible repayment schedule. Think about whether or not you’re willing to give up equity in your business. Once you have this information on hand, you’ll be able to make better decisions when it comes to funding. Here are some of the most popular types of financing available for baby care businesses.
Bank loan
A bank loan is one of the more traditional and well known kinds of financing. Banks give out lump sums of capital to businesses to cover their expenses. This can include costs related to inventory, expansion, equipment updates, or even catching up on day-to-day expenses. In order to repay the bank, you’ll have to make fixed, regular payments. This can be a challenge for some eCommerce sellers, particularly those with seasonal products or fluctuating sales. In addition, the eligibility requirements tend to be quite strict.
This type of financing usually has a lower interest rate due to the extensive criteria you must meet to qualify. Collateral isn’t always necessary, but you will likely have to undergo a credit check and prove a long business history. That makes a bank loan difficult to obtain for many businesses. The process is also long and tedious, so it’s not a quick fix for your funding struggles.
Revolving line of credit
A revolving line of credit can be helpful for many businesses. Similar to a credit card, you gain access to more funds as you repay the money you borrow. This funding solution will help you cover emergencies, last-minute orders, and day-to-day costs. However, there is a limit on the amount of capital you can access, and it’s typically on the lower side. Therefore, this type of financing won’t be enough to cover large purchases. If you’re looking to launch a new product or expand, you might need to find an alternative option.
Lines of credit usually have lenient requirements, so most businesses can obtain one. It’ll help you boost your credit score, which means you can apply for a bigger loan down the line. You have freedom of use, so you can purchase anything you need as long as it’s business-related. The lender won’t control your spending schedule, either. Keep in mind that with lenient requirements come high interest rates. Be sure to check your contract for hidden fees, too, as many lenders like to sneak those in.
Merchant cash advance
For sellers in need of quick cash, merchant cash advances are a good solution. The repayment schedule is flexible, as you can pay it off with a percentage of your future debit and credit card sales. This type of funding will help you manage your cash flow, so you can keep up with demand without worry.
The eligibility requirements for a merchant cash advance are very lenient. You don’t need to have good credit scores or a long trading history in order to gain funding. Collateral isn’t required, either, so you won’t have to risk your company’s assets. As long as you have plenty of revenue from credit and debit card transactions, you’re likely to be approved. Merchant cash advances do tend to be more expensive than other types of financing, though, so keep that in mind before choosing this option.
Inventory financing
Inventory financing is a type of funding that is used for inventory procurement. Your loan will be secured with collateral, which is the inventory itself. With lenient requirements and relatively low interest rates, businesses in various stages of maturity can qualify for inventory financing. The application process is usually quick and easy, and your funds will be delivered in days, not weeks or months. You’ll be able to stock up before the sales spike hits, forecasting without the concern of lack of funds.
The lender may perform regular inventory evaluations, as their investment is tied up in your products. You’ll need to keep accurate records to avoid complications during this process. Some lenders have a loan minimum, too, which can be too high for some companies. You also may not get approved for the full amount that you need for your inventory, so you’ll need to consider if you can afford the difference.
Invoice factoring
If you run a business that has outstanding invoices, invoice financing can help you access capital more quickly and increase cash flow. An invoice factoring company will purchase your invoices at a discount, which is their cut of the deal. They’ll give you up to 90% of the value of the invoice immediately and then collect the payment directly from your customer.
It’s a great way for you to obtain funding faster than you would waiting for the customer to pay off their invoice, which can take months depending on your payment schedule. The fee you’ll pay the factoring company may be more or less expensive than the interest you would pay on a bank loan, but it depends on your agreement. Factoring companies tend to charge extra fees, so read the contract carefully before signing on the dotted line. If the customer fails to pay the invoice, you might be responsible for the payment, so make sure you trust your customers to fulfill their end of the deal if you opt for invoice factoring.
Revenue-based financing
When regular loans aren’t an option or you struggle to stick to a strict repayment schedule, you can turn to revenue-based financing to fund your operations. If you have consistent revenue, you’ll likely be able to secure this type of funding. You’ll repay their capital with a percentage of your future profits. The payment schedule is flexible, as it depends on your sales volume, not a chosen timeline.
