About hair care business inventory financing
Specialized hair care products are in high demand, and that’s not likely to change any time soon. Influencers touting multi-step hair care processes involving a variety of hair products such as shampoos, conditioners, gels, creams, serums, towels, hair dryers, and more have only helped increase demand. Trends are constantly changing, too. You need to stay on top of the latest fads if you want to keep up with your competitors. This requires forecasting, budgeting, and of course, procuring inventory. In order to keep up with the costs involved, hair care business financing might be necessary.
There are several types of funders that may be willing to work with hair care businesses. They provide you with the opportunity to stock up on supplies in order to cater to the latest trends. You’ll also need to invest in marketing if you want to succeed in the competitive industry. Financing can be wielded as a tool; all it takes is research, creativity, and forethought to make it successful.
Financing opportunities for hair care businesses
After researching banks and financing solutions, you may be overwhelmed by the options. Every financial institution has unique guidelines and requirements. One lender might approve you quickly, while another might reject you due to a low credit score. It’ll take some searching in order to find the right funding partner, and even more consideration when choosing the right type of financing for your business. With that in mind, we’ve compiled a list of funding options to help you decide.
Bank loan
As one of the oldest and best known types of funding, bank loans remain a popular option for those in need of financing. In order to secure a bank loan, you choose a bank and fill out a mountain of paperwork. If you qualify, the bank will give you a lump sum of capital which you will then repay in fixed payments according to a set schedule.
Bank loans tend to have long lists of requirements, such as a high credit score, long business history, and even collateral. This type of loan usually has lower interest rates due to the fact that you are a low risk after all these requirements are met. Many eCommerce businesses don’t qualify for bank loans, and if they do, they may struggle to make the fixed monthly payments during a slow sales month. Ask yourself if you can afford the large monthly payment before accepting an offer or going through the tedious application process. This is not the type of funding for those who need quick cash to pay for day-to-day expenses or emergency costs.
Revolving line of credit
A revolving line of credit is a great type of loan for those who need help maintaining day-to-day expenses. It can help you with those supply chain payments, platform dues, or marketing costs. It’s cash on hand to use for emergencies or to fulfill last-minute orders. Like a credit card, you can use the amount of funding you need, up to a set limit. Once you repay what you’ve borrowed, more capital becomes available. You only have to pay interest on the amount that you’re using, and you can choose when and what you spend the money on.
This type of loan does have higher interest due to the flexibility it offers. The borrowing limits are on the lower side, so if you’re planning on making large purchases, this isn’t the loan for you. Depending on the lender, you might have to pay extra fees for various reasons. Read the contract carefully before signing on the dotted line.
Merchant cash advance
A merchant cash advance is another easily-obtained type of funding. The cash is available quickly and the repayment is flexible. In order to be eligible for a merchant cash advance, your business must bring in regular revenue through credit and debit card sales. This is because you’ll repay your funding as a percentage of your future debit and credit card sales. No collateral is required and your business history isn’t a huge factor in their approval process.
This may be the answer for your business if you’re in need of quick funds, but keep in mind that this loan type has a higher cost of capital than more traditional forms of financing. It won’t help you build credit history either, so you’ll have to take other steps to raise your score. If you fail to make the payments, they have the right to remove funds from your account, regardless of sales volume.
Inventory financing
Inventory is vital to those who sell goods, and hair care businesses are no different. Inventory financing is financing specifically for your inventory. Your loan will be secured with the inventory itself, as it will serve as collateral. Lenders often have lenient requirements when it comes to this loan type, so your credit score won’t always be a factor. Plus, you’ll gain necessary funds to stock up your warehouse.
With this inventory financing, you may have to deal with lenders performing regular evaluations on your inventory, so keep accurate records. You might not obtain the full amount of funding you need for your inventory order, so consider if you can afford the difference and the fixed monthly payment. Some lenders have loan minimums that can be out of your price range, too, which means you’ll have to shop around until you find a lender that works for you.
Crowdfunding
Crowdfunding is a good financing option for businesses that don’t qualify for regular bank loans, or those that don’t want to repay their investors in the traditional sense. In order to gain the capital you need through a crowdfunding campaign, you’ll pitch your project or idea to many investors. If they like your idea, they’ll invest in your business. Most successful crowdfunding campaigns are funded by numerous investors that each give a smaller sum of money. It doesn’t involve credit checks or business evaluations, as these are private people who can spend their money how they wish.
