To learn more about eBay Seller Capital and decide if it’s right for your needs, please continue reading:
eBay is one of the largest eCommerce platforms in the world, with over 18 million active sellers. The company now offers sellers the chance to receive funding through several programs under eBay Seller Capital.
The primary financing product is a business cash advance, but it also offers a flexible cash advance and term loan option. Business Cash Advance provides pre-approved funding offers ranging from $500 up to $1 million. However, these products are only available to eligible eBay sellers and might not be the best option for every eCommerce business on the platform.
This review explores what you should know about eBay Seller Capital, including the benefits, drawbacks, and application process to help you make an informed decision. Specifically, we’ll answer these questions and more:
eBay Seller Capital is a program designed to assist sellers in expanding their businesses by offering tailored financing solutions for inventory and other expenses. eBay is not a lender and does not make credit decisions or provide loans directly to sellers.
Instead, eBay Seller Capital partners with third-party financing providers to expand capital availability for eligible sellers based on their sales history. The third-party provider determines the terms and conditions of the loans or cash advances, and eBay Seller Capital does not guarantee approval.
Sellers can apply for funding through their eBay accounts with a simple and quick application process. The Business Cash Advance application experience is 100% online and takes as little as three minutes. This allows for flexibility in choosing the amount to borrow and repayment options tied to sales revenue.
The eBay Seller Capital program offers numerous benefits to small businesses, including:
eBay Seller Capital helps sellers get funds quickly through its funding partners. Sellers can apply for funding through the eBay Seller Hub.
The process is simple and fast, ensuring fast funding for various needs, such as inventory or marketing. The funds are sent to the business bank account linked to your eBay seller account.
eBay partners with Liberis, an embedded finance platform, to offer the Business Cash Advance product. This product is a receivables finance structure, not a loan. Revenue finance is a type of flexible funding designed specifically for small to medium businesses. eBay sellers apply to Liberis through their seller account, and the lending company conducts underwriting, approval (or denial), and issues funding. The underwriting process follows the structure for a Liberis revenue-based finance structure.
Instead of an interest rate that accrues interest every billing period like a loan, business cash advances apply a one-time fee, which gets added to the advance amount to calculate your total repayment. Revenue-based financing does not include interest or late fees. This process makes it easy to calculate what you owe, but it can be expensive.
For example, if you receive a cash advance of $10,000 at a factor rate of 1.2, your total repayment would be $12,000 ($10,000 x 1.2). Repayment comes directly from your eBay sales. A pre-agreed percentage of your gross sales goes towards repayment until you’ve repaid the total amount.
eBay Seller Capital also offers a Flexible Cash Advance from Liberis. This option is like a business cash advance but operates similarly to a line of credit.
The business gets approved for a total funding amount but can access it as needed rather than as a one-time disbursement. The one-time fee applies every time the business draws from the available capital, but it only pays fees on the amounts drawn, meaning the business does not have to use all the available funds.
This can help save costs by only using what you need. Repayment comes from a fixed 20% of eBay sales until all funding drawn has been repaid.
eBay partners with Funding Circle to offer a traditional term loan product. Most businesses are accustomed to this product type, which follows a standard loan process.
The lender disburses a one-time payment, and businesses can use the loan proceeds for various business needs. Repayment is based on the principal, interest rate, and origination fee.
The loan repayment requires fixed monthly payments, regardless of sales volume. It could potentially offer a lower-cost option (depending on creditworthiness), but businesses must be prepared for the rigid repayment structure.
Applicants must be active eBay sellers to apply through this platform. The minimum qualifications for each available financing product in eBay Seller Capital are listed below.
Business Cash Advance:
Flexible Cash Advance:
Term Loan:
eBay is not a lender and does not approve or service these loans. The eCommerce giant provides these financing options through its funding partners to help sellers access needed capital.
While applicants can apply through their online seller account, the funding partner (Liberis or Funding Circle) processes the application and makes approval and funding decisions. These lenders might require additional documentation.
In addition, you might have to supply access to your bank account. Some online commentators have noted that the process was more complicated than anticipated due to these reasons.
The application process does not require a hard credit check, meaning applying won’t affect your credit. The lenders may conduct a soft credit pull, which doesn’t impact credit scores. In addition, none of the listed products have a minimum credit score requirement.
When determining these loans, lenders primarily consider sales history and volume because repayment typically comes directly from sales. If approved, your monthly sales revenue usually determines the amount you’ll receive.
The platform does not offer a business loan affiliate program, as it already acts as an affiliate program designed explicitly for eBay sellers. However, ISOs and business loan brokers can contact the lenders about offering funding to their small business clients.
