4 Popular Ways to Fund Your Ecommerce Business

As the ecommerce landscape keeps transforming and growing, there are now more funding options to sustain that growth. 

There are several ways you can raise capital for your startup beyond the traditional bank loans, SBA loans, or venture capitals – which are more difficult to get and tend to drag on)

Here, we’ll walk you through faster and more sustainable ways you can get extra capital for your business.

Bootstrap with Your Personal Savings If You Can

Many funding situations require you to show proof of return. If you’re just starting your ecommerce store, it’ll be pretty hard to produce any hard figures that your business is working. 

For this reason, if you can bootstrap with personal savings, then that could be your best option. And should you go this route, you wouldn’t be the only one. 

In fact, a survey carried out by BlueVine, they revealed that 75% of entrepreneurs fund their business with their savings. Many times the money usually comes from a checking or savings account, retirement account like a 401(k) plan, home equity, or a life insurance cash value. 

There are big benefits to bootstrapping with personal savings: One, you won’t have to part with any business equity. Two, your business can grow faster since you don’t have to wait for approval of a bank loan or investor decisions.

Supplier Financing

In this instance, your suppliers extend credit in exchange for some interest on the loan.

Supplier financing is good for getting an advance on supplies or overhead, but it may not give you the much-needed cash to run some vital operations.

Angel Investing

An angel investor is someone who gives you the seed money to get your business started. They also provide other ongoing support to stabilize your business and make it successful.

Once you connect with an angel investor, be prepared to negotiate because they often want to have a share of the business. You need to carefully consider if the equity you’re giving up is worth the amount of the angel’s investment.

Many times, an angel investor isn’t the super-wealthy entrepreneur you might have imagined. Angel investors could be a neighbor, family member, or friend. You can also find one on online funding sites that invest in startups.

 Crowdfunding

For some time now, crowdfunding is usually the go-to place for several startup companies looking to raise capital.

Popular crowdfunding sites like GoFundMe and Kickstarter and many others make it possible for you to pitch directly to hundreds of thousands of investors – who could also be potential customers.

One of the many advantages of crowdfunding besides the capital is the free insight you get from the crowd. From the questions and comments alike, you can glean valuable information to tweak your product or service to better suit customer’s needs.  

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