Finding the right financing option for your business
Securing financing can help keep your business running smoothly, whether you’re stocking up on inventory, investing in advertising or bringing in extra help. Almost a quarter of UK small to medium-sized enterprises (SMEs) cited cash flow challenges and lack of working capital as a barrier to growth1.
With the right funding strategy in place, you can make better business decisions and achieve stability and growth. Before you make that decision, it’s important to understand what options are available and what options may work for you.
Use our guide to small business funding options, including eBay Seller Capital, to determine the best choice for your needs.
What options may work for me?
As a small business owner, you have a variety of funding options at your disposal. Choosing the right one will depend on your position, needs and goals.
One option to consider is a traditional bank loan, where you can get a lump sum with fixed repayment terms, suitable for significant investments. These loans can be secured (requiring collateral) or unsecured (potentially needing a personal guarantee), and interest rates can be fixed or variable. Eligibility typically requires being a UK-based business with a positive credit history and a viable business plan. The application process involves detailed forms and documentation, which can take several weeks to process. This approach is best suited to established sellers with good credit and a clear business plan who require funds for significant investments, such as equipment or expansion.
If you’re looking for more flexibility, a line of credit may be a better option. This provides sellers with access to a pre-approved credit limit that can be drawn upon as needed, with interest charged only on the borrowed amount. It offers a flexible method of managing cash flow and is best suited to sellers who require flexible working capital to manage short-term cash flow gaps. The application for this method can be a lengthy process, similar to traditional bank loans.
Government-backed Start Up loans offer unsecured personal loans over periods ranging from 1 to 5 years.2 They offer amounts from £500 to £25,000 (up to £100,000 for multiple partners) for new businesses (under 3 years old) with a fixed 6% interest rate and free mentoring. This method is best suited to new businesses and early-stage sellers struggling to access traditional finance, providing initial capital and support. If you’re interested in applying, you must be over 18, a UK resident and unable to secure other finance. Applicants are also required to submit a Business Plan, Cash Flow Forecast and Personal Survival Budget as part of their application.
Pro Tip: Make sure to conduct thorough research to get a clearer picture of your preferred funding method, compare offers from different lenders and read loan agreements carefully.
How does eBay Seller Capital compare?
eBay Seller Capital products are designed with sellers like you in mind and can differ from conventional lending methods. You can apply in minutes, and if approved, you can get funds straight to your bank account, typically within 24 hours. There’s no paperwork, no impact on your credit score and no penalties. We’ve simplified the process from start to finish to ensure it’s easy for you to receive funding.
A Business Cash Advance provides an advance on sales, offering a lump sum of capital upfront once approved—the cost is a fixed fee rather than interest. Unlike a term loan with fixed monthly payments, the current eBay Seller Capital cash advance, provided by YouLend, is paid through a pre-agreed percentage of gross sales. Payments are only made when you sell, though some minimum payments may apply. If you require additional funds, you can apply for a renewal, which is typically available when the business cash advance has been repaid to around 60%.
Discover the right funding option for your business
Selecting the right financing option requires assessing your business’s current needs, growth plans and payment capabilities. While conventional loans may suit some businesses, flexible options, such as a Business Cash Advance, that are specifically tailored for e-commerce platforms, can be more beneficial depending on your needs. By understanding the different funding options available, you can prepare for anything.
Explore eBay Seller Capital solutions for fast cash flow support, flexible repayment options or funding to fuel your next big expansion.
Learn more about your eBay Seller Capital funding options.