Eligible eBay sellers can apply directly through their dashboard. The application process is quick and easy. Follow these steps to apply.
From your eBay seller account, click on available financing products. Select the program that best fits your needs and qualifications.
Click on the Apply Now button to start the application. You’ll provide some basic information about yourself and your business. The lender may request more documentation.
Once approved, eBay sellers could receive funding as soon as the next business day.
After receiving funding from eBay Seller Capital, sellers can use the money for various business needs, including buying inventory or expanding their operations. Fast access to funding is important for many businesses due to quickly changing opportunities. The process is straightforward. Sellers receive their capital quickly, often within days. Sellers can easily track payment progress and view all reporting in one place on the eBay Seller Hub. Regularly viewing your account details can help you track your payments and manage your finances more effectively.
For both cash advance products, repayment comes directly from eBay gross sales. Each time a seller makes a sale on eBay, a percentage goes toward repaying the loan. Payments for eBay Seller Capital are automated as a small percentage of daily sales after approval. This means that payments vary based on sales performance. If sales are high, repayment happens faster. If sales dip, sellers pay less during those times. These flexible payments can benefit eCommerce businesses with inconsistent revenue.
The term loan carries fixed monthly payments regardless of sales. There are no early payment penalties for any of these products. eBay Seller Capital does not publish renewal information.
eBay Seller Capital offers several benefits for sellers. First, it provides quick access to funds. Sellers can get money fast without lengthy applications. This helps when they need to buy inventory or cover unexpected costs.
The business cash advance products have flexible repayment options. Sellers repay based on their sales. If sales are low, payments are lower, too. This feature makes it easier for sellers to manage cash flow.
eBay sellers can apply for the traditional term loan financing product. Business term loans often offer lower rates and longer repayment terms than merchant cash advances.
eBay Seller Capital does not require a credit check. Many sellers struggle with credit scores, so this option allows them to access funds without worrying about their credit history. eBay provides funding options that require no interest and have no hidden fees. There are no penalties for early payoffs.
eBay Seller Capital offers many benefits. However, there are some disadvantages that sellers should consider.
One major downside is the cost. The fees can add up quickly, and sellers may pay more than expected, cutting their profits.
Another issue is the repayment terms. Sellers must repay the borrowed amount within a set time frame. If sales dip, it might be difficult to make payments on time, which can lead to additional fees or penalties.
Sellers also have a limit on how much they can borrow. eBay’s funding partners evaluate each seller’s performance before approving funds. New sellers might not qualify for more significant amounts, which limits their ability to grow their business quickly.
Cash flow problems can also arise. If sellers need money for inventory but have to wait for repayments, this can stall their operations. This situation can be frustrating and impact overall sales.
Pros:
Cons:
Yes, eBay Seller Capital is a legitimate business funding platform. eBay is one of the largest and most recognized brands globally, and it partners with established lenders to offer these products.
Unfortunately, there are not many online reviews available for eBay Seller Capital. These financing options recently replaced a PayPal working capital option previously available to eBay sellers.
The few online reviews we could find discussed frustration with the application process and the cost. However, some online comments from sellers found the process quick and easy.
eBay’s funding partners, Liberis and Funding Circle, aim to make business financing accessible but still have minimum qualifications. Either funder may deny loan applications for various reasons, such as not meeting the minimum number of transactions or revenue. Other issues may arise during underwriting as well.
The denial letter should explain why and provide information on when you can apply again. If not, or if you need more information, contact the funder directly for more clarification.
Fortunately, many business lenders are available if eBay Seller Capital is not the right fit. Merchant cash advances are commonly available as they are one of the most accessible business funding products. Many lenders also offer business term loans.
You may also be interested in one of the following small business loans:
eBay Seller Capital offers quick and easy funding options for eligible eCommerce businesses that use the auction site. The funding options have accessible qualifications and can help some sellers quickly grow their operations with an infusion of capital for inventory or other needs.
However, the platform does not publish pricing information, making comparing it to other financing options difficult. Before proceeding, carefully review any agreement and ensure you’re comfortable with the cost and repayment structure.
More established businesses with good credit can likely qualify for more advantageous options. When considering small business loans, get offers from multiple lenders to shop for the best deal.
Based on the information available, we rate eBay Seller Capital a 3 out of 5. It can be a convenient option for eBay sellers, but concerns include the lack of transparency on costs, limited funding options, and availability only to eBay users.
Disclaimer: The eBay Seller Capital trademark is owned by eBay Inc., and its use herein is for reference purposes only, and it does not indicate sponsorship or endorsement from eBay Inc.
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