About Fashion Accessories Financing
Every business has unique needs when it comes to financing. It depends on the age of your business, the number and type of products you sell, your strategies and goals, the amount of cash flow available, and more. Despite these differences, every business requires capital in order to pay the upfront costs that come with the supply chain. Design, manufacturing, packaging, shipping, and warehouse storage costs add up. Therefore, many businesses depend on fashion accessories financing to keep up.
The fashion accessory industry is heavily reliant on trends to generate revenue, as styles are constantly shifting from one month to the next. In order to keep up with the competition, you need a steady flow of cash to stock up products and meet demand. Your business shouldn’t be struggling to maintain what it has, rather taking the next steps toward growth and expansion. If you lack working capital, however, this can be a struggle. Fashion accessories financing can boost your cash flow so you don’t have to worry about stockouts. With the right funding partner, you’ll finally have the freedom to take your business to the next level.
Fashion Accessories Financing Opportunities
As a business owner, you’re probably aware that there are a number of financing options available for your online fashion accessories brand. Some options, such as bank loans, are more difficult to acquire than others. Other funding providers may offer flexible repayment schedules. For certain types of financing you’ll have to give away equity in your business, while others will dictate how you spend the capital you receive. In order to choose the option that best suits your business, it’s a good idea to start by minimizing your costs, gaining an understanding of your cash flow and budget, and prioritizing what matters most in your funding partner. Then, you’ll be able to and pick the loan type that will best help your business grow.
Bank loan
A bank loan involves receiving a lump sum of money from a bank in order to pay for business-related expenses. This type of loan can be used to cover large purchases, such as large orders of inventory or a product expansion. It’s a good option for those who are eligible and can afford a large monthly payment.
Banks typically have lower interest rates than other types of financing because you’re considered a low risk investment after meeting their strict guidelines. Collateral isn’t usually required, but it does depend on the bank and type of business loan you apply for.
However, bank loans can be very difficult to obtain, since they have strict eligibility requirements. There is often a great deal of paperwork involved, and it can take a long time to complete the application and receive final approval. Banks usually prefer to work with businesses that have at least three years of trading history and high credit scores. They’re less experienced with eCommerce businesses, so they might not understand your unique needs and setbacks.
Revolving line of credit
A revolving line of credit is a useful type of funding for many businesses. It’s a good source of regular capital for emergencies, last-minute orders, and day-to-day costs. Similar to a credit card, you are given a spending limit, and you regain funds as you pay off what you borrow. You’ll have consistent access to cash, which means you won’t have to worry so much during slow sales seasons.
This type of financing has relatively high approval rates due to its lenient eligibility requirements. It’ll help you increase your credit score, so that you can apply for a better loan down the line. You also have full control of the spending, which means that you can choose when you pull out the cash and what you spend it on, as long as it’s related to your business.
On the other hand, since revolving lines of credit have lenient requirements, you’re often considered a high risk investment. You’ll have to pay higher interest rates to compensate for this. The borrowing limit is also on the lower side, as it’s meant to help you manage your operations, not expand them. Therefore, a revolving line of credit isn’t the right choice for many businesses looking to make large purchases. Be sure to check your contract for hidden fees, too.
Merchant cash advance
Merchant cash advances may be a good funding option for business owners in need of quick funds. A funding provider will give you a sum of capital which you will repay with a percentage of your future debit and credit card sales. This is a flexible solution that can benefit businesses that struggle to make fixed monthly payments due to sales fluctuations or seasonality.
The eligibility requirements for a merchant cash advance are lenient, simply requiring regular revenue from debit and credit card transactions. You don’t need a long trading history or high credit scores in order to gain the funds for your operations. Collateral isn’t necessary, which means your business assets are safe, too.
Due in part to the ease with which you can acquire a merchant cash advance and the risk involved for the funder, they often have a higher cost of capital than other sorts of financing. However, it might be worth it if you don’t qualify for other loans or prefer a flexible repayment schedule.
Invoice factoring
If you own a business that has outstanding invoices, you might be able to work with an invoice factoring company. The factoring company will purchase your invoices at a discount and collect the money directly from your clients when their payment is due. This is a big help for businesses that have long payment periods but can’t afford to wait months for their invoices to be filled.
With invoice factoring, you’ll obtain the funds much faster than waiting for the client to pay their invoice, which can range from 30-90 days. The factoring company’s fee, or discount, is sometimes more cost-effective than paying interest on a regular loan, too. You’ll have to determine this on your own, as each factor is unique.
