We all know the struggle is real for e-commerce sellers.

I need to sell more product, I need to make more money, but I need more money to buy more stock.

What came first the chicken (money) or the egg (sales)?

You need sales to get money. You need product to get sales. You need money to get product.

Ok, let’s break this loop.

Did you know more and more investors are looking to finance inventory for your e-commerce business? That’s right, investors have cold, hard cash that they are willing to put into your inventory in exchange for a decent interest rate.

You don’t need to give up shares in your budding e-commerce empire. You don’t need to beg a banker who doesn’t know how to do more than check their Facebook wall to finance your retail expansion.

There are savvy investors out there who know e-commerce is booming and they are willing to give you a fair interest rate to get some exposure to the market.

Sounds interesting?

Let’s talk about how this will work for you. But first we have to know what this Inventory Financing is all about.

For any businesses, fluctuations in cash flow are most often inevitable. Perhaps you want to make more sales by acquiring additional inventory, or maybe you want to maintain your inventory but do not have enough funds. Inventory financing is the solution.

Basically, inventory financing is a short-term loan granted by certain companies to an entrepreneur / business owner, to enable them to procure merchandise for sale. These products or merchandise will serve as the loan collateral, in case the borrower fails to pay off the loan on time. Inventory financing typically helps a business owner to acquire working capital to leverage inventory, without having to put up personal property as collateral.

What we are very excited to share is that there are already trade finance platforms supporting e-commerce entrepreneurs, more particularly, the SMEs. They are offering different financing solutions to help you in keeping your inventory at a very comfortable level. We can connect you to one that we know offers these three funding solutions:

This is a funding solution that will best fit you if you only get to experience a rather short funding gap. You don’t have to offer all of your receivables or potential sales proceeds to secure the cash you need to purchase inventory.

Eligibility to the program:
For you to be eligible for financing, you must have:

• a Hong Kong registered company
• a minimum turnover of HKD $2,000,000 p.a.
• open account trading with other businesses
• been operating for over 12 months

This will fall as a short-term business loan that will be drawn against your receivables on e-commerce platforms when you import to China. Platforms include TMall, JD Worldwide, Suning.com. Kaola, etc.

Eligibility to the program:
For you to be eligible for financing, you must have:

• a Hong Kong registered company
• a minimum turnover of HKD $2,000,000 p.a
• 6 months worth of trading history
• to provide your e-commerce platform account details for credit checking

Benefits to the sellers for using Invoice Finance or Import E-Commerce Finance

• Accessible even to those who have no access to other bank services
• You control which invoices would be offered for funding.
• Funds are received within 24 hours from uploading of the selected invoices
• Financing can be up to 80% of the invoice amount
• Data privacy and Information security

Steps in getting started in Invoice Finance or Import E-Commerce Finance

1. Register Online. You would only need to submit your business profile, financial information, bank statements for the last 6 months and your track record. Registration would be faster if you use online accounting software like Xero and Quickbooks in signing up.
2. Add a customer to your account
3. Upload the selected invoices.
4. Receive the funds within 24 hours

This is an unsecured loan to support your e-commerce business in financing the cost to export your products from China. The identified platforms are Amazon, Lazada, Shoppee, Ebay, Wish, etc.

Benefits to the sellers

• Accessible even to those who are not qualified for bank loans
• The loan size can be bigger depending on your sales revenue and can even go up to $5,000,000 (USD).
• Volume and payment cycle are flexible
• Interest rate is competitive at 0.8% net monthly.

Eligibility to the program:
For you to be eligible for Export E-commerce Financing, you must have:

• a Hong Kong registered company
• 6 months worth of trading history
• to agree to an API Integration with

Steps to get started in Export E-commerce Finance

1. Register Online. You would only need to submit your business profile, financial information, bank statements for the last 6 months and enable API integration with your account under this platform. Registration would be faster if you use online accounting software like Xero and Quickbooks in signing up.
2. Set up your account and other loan details – loan size, interest rate and the loan cycle. It will be done alongside an account specialist assigned to you to determine the loan package that will best suit your needs.
3. Receive funds within 2 days.

APPLY NOW AND FILL OUT THE FORM

If the above financing solutions are exactly what you are looking for to support you in your inventory needs, then, click on the button at the bottom of this article and fill out the form.

