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The 4 Best Ways for an E-commerce Business to Use a Small Business Loan

Online shopping and e-commerce have been on a steady rise for decades, and this long-term trend has accelerated at a staggering pace since the pandemic forced global lockdowns in 2020.

E-commerce sales in the United States alone hit $800 billion in 2021 — a stunning 50.5% spike compared to 2019, according to the U.S. Census Bureau. Digital sales now account for more than 13% of all retails sales in the nation, and this represents a major opportunity for all e-commerce companies.

The takeaway? Digital growth is booming, and chasing this revenue should now be a key goal for all entrepreneurs. 

For many companies, pursuing a small business the best way to take advantage is Best Loan Apps . This can provide valuable working capital to help fuel growth, and owners should consider these four ways to use small business financing for their e-commerce business.

1. Stock Up on Inventory

You can’t sell what you don’t have. This is why so many small business loans are used to stock up quickly and get volume pricing benefits from manufacturers.

This is especially true for seasonal businesses and others that experience peaks and valleys in their sales patterns. If you have confidence in upcoming sales forecasts — but lack the free cash on hand to get enough inventory — this can be one of the smartest ways to make a loan or cash advance work for you.

2. Increase Your Advertising & Social Marketing

It’s hard to grow without new customers. Increasing organic growth should always be a goal, but at a certain point you need to attract new buyers and use creative strategies to retain your current customers.

Today, for most consumer-facing retail businesses, that means social media. Be smart with how you spend in this area, but there is a reason why so many small companies focus their ad dollars on Facebook, Google, Instagram and other social channels.

3. Step Up Your Fulfillment & Shipping

While many small businesses start out of a garage, it’s vital to professionalize as much as possible as time goes on. Order fulfillment and shipping are great areas to offload as much as possible.

Not only will this ensure customer satisfaction, but it will help you devote less time to these time-consuming logistics and instead focus on growth. This is one way you can start working on the business instead of in the business — and having a little upfront cash on hand will help you get through the transition phase.

4. Refinance Higher-Interest Debt

As a rule, getting a loan to pay off an older loan is not a great plan. This can become a vicious cycle and land you in a permanent debt trap. That said, if you previously made some less-than-perfect decisions — perhaps by looking for loans for businesses with no credit — small business financing with friendlier terms may help if you are currently being held back by high-interest payments.

Critically, you must now have the revenue  — and discipline — to pay off debt. Do not double down and get yourself in trouble. But, for the right business at the right time, this can be a viable option.

Getting the Right Small Business Loan for You

One important thing for all business owners to remember is that not all small business loans are created equal. There are more options than ever, but finding the right terms from the right partner can be a key element to success. From inventory to advertising and fulfillment to refinancing, there are many great ways that an e-commerce company can use a small business loan. But be sure that you are pursuing this financing for the right reasons — and finding the right provider.

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