Factors may sneak hidden fees into the contracts, so you’ll need to read it carefully before signing on the dotted line. If the client fails to pay the invoice, then you might have to repay the lost money to the factor, putting you at risk of a loss. This will be decided by the type of invoice financing that you choose.
Inventory financing
If you’re in need of inventory, then this loan type can provide you with the necessary funding. Your loan will be secured with the inventory itself, which will serve as your collateral. Companies at various stages of their development can benefit from this type of loan, as it has lenient requirements. However, you will need to pay a large fixed monthly repayment, so budget for this cost before accepting the loan.
Inventory financing tends to have lower interest rates due to the built-in collateral. The application process is quick and easy, and you’ll likely be able to receive funding in days, rather than weeks or months. This will help you forecast, so you can prepare for that product launch down the line.
The lender may evaluate your inventory regularly, as it’s their investment too. Keep accurate records so that you can speed up this process. You’ll need to watch for high loan minimums, as some businesses can’t afford the cost. Most of the time, you won’t receive the full amount of funding you need, so determine if the amount available to you is sufficient for your budgeting needs.
Revenue-based financing
If you’re a business with consistent revenue, you can turn to revenue-based financing to fund your online fashion accessories store. With revenue-based financing, you’ll repay an investor with a percentage of your future profits. This typically doesn’t have a time limit, as it depends on your sales volume.
The main benefits of this type of funding are quick access to funds and flexible repayments. It’s a great option for businesses that have seasonal or fluctuating sales and struggle to make fixed monthly repayments during slower sales months. You won’t have to go through credit checks or business evaluations in order to secure funding, either, but you will have to prove that you bring in regular sales revenue. With revenue-based financing, you retain 100% ownership of your business
It’s important to remember that the cost of revenue-based financing is often higher than other types of financing. Plus, the percentage they take out of your sales cuts into your monthly profits. Therefore, carefully consider whether you can afford this type of financing before signing a contract.
Equity financing
Equity financing involves selling equity in your company to investors in exchange for a large sum of capital. Venture capitalists and angel investors seek out businesses that they believe will be profitable in the future and invest in them in this way.
If you choose to use equity financing for your business, you’ll get quick access to funds. You won’t need to go through credit checks or intense business evaluations in order to secure the money, but you will need to present a comprehensive plan for your future success. There’s no obligation or schedule for repaying the funds, but you can expect to give your investors a share in your future profits. The experience and know-how the investors bring with them can help you improve your operations, as well.
Remember that when you give away equity, it weakens your ownership in your business. Your investors become shareholders and co-owners, so they have sway in company decisions. You’ll have to share the profits with them, and these are not tax deductible. This arrangement may or may not cost more than the interest on a regular business loan.
8fig for Fashion Accessories Financing
Banks and other funding solutions have strict requirements and repayment guidelines that don’t always match up to the needs of eCommerce businesses. If you sell fashion accessories online, 8fig is a great solution for your financing needs. It’s designed by eCommerce experts for eCommerce businesses, and provides you with all you need to plan, fund, and manage your growing business.
Why use 8fig for fashion accessories financing
The key to growth is consistent cash flow. This allows you to pay your perpetual supply chain expenses and ensure that you have the capital you need to stay in stock. With your cash flow concerns covered, you can concentrate on growing your operations and meeting your goals faster.
In addition to providing you with continuous capital, 8fig is a flexible funding solution. That means you can adjust the details of your plan in real-time to match the realities of your business. You won’t have to worry about falling behind with 8fig as a funding partner.
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 provides you with continuous capital aligned to your supply chain according to a tailor-made schedule. Instead of one lump-sum, you’ll get capital injections aligned with your supply chain to help keep your cash flow in the green. Then, you can adjust your plan to reflect your always changing needs.
This personalized funding solution is only part of what 8fig has to offer online fashion accessories sellers. Our all-in-one eCommerce platform gives you the ability to manage your cash flow, map out your supply chain, track sales, and more. You can take advantage of our funding and growth tools from the comfort of one easy-to-use platform, making your job that much easier.
Who is eligible for fashion accessories financing from 8fig
8fig has lenient eligibility requirements compared to banks and other funding providers. The application process is quick and easy, and you can receive your funds in days, instead of weeks or months. If approved, you can obtain up to 90% of your supply chain costs, which will relieve some of the pressure on your budget.
In order to qualify, 8fig requires that you sell a product online, have been in business for at least a year with an annual revenue of $100,000 or more, and that you’ve made an average of $8,000 in monthly revenue for the last three months.
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!