About Skin Care Business Financing
Skin care products are very popular among consumers. Since they are a consumable product, or an item that buyers use up and need to purchase again, demand is relatively constant. It can be a very profitable space for online sellers. However, with new research, studies, and trends popping up all the time, skin care businesses need to stay on top of their product offerings and inventory. Making sure you have the cash on hand to stay in stock, pay supply chain expenses and marketing costs, and keep up with the latest fads is not always easy. That’s why many sellers turn to skin care business financing.
Securing external funding provides you with breathing room when such changes inevitably do occur. Many of the costs involved in producing skin care products, stocking up on inventory, and selling your products are due before you see revenue from sales. And even when you do bring in revenue, it is often not enough to cover your procurement costs, grow your business, or launch a new product.
Skin care business financing offers you the opportunity to keep up with competitors and satisfy your customers. You’ll be prepared when unexpected expenses pop up such as a spike in demand or a delayed shipment, and you’ll have the funds you need when you’re ready to expand.0
Skin Care Business Financing Opportunities
No matter what you’re looking for in a financing partner, obtaining funds can be an overwhelming process. There are many banks, lenders, and investors to choose from, each with different eligibility requirements. The various types of funding also come with different repayment methods, costs, benefits, and downsides. It takes some research and diligence on your end when it comes to choosing the right type of financing for your business.
Bank loan
When you take out a loan from a bank, you receive a lump sum of capital that you must repay in fixed monthly payments. Every bank has different policies regarding eligibility and repayment guidelines, but bank loans are often difficult to obtain. Banks prefer to lend to businesses that have been active for at least three years and have great credit history. They will likely check your revenue as well, to make sure that you’re profitable enough to pay back the loan with interest. Some banks will ask for collateral, such as property, inventory, equipment, and even invoices. On the plus side, this often leads to lower interest rates.
Applying for bank loans can dock points off your credit score if they perform credit checks, so don’t apply to every bank and lender you come across. Take the time to consider their eligibility requirements, pros, and cons first.
Pros
- May have higher loan limits than other funding sources
- Low interest rates
- Interest rates are tax deductible
Cons
- Strict eligibility requirements and low approval rates
- Lengthy application process
- May require collateral, credit check, and lengthy trading history
Business line of credit
If you’re looking for funding that’s similar to a credit card, a business line of credit might be a good fit. You gain access to more funds as you pay off the money you use. This can help you prepare for the slow season and have emergency funds for spikes in demand. Day-to-day operations aren’t easy to maintain without consistent funds, either. The loan limit is based on your business history, and is often lower than other funding solutions. However it’s easier to obtain than a traditional bank loan.
If you’re capable of paying a higher interest rate and meeting fixed monthly payments, then this may be a good option to take advantage of. What’s more, you only pay interest on the funds you actually use, which benefits many businesses. You also have the freedom to spend the money on any business expense, unlike with other loans that dictate when and where you spend the money. If you’re looking for a bigger loan down the line, this type of loan will help you build business credit, too.
Pros
- Complete spending control
- Helps build business credit
- Quick and easy access to funds
- Only pay interest on funds you take out
Cons
- Higher interest compared to other loans
- Low credit limit
- Fees can sneak up on you
Crowdfunding
If you’re a startup, then crowdfunding may be your ticket to success. Crowdfunding involves collecting numerous investments from multiple sources in order to fund a business or product. There’s no credit checks or business evaluations involved, as they only care about your pitch. You’ll need to convince them that your idea is worthwhile if you want the cash, so building a campaign can take a great deal of time and effort. You won’t have to repay the funds in the traditional sense, instead giving investors a reward or share in your business.
The challenge with crowdfunding is convincing people to invest in you and your business. You’re most likely to succeed with an innovative and eye-catching idea. However, it’s important to keep in mind that many crowdfunding campaigns fail to reach their goals.
Pros
- Quick access to funds
- Complete creative control
- Great alternative for those who don’t qualify with banks and lenders
Cons
- High risk of failure
- Idea theft may be possible
- A successful campaign takes time, creativity, and effort
Equity financing
Equity financing is when investors provide you with capital in exchange for minority shares in your company. The most common type of equity investors are angel investors and venture capitalists. These investors seek out promising startups and businesses, giving out significant sums of capital in the hopes of making money in the form of future profit shares. Be sure to pick the business. Equity investors also bring with them expertise, and can offer you advice and guidance in your future endeavors.
