people who start experimenting with buying and selling on eBay will charge all the items they plan on selling to their credit card. Why? because it’s the easiest credit source to use. Most everyone has at least one credit card to their name and it feels very safe to purchase inventory for your eBay business knowing you can just pay that minimum payment each month. In reality though this is probably one of the worst ways fund your business. Here are some the best ways:
Use your savings account. Sure it sounds risky to take money from your savings and put towards a business and in way it is but it isn’t any more risk than using a credit card. Using your savings will give you the added benefit of not having any interest charges and having more time to make the business a success without worrying about payment deadlines, late charges and the like.
Use a home equity line of credit. The second best way is to use a home equity line of credit. Since your house is used as collateral the interest will be much lower than you could likely receive else where. Like a credit card funds can be drawn from the line of credit at any time the borrower sees fit. The interest is added to the borrower’s mortgage payment. Depending on the lender after between 5-25 years the entire principal amount will become due. The payment may also be paid off before it becomes due without penalty.
A business loan from a bank. A business loan from a local bank or credit union could also be used. The main drawback here would be that most banks don’t want to deal with start up companies without any real track record. Many banks also require a detailed business plan which can be quite a challenge for a one man home based business.
These are all great options but you may be asking “What if I have no savings, no home equity and don’t qualify for bank loan? What can I do now?”. That’s a very good question, and fortunately there is an answer. There is a new option for raising funds for your eBay or eCommerce business.
A New Way To Fund eBay Business
Seeing the need for new and innovative ways of funding eBay and eCommerce businesses, kabbage.com has stepped up to fill the void. Instead of relying solely on credit scores and past income data they also incorporate your proven track record on sites like eBay, Amazon or your own web-store. Unlike traditional loans it only takes 7 minutes to find out if your approved and for how much. It’s easy to apply and risk free, applying doesn’t obligate you to take out a loan.