If you choose this option, you’ll obtain funds quickly, as the application process is usually fast and simple. You won’t need to go through credit checks and extensive business evaluations. As long as you’ve been bringing in regular revenue for some time, you’ll likely be able to qualify. You’ll retain full ownership of your business, too. Keep in mind that the cost of capital associated with revenue-based financing is often more expensive than the interest you would pay on more traditional forms of financing.
Crowdfunding
Crowdfunding is a way to finance your business through a number of smaller investments from a crowd of people. There are a number of platforms out there to help you find potential investors, but the challenge lies in convincing them to invest in you. In order to succeed in funding your business in this way, you’ll need to put together a campaign, which takes a great deal of time and effort. If investors like your business plan or idea, they’ll give you an amount of money of their choice.
One of the biggest benefits of crowdfunding is that you usually don’t have to repay the investors in the traditional sense. Instead, you will give them a reward or even a small share in your business, depending on your chosen platform and agreement. This is a great option for startups, as many funding options aren’t available to you in the early stages. However, a large percentage of crowdfunding campaigns fail to reach their goals, so be sure you have a good idea and plenty of time to plan your campaign before setting off on a crowdfunding journey.
8fig for Baby Care Business Financing
If you sell baby care products online, there’s another funding solution that may be a good fit for you. 8fig offers baby care business financing to eCommerce sellers that is designed to optimize your cash flow and grow your businesses up to 2.5x as fast. In fact, we’ll fund up to 90% of your supply chain costs. With an all-in-one eCommerce growth platform that allows you to plan, fund, and manage your business, you’ll never have to worry about going out of stock again.
Why use 8fig for baby care business financing
8fig offers eCommerce businesses that sell baby care products a growth and funding platform with the tools and resources you need to reach their sales goals. Our unique financing method gives you continuous, flexible funding to stabilize your cash flow and ensure you have capital on hand to pay your supply chain expenses. Instead of one lump sum, you get regular cash injections into your business when you need it for your supply chain. Then, you can change your plan in real time as your business demands. We know that the world of eCommerce is unpredictable, so we designed our funding plan to fit the reality of the industry. You can count on 8fig to get you through the rough patches.
How 8fig works
1. Apply
The application process is fast and easy. Answer some questions about your business and sales, and then provide basic information about your supply chain stages and expenses.
2. Connect your store and bank account
In order to provide you with an optimized Growth Plan, 8fig requires that you connect your store and bank account to the 8fig platform.
3. Get funded
With 8fig, you can get funded in just days. Since 8fig funding is continuous, you receive capital infusions into your business right when you need it.
4. Make adjustments
If something changes and you need to adjust your payments, remittance schedules, or even funding amount, you can always do so thanks to 8fig’s flexibility.
5. Grow your business
All that’s left to do is sell, sell, sell. With 8fig, businesses are able to scale 2.5x as fast.
What 8fig offers in addition to financing
8fig doesn’t just offer fast and flexible funding for eCommerce business. We also provide you with the tools that you need to grow. An 8fig Growth Plan optimizes your cash flow and allows you to track and analyze sales performance, forecast demand, check benchmarks, and even book freight. With these tools at your fingertips, you’ll be able to better plan for your future and achieve long term growth.
Another key aspect of 8fig’s strategy for growth is supply chain planning. 8fig’s supply chain mapping software allows you to visualize the flow of goods and capital across your supply chain so you can better understand where you’re in need of a cash flow boost. Then, 8fig will align your funding schedule to these personalized needs. This is a sure way to improve your cash flow and help you grow faster than ever.
Who is eligible for 8fig baby care business financing
8fig’s application process is quick and easy, and you can be approved within days, not weeks or months. Online sellers with at least 12 months of trading history, $100,000 or more in annual sales revenue, and an average of $8,000 in monthly sales for the last three months, are most likely eligible for funding.
How to apply for 8fig financing
It’s easy to apply for 8fig financing, and it only takes a few minutes. Simply answer the questions and follow the prompts and you’ll get funded in no time!