E-Commerce Business Loan: A Growth Partner for Your Online Business

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E-Commerce Business Loan?

As per the Economic Survey 2022-23, India's e-commerce market is expecting annual growth of 18% through 2025. The e-commerce market is not just attracting customers but entrepreneurs as well. The online marketplace attracts customers with lucrative deals, discounts and shopping festivals. On the other hand, it offers business opportunities to entrepreneurs beyond geographical constraints. For instance, an artisan from a small town can sell products worldwide and can have a global reach online.

In this blog, we will discuss how an e-commerce business loan can help an online business to grow.

What is an E-Commerce Business Loan?

E-commerce businesses have unique requirements such as online compliance, lead generation, conversion, and delivery. To meet these requirements, an enterprise needs fast and easily accessible funding options. Hence, different types of lenders offer an online business loan called an e-commerce loan to meet an online business's specific requirements and promote business in the e-commerce sector. These loans are available at an attractive rate and can cover expenses like expansion, designing a website, brand promotion, etc.

Features of an E-Commerce Business Loan

An e-commerce loan is specially designed for online businesses. Some of its striking features are given below:

• These are unsecured business loans and do not require any collateral.

• An e-commerce business can avail of loans starting from ₹1 lakh to ₹1 crore.

• These are short-term loans with a tenure of up to 270 days.

• These loans have low-interest rates starting from 1.5%.

• These loans offer flexible repayment schedule options.

• The loan amount depends on the sales revenue per month.

Eligibility to Avail of An E-Commerce Business Loan

An e-commerce business loan is available for anyone having an online business, a partnership firm, or a business with a presence on an e-commerce platform. To get an e-commerce business loan, businesses or business owners must fulfill certain eligibility criteria such as:

• The business owner should be a citizen of India.

• The online seller should have a registered business with a minimum of 6 months of operation.

• The business should fulfill the minimum requirement of per month revenue as specified by the lender.

• The business should have a strong presence on any popular e-commerce platform like Amazon, Flipkart, etc.

• The business should have a good credit score for better chances of loan approval.

Minimum Business Vintage: 1 year

Monthly Business Sales Minimum: ₹2,00,000

Documents Required for E-Commerce Business Loan

The documents you will need to apply for an e-commerce loan are similar to the documents required for a business loan:

• Personal KYC: PAN card

• Residential Address Proof (Any One): Rent Agreement | Driving License | Voter's ID | Ration Card | Passport | Aadhar Card

• Banking: Last 6 months current account bank statements

• Business KYC (Any One): GST Registration Certificate | Shops & Establishment Certificate | Business PAN Card

Selecting the Right E-Commerce Loan For Your Business

For your business's success, selecting the correct type of e-commerce loan that can fulfil your needs is crucial. Conduct market research and compare various loan options available in the market based on different parameters. Here are some key factors to consider while selecting an e-commerce loan:

• Determine the right amount of loan you need for your business. Calculate all your monthly expenses and sales, and then identify your short-term and long-term goals.

• Compare interest rates and loan processing fees of various lenders. There is a lot of competition in this market. Hence you can leverage this opportunity to get a loan at the lowest interest rates and processing fees.

• Look for lenders that provide fast loan disbursals with minimum paperwork.

• Also, check the repayment schedule of various lenders. It is always good to choose a lender offering a flexible repayment schedule.

• Check the terms and conditions of the loan. Different types of lenders have different terms and conditions. Some may charge interest, while some may prefer an equity share. Choose what suits you best.

Conclusion

An e-commerce loan offers many benefits, such as no collateral, low-interest rates, and fast disbursal. If you need an e-commerce loan for your online business, you may apply for an e-commerce business loan with CapitalBox. We offer competitive interest rates with flexible repayment options.

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