1. Banks: This is probably the most common option to get financed, but this option has the slowest processing time. The bank will typically look into your business records, financial statements and credit score. Essentially, a bank will take your products as collateral, but can also place a blanket lien on your business assets, allowing them to seize any of your business assets if you are unable to repay the loan. Some banks can be loan sharks, so you should be careful in choosing which bank could financially help you without having to place a blanket lien on your business assets.
2. Vendor Financing: Vendor financing is a type of lending where the creditor is the supplier itself. For example, you want to purchase a product worth $1,000,000 from a certain supplier, but your cash on hand is just $500,000.Your supplier may lend you the other $500,000 at a certain interest rate, and the products will serve as collateral. Usually, vendor financing requires a solid relationship between the creditor and debtor – this type of financing can be instant and negotiable as long as you have a good relationship with your vendor.
3. Online Lenders: There are many online lenders, but here are my top 5:

• • Kabbage: This offers a line of credit of up to $250k for a 6-, 12-, or 18-month term. Fee rates can range from 1.5% to 10% using different business performance factors as basis. Applications can take only 10 minutes, and approval can be instant if Kabbage is able to automatically obtain your business data and verify your bank account.

• • OnDeck: This can grant term loans of up to $500k at a 9.99% annual interest rate and a line of credit for up to $100k at 13.99% annual interest rate. The application takes just a few minutes online or by calling them directly. OnDeck evaluates your business and typically provides a decision within minutes. If approved, you can receive the money in as little as 24 hours.

• • DealStruck: This offers up to $500k with terms of up to 48 months at reasonable interest rates starting at 9.99%. You can be considered as long as your business is a year old or more, your credit score is above 600 and you have $150k in annual revenue.

• • Behalf: This offers business financing with a monthly fee that starts at just 1%, but fees are typically based on the applicant’s creditworthiness.

• • SmartBiz Loans: This offers up to $350k at an interest rate that starts at 8.25% for a term of 10 years. The application takes only a few minutes; simply provide business data online and they will automatically tell you if you pre-qualify for working capital.

To apply for inventory financing, your business must be an already-existing, product-based company and not a startup. To get your inventory financing approved, you must have good inventory management — your products must be in good condition, and you must have a good sales record or history.

To apply for inventory financing, you must meet certain requirements, such as below:

There are many companies that offer inventory financing, with these being the most common requirements:

1. Your business must be at least 1 year old
2. Have at least $50,000 annual revenue
3. Good credit score
4. Effective business plan & financial statements
5. Marketable products
6. Good inventory management system

Typically, your application can take weeks or maybe months to get approved. Oftentimes, lenders do an onsite visit to inspect your inventory, and may also check your accounting records. This is basically part of due diligence.

Once approved, your lender will pay your supplier directly, then the supplier delivers the products to you, and you sell the products to repay the lender. If you fail to pay off the loan on time, the lender could take these products and sell them to satisfy the debt.

Most Amazon sellers encounter a fluctuation in cash flow and may eventually run out of working capital. This commonly happens during holiday seasons, where the product demand is high, yet some sellers are unable to maintain or get additional inventory due to insufficient funds. To apply for inventory financing for your Amazon business, you must meet the same requirements mentioned above to get qualified.

Did you know that Amazon has a lending program for its sellers? Yes, they have, because why not? They need more sellers to keep the business thriving. However, you can’t simply apply for a loan with Amazon Lending Program; Amazon itself offers you a loan if you qualify. Simply put, it is an invitation-only program. The program offers short-term business loans from $1,000 to $750,000 for up to 12 months. Amazon does not disclose interest rates, but it’s surely lower than credit cards’ rates.

First off, you must be:

1. An Amazon top performer seller
2. Must be an active Amazon seller
3. You’re a small business entity

If you are qualified, an Amazon representative may contact you with a loan offer. Thing is, you can’t decide the loan amount, the loan term, or negotiate the interest rate. Amazon makes all the decisions.

When do you get an offer? This we will never know as well. Moreover, the funds are exclusively for your Amazon business only, be it for marketing/advertising expenses, extra inventory, investments in new products, and whatnot. Just like in any inventory financing, if you’re unable to pay off the loan, Amazon has the right to acquire your inventory.

If you never get an offer from Amazon Lending program, you can always try the options mentioned above: banks, vendor financing and online lenders.