A seller’s guide to financing eligibility and application success
Securing financing can be a game-changer for small businesses—allowing them to scale operations, manage inventory and navigate seasonal slowdowns. But before you apply for funding, you should make sure you understand the eligibility requirements and learn how to best prepare for the application process.
Financing eligibility and applications are surrounded by myths, like the idea that finance providers only look at your credit score or that only traditional banks can provide financing. Learning what finance providers actually focus on can boost your chances of approval and set your business up for growth and long-term stability. With our guide, you can become an expert on eligibility criteria and build a stronger application.
What finance providers look for in small businesses
Eligibility depends on the type of financing (learn more about types of financing) you’re aiming for, but most finance providers look at similar factors when deciding if you qualify.
According to money.co.uk1, a recent UK government business report found that around seven in ten UK businesses in 2023 had been in existence for less than 10 years. A longer time in business is usually preferred by finance providers since it proves your reliability to handle financial obligations, and it assures them that you will be able to pay them back. However, this does not mean that newer businesses do not qualify.
For example, some conventional bank loans require you to have been in business for at least two years. However, some revenue-based options may consider shorter durations if your business shows potential. With eBay Seller Capital, our finance providers require at least three months of operation.
Similarly, annual revenue and cash flow provide insight into whether the business can handle repayments. If your revenue is consistent, it signals stability, making finance providers more confident in working with you, especially during slower seasons. British Chamber of Commerce Insights found that the majority of businesses seeking external finance stated cash flow challenges as the primary reason.2
Credit scores, both personal and business, also play a vital role. The first step to maintaining or improving your credit is to know your score and keep track of its changes. Experian estimates that nearly two-thirds of business owners have never checked their credit score, and nearly 90% don’t know what goes into it³. This highlights a significant knowledge gap regarding business credit scores, which are crucial for accessing finance loans and other opportunities. A healthy score can help boost your approval chances and secure lower interest rates or fees, since it reflects payment history with vendors and other institutions. It’s important to note—not all finance providers use a credit score to determine financing. Some finance providers have internal scoring systems to assess creditworthiness. YouLend, for example, takes into account a seller’s credit score but also other factors, like sales history.
Pro Tip: Stay ahead of potential issues by checking your credit score through platforms like Experian, Equifax or TransUnion regularly.
Sales history, particularly for e-commerce sellers, can showcase your consistency and ability to generate predictable revenue. For sellers on platforms like eBay, demonstrating a steady track record of sales can improve your eligibility. Finance providers will also review existing debt and financial obligations to assess how much additional financing you can reasonably manage without overextending.
It’s worth noting that many traditional funding methods do not take sales history into account, making it difficult for online sellers to get financing. Finding a method that considers sales history, like eBay Seller Capital, may be an easier option for these businesses.
Simplifying the application process
Financing your business may seem daunting, but it doesn’t have to be. Understanding what finance providers expect and preparing for it can improve your odds of approval and speed up the process.
The first step? Decide how you want to use your capital. Whether it’s for expanding inventory, covering operational expenses or scaling business operations, aligning the financing product with your business goals increases your chances of success. Once your objectives are clear, it’s time to explore the options available. They can range from term loans for long-term investments to merchant cash advances that adapt to fluctuating sales. After deciding which financial option suits your needs, you can start gathering the necessary documentation in advance to reduce delays and ensure a smoother process. Finance providers typically require your business bank statements, tax returns and sales records.
Applying is often a quick online process, but make sure your information is accurate to avoid processing delays. Once submitted, applications go through underwriting, where finance providers assess your financial performance before making a decision—these are typically processed in less than 24 hours. If approved, funds are often disbursed quickly, sometimes within 24 to 72 hours.
Pro Tip: Create a digital folder with key documents and update it quarterly. This way, you’ll be ready for financing opportunities, whether expected or not.
Why eBay Sellers have an edge
For eBay sellers, the financing landscape offers unique advantages. eBay Seller Capital, powered by YouLend, leverages real-time sales data to pre-qualify or pre-approve you for tailored financing. This means minimal paperwork and faster decisions, making it easier for you to access the capital you need. When it comes to evaluating your creditworthiness, eBay’s financing partner carries out a soft credit pull, which will not affect your consumer credit score, unlike traditional methods that require a hard credit inquiry.
Business Cash Advance (BCA), financed by YouLend, offers a sales-based payment, allowing flexibility during slower periods. If you’re eligible for financing by YouLend, you may receive a personalised offer by email to apply. You can also check for offers on the eBay Seller Capital page in Seller Hub. Applying for finance through YouLend won’t impact your credit score, however, taking out finance and not repaying it can. Your application can take as little as five minutes—you can even speak to the YouLend team directly if you need any help.
Pro Tip: Regularly review your financing eligibility in Seller Hub. Be sure to take advantage of pre-qualified or pre-approved financing offers.
Boosting approval chances
Improving eligibility is not just about meeting minimum criteria but optimising your business profile to appeal to finance providers. Monitoring and improving your business credit score, ensuring consistent revenue patterns and maintaining manageable financial obligations will all help your application stand out.
Entrepreneurs who proactively track their credit and prepare for seasonal fluctuations show readiness and reliability, giving finance providers more confidence and increasing their chances of approval. For e-commerce sellers, showing consistent sales performance and taking advantage of flexible financing options can make a significant difference in securing the right type of capital.
Empower your business with capital today
Whether pursuing traditional term loans or revenue-based financing tailored to e-commerce sales performance, being prepared and informed will put you in a better position to access capital.
For eBay sellers, the path to financing is even smoother, with a personalised option readily available through eBay Seller Capital. But regardless of the platform, taking control of your business’s financial profile opens doors to funding opportunities that can fuel long-term success.
Ready to explore your financing options? Prepare your business to take the next step toward sustainable growth.
Learn more about your eBay Seller Capital funding options.