This option is great for those who need help starting up their company or expanding their operations. However, if giving up ownership in your company doesn’t sound good to you, stay away from equity financing. a
Pros
- No repayment needed
- Quick access to large sums of capital
- Investors bring experience and advice
Cons
- Ownership is diluted with every sold share
- Profits must be shared among all shareholders
- May be more costly than interest on a regular loan
Equipment financing
Equipment financing is ideal for businesses that need cash to cover equipment purchases and maintenance. It’s easier to obtain than other types of loans, as the equipment itself is used as collateral. Since there’s collateral involved, it usually leads to lower interest rates. This will help keep your fixed monthly payment more manageable.
Equipment is costly and can eat into your monthly budget. However, you can’t afford to wait to purchase or upgrade your equipment when you need it to perform a job. If you need a loan strictly to cover equipment, this type of financing can help.
Pros
- Equipment is used as collateral
- Lower interest rates
- Quick and easy process
Cons
- Only covers equipment expenses
- Large monthly payments
- You might lose your equipment if you fail to make payments
Merchant cash advance
Are you in need of quick cash but don’t have the credit score to obtain a traditional loan? A merchant cash advance should be on your list of options. A lack of business history isn’t always a deal breaker when applying for this loan. Many funders only require three months of trading history. Since your repayments are based on your revenue, however, this type of funding is only available to businesses with regular credit and debit card sales
If you opt for a merchant cash advance, you’ll repay it with a percentage of your future debit and credit card sales. This is particularly helpful for businesses with seasonal sales and fluctuations in demand, since you won’t have to worry about a fixed repayment. Due to the lenient requirements, you’ll have to pay relatively high fees due to your risk status. It also won’t help you build credit history.
Pros
- Quick cash
- Lenient requirements
- No collateral required, equity-free
- Repayments are percentage of credit and debit card sales
Cons
- High cost of capital compared to other types of funding
- Does not build credit history
- Lender can take money from your account, regardless of your sales volume
Inventory financing
Inventory financing is funding that is used specifically for your inventory. This type of loan is usually easy to obtain, as the inventory itself is collateral. This will give you the chance to launch new product lines and keep up with demand. Credit history isn’t always a factor with this type of loan, either, so you’ll have a good chance of getting one, so long as you have the funds to cover the fixed payments.
New businesses and those that need help keeping up with inventory costs can benefit from this type of loan. You may not always receive the full amount you need, though. Even so, inventory financing can give you the ability to grow at your own pace, without having to worry about strict eligibility requirements or nosy investors.
Pros
- Quick and easy process
- Inventory is used as collateral
- Credit checks aren’t always necessary and it’s equity-free
Cons
- Requires regular evaluations from lender
- The full amount might not be obtained
- Can only be used on inventory
8fig for Skin Care Business Financing
If you’re searching for skin care business financing for your eCommerce store, 8fig can help. 8fig provides customers with the ability to plan, fund, and manage their operations from supply chain mapping to cash flow optimization. This is all available on one platform designed specifically to help eCommerce businesses reach their full selling potential.
Why use 8fig for skin care business financing
Steady cash flow is vital to those selling skin care products online, as products are constantly coming and going due to the fluctuating trends. Large lump sums aren’t an ideal strategy for businesses with cyclical supply chain expenses and fluctuating sales. Fixed monthly payments can wreak havoc on your budget. 8fig has a unique funding model which provides you with continuous capital so you can make your payments and optimize your cash flow. In addition, 8fig funding is flexible, so you can control your payment and remittance schedule and even change the details of the plan as you go.
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
Funding is only a part of what 8fig has to offer skin care businesses. 8fig’s financing comes hand-in-hand with helpful growth tools that will allow you to optimize cash flow, plan your supply chain, predict trends, and analyze sales. We’re your business partner, not just your lender. 8fig doesn’t take equity in your business, either.
Thanks to flexible and continuous funding from 8fig, hundreds of eCommerce sellers are able to stay in stock and grow their businesses. 8fig is a long-term growth solution, providing you with the tools and resources you need to improve your business and reach your goals.
Who is eligible for 8fig skin care business financing
8fig doesn’t require a credit check, collateral, or take any equity in your business. Instead, we look at your business’s sales history to determine your eligibility.
If you sell a product online, have been in business for at least a year, have an annual sales revenue of over $100,000, and have made an average of $8,000 per month for the last three months, 8fig will likely fund your growth. You’ll be eligible for funding to cover up to 90% of your supply chain costs, improving your cash flow and allowing you to grow at the speed you choose.
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!