There are many online crowdfunding platforms you can explore in search of investors. However, competition is heavy and many crowdfunding campaigns fail to reach their goals. You’ll have to put time and effort into your campaign if you want to succeed. In many cases, you won’t have to worry about repaying your investors right away. Instead, you’ll give them rewards for their generosity, or a small share in your business.
Equity Financing
Equity financing involves selling shares of your company to investors in exchange for funds. The investors are most often venture capitalists or angel investors. These individuals and firms look for businesses they believe will be profitable down the line. They give them hefty sums of capital to help them succeed in the hopes that they’ll profit big when the business does.
An added benefit of equity financing is that your investors will likely bring expertise and experience with them. They’ll be happy to offer advice to help you succeed. Keep in mind that these investors now own a portion of your company, so they’ll have sway over business decisions. You’ll have to share the profits with them, too, and their cut may cost more than interest on a regular loan. Their income is also not tax deductible, unlike paid interest on a loan.
Revenue-based financing
If you have strong, consistent revenue, then you can use it to secure revenue-based financing. A funding partner can provide you with the funds you need to boost your operations, which you’ll repay with a percentage of your future sales. The amount of funding you’ll receive and the length of the repayment period depends on your sales volume. Although they’re providing you with the funds, they don’t take any equity in your company. This is a great way to receive quick cash without the hassle of meeting strict eligibility requirements.
Revenue-based financing is often a good option for eCommerce businesses, such as those that sell hair care products. You won’t have to worry about fixed repayments, instead paying sums that fluctuate with your sales revenue. However, make sure to read over the contract carefully to ensure you don’t get caught off guard by hidden fees. You’ll need steady revenue to qualify, and the cost of capital is often quite high.
8fig financing for hair care businesses
Businesses that sell hair care products online need to be able to manage, plan, and improve their operations. 8fig works specifically with eCommerce businesses, and therefore we understand the challenges associated with the industry. We’ll provide you with a personalized financing plan to pay for up to 90% of your supply chain costs. In addition, you’ll get access to the tools you need to plan and carry out your business operations. With 8fig by your side, you’ll be able to reach your sales goals and grow your business faster than ever.
Why use 8fig for hair care business financing
Consistent cash flow is the key to staying in stock and keeping up with trends. Large lump sums are difficult to repay, and fixed monthly repayments quickly eat into your budget. 8fig gives you the ability to improve your cash flow by offering you continuous funding. That means you’ll get numerous cash injections according to your supply chain needs, instead of one lump sum. Plus, 8fig Growth Plans are flexible, so you can change details as you go and grow at the pace you choose.
How 8fig works
1. Apply
The application process is fast and easy. Answer some questions about your business and sales, and then provide basic information about your supply chain stages and expenses.
2. Connect your store and bank account
In order to provide you with an optimized Growth Plan, 8fig requires that you connect your store and bank account to the 8fig platform.
3. Get funded
With 8fig, you can get funded in just days. Since 8fig funding is continuous, you receive capital infusions into your business right when you need it.
4. Make adjustments
If something changes and you need to adjust your payments, remittance schedules, or even funding amount, you can always do so thanks to 8fig’s flexibility.
5. Grow your business
All that’s left to do is sell, sell, sell. With 8fig, businesses are able to scale 4X as fast.
What 8fig offers in addition to financing
8fig offers hair care businesses that sell products online more than just a great funding option. We’re a fully fledged growth platform that supplies you with tools to predict trends, increase revenue, and optimize cash flow. We consider you a business partner, unlike banks who send you away after the transaction is complete. However, we don’t require any equity in your business, either. 8fig will be there with you for the long-term, helping you better plan and manage your business.
When you’re strategizing, you need to be able to map your supply chain and forecast sales correctly. 8fig offers these tools and more, along with a built in cash flow optimization strategy. It’s an all-in-one eCommerce operating system to help you grow your business and reach your full selling potential.
Who is eligible for 8fig hair care business financing
The 8fig application process is quick and easy compared to most other funding providers. If you’re eligible, you’ll receive your funding in days, rather than weeks or months. There’s no mountain of paperwork, no credit check, and no collateral required. All 8fig asks is that you sell a product online, have at least 12 months of trading history, generate $100,000 or more in yearly sales, and have made an average of $8,000 in sales per month for the last three months before applying.
How to apply for 8fig financing
It’s easy to apply for 8fig financing, and it only takes a few minutes. Simply answer the questions and follow the prompts and you’ll get funded in no time!