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E-commerce business owners are always looking for ways to be more efficient and save on costs. One way to accomplish both goals is by owning your own warehouse. Without sufficient cash flow, this might seem out of reach, but with the help of a Small Business Administration (SBA) loan, expanding your e-commerce warehouse and fulfillment operation is achievable.
At Business Funding Group (BFG), we have years of experience helping small business owners secure the funds they need to grow their businesses. In some cases, that means buying a warehouse! An SBA loan can help a business owner purchase a warehouse, which saves money and time.
Schedule an initial consultation with BFG to find out whether an SBA loan could be right for your online business.
Owning a Warehouse Is a Smart Move for E-Commerce Businesses
Running an e-commerce business can quickly become expensive if you use third-party fulfillment services, such as Amazon FBA. These services may be convenient, but the fees may be cutting into your profit.
When you own a warehouse, you have more control over your business and can save money at the same time. Rather than paying high fees for storage, packaging, and shipping, you regain command and management of that part of your business.
A warehouse gives an e-commerce business owner flexibility to use the entire space for their needs or rent out a portion of it to other businesses. With SBA loans, you can rent out part of the warehouse as long as your business occupies at least 51% of the space.
Additional benefits to owning a warehouse as an e-commerce business include scalability and asset appreciation—two things you miss out on when using someone else’s warehouse for your operations.
How an SBA Loan Can Help
SBA loans can help business owners purchase commercial real estate. One obstacle many businesses face is the large down payment typically required for a traditional bank loan. With an SBA loan, you may qualify for zero down payment or need as little as 10% down!
Financing through an SBA 7(a) or 504 loan could also provide a long repayment term of up to 30 years. Such a repayment period could mean lower, more manageable monthly payments.
Unlike some traditional loans, SBA loans often have fixed interest rates. Having predictable payments provides stability for e-commerce business owners. It saves you from worrying about high monthly payments caused by a hike in interest rates.
In addition, SBA loans allow small businesses to borrow large amounts to purchase commercial real estate. With the popular SBA 504 loan, a business could secure approval for $20 million or more.
Would My E-Commerce Business Qualify for an SBA Loan?
The SBA can offer such favorable terms because the loans are government-backed. With lenders taking on less risk, more small businesses are eligible.
Eligibility for an SBA loan rests on several qualifiers set by the SBA. The criteria you must meet include:
- Having a good credit score and history
- Having the cash flow to demonstrate your ability to repay the loan
- Running a for-profit business
- Operating in the United States
- Being a small business
Part of our expertise at BFG is assessing whether a small business would qualify for an SBA loan. We know your time is valuable, so a quick call with us can give you a good idea of whether you are eligible.
Contact BFG to Discuss Expanding Your Online Business With an SBA Loan
SBA loans can significantly help in expanding your e-commerce operations. The purchase of a warehouse could allow for more efficient and cheaper fulfillment, keeping more of your profits in your business.
The process of applying for and securing an SBA loan may seem daunting, but at BFG, we are here to help. As experts in the world of SBA loans, we can simplify the process and guide you right up until your loan is approved!
If you are ready to get started, reach out to us today for a free 15-minute call.