Running an ecommerce business costs money.
Whether it’s buying a new computer with faster processing capabilities, sourcing new inventory so you can sell more and make more, updating your workspace to make it more efficient or, bringing in project based help to get your holiday inventory listed…
It takes money to grow.
Unfortunately for small (and especially home-based, online businesses) the availability of growth-captial is in short supply. Especially from traditional sources such as banks and credit cards.
Enter Kabbage, an Atlanta based company with one goal – “Funding for your online business.”
Kabbage provides short-term loans to online sellers using credentials that other lenders don’t/won’t. They use marketplace and PayPal data from your online business to process your request for capital. An analysis that includes things like transaction volume and consistency, customer feedback/reviews, your product line and more.
Understanding the World of Online Sellers
What sets Kabbage apart from a traditional lender is that they understand the world of online sales, whereas many traditional banks do not. In fact, traditional lending institutions can be downright leery of lending money to a home-based online sellers – even those with a proven track record.
Kabbage also understands that many online sellers only need a short-term loan to help them get to the next level.
It may only take $1000 to attend a trade show or $3000 to source new inventory once you’re there, but not having access to that $4000 means the difference between your ability to grow your business or staying stuck until you can earn enough money to fund your tradeshow trip or buy new inventory.
Kabbage Founder and CEO Rob Frohwein says:
“Thousands of online merchants have obtained working capital and grown their businesses since our push into the market in April 2011. Although small business fuels the majority of growth in the U.S., it is extremely difficult and time consuming for these businesses to apply for and actually receive financing from a traditional bank. Kabbage fills this need by providing money to these businesses in a quick, easy and painless way, helping them to further grow their businesses and boost the economy.”
Online sellers can apply and be approved for a short-term advance, also known as “Kabbage Kash” in minutes. Once approved, you can use your cash advance line if/when you need it.
It’s free to apply and be approved. Once you use your cash advance, you have six months to repay it. Cash advance rates are determined by your credit history and store performance, as well as the length of time you keep the cash advance. If you pay it back earlier than 6 months, you’ll pay less.
Kabbage has a patented technology that enables them to evaluate seller’s businesses and credit history. Currently Kabbage supports eBay sellers, Amazon sellers and Yahoo store owners.
This week Kabbage announced that they’ve just received $17 million in funding which will allow them to add funding support for merchants who sell on Facebook, Etsy, Sears and Shopify.
Your Ability to Source Quality Inventory Increases Your Sales
I first met the folks from Kabbage this spring and recently caught up with them again here in Seattle at the Amazon Seller’s Conference in July.
At that time, I sat down with Russell Walraven to talk more about the company’s goals to help online sellers grow. Fresh off the announcement that Kabbage would now be supporting Amazon sellers, Russell said that the response to Kabbage cash advances was overwhelmingly positive. Seller after seller stopped by the booth to tell the Kabbage group that the #1 thing they need is cash to buy more inventory. With Amazon sales skyrocketing off into the stratosphere, lack of product to sell was the only thing holding back Amazon sellers from selling more.
Interestingly, Amazon category managers at the conference told me the same thing. “We need more product. Amazon’s growth is only limited by product selection. And we’re looking to 3rd party merchants to fill that need.”
Kabbage provides a win-win situation for online sellers ready to expand.
Many of my clients and students have already applied for and used Kabbage as a source of funding for their business. They’ve raved about the simplicity of applying and the fact that Kabbage speaks in “plain english” as just two of the reasons they feel that the folks at Kabbage understand their needs as online sellers.
You can learn more about Kabbage and see if you qualify for an advance in seconds.
-Lisa
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