eBay Partners With Liberis For Business Cash Advance Loans, Filling Gap Left By PayPal Split
UPDATE 7-9-24
Several sellers in Florida who have tried to apply for an eBay Business Cash Advance through Liberis have encountered an error message saying "Thank you for considering eBay Seller Capital. The program is not available to you at this time, either because it is not available in your state or because of the status of your eBay account."
New Mexico is the only state specifically called out as ineligible in the terms and conditions, with no mention of Florida, but yet these sellers are being told by Liberis support that it is unfortunately not yet available in their state.
I asked Liberis as I’m also in Florida and getting same message.
Here’s what they said:
“We apologize for the confusion, but we currently do not offer the cash advance to the state of Florida. We are working on this and will be able to do so in the near future.”
eBay has finally figured out how to fill the gap left when they lost PayPal Working Capital loans, introducing a new financing product through Liberis that allows seller payback with a percentage of sales rather than a fixed monthly payment.
The new option has been added to the eBay Seller Capital page today, raising the question - why didn't eBay announce this as part of the bigger Summer Seller Update earlier this week?
Business Cash Advance from Liberis
Gain fast access to financing with a one-time fixed-fee and a payment plan that adapts to your sales, so you only pay as you sell.Financing up to $1M with flexible payments.
To qualify for Business Cash Advance, you must have:
- Sales history within the last 3 months on eBay
- One transaction per month in the last 3 months
- At least $5,000 total eBay revenue in the last 12 months
Sellers will also still be able to use the more traditional working capital loan product eBay has offered through their recent partnership with Funding Circle.
Liz Morton
Here's how eBay describes the difference between the two financing options:
What is the difference between Business Cash Advance and a term loan?
Business Cash Advance is an advance on your sales and is not a loan—the cost comes in the form of a fixed fee, not interest. Also, unlike a term loan that has fixed monthly payments, Business Cash Advance is paid on a pre-agreed percentage of your gross sales. You only pay for the advance when you sell.
A term loan is a traditional financing option that charges interest and is repaid within a given term. You have to repay the term loan whether you sell or not.
As always, you'll want to read those terms and conditions carefully, as taking out a Business Cash Advance will require eBay to create a Limited Use Stored Value Account on your behalf to enable them to facilitate the process of holding and transmitting a percentage of your sales revenue to pay back the advance.
It's important to understand a Stored Value Account is not a bank account, the balance of funds reflected in your Stored Value Account do not constitute deposits, you will not earn interest on funds held in your Stored Value Account, and the Stored Value Account is not eligible for FDIC pass-through insurance.
There may also be additional risk of funds being placed on hold or other restrictions and limitations that come along with having a Stored Value Account to facilitate these services, so sellers would be wise to weight all the possible pros and cons before applying.
Chief Growth Officer Julie Loeger had teased the idea of offering this type of flexible financing during her presentation at Investor Day in 2022 and eBay has previously rolled out similar options in German and UK markets.
Liz Morton
US sellers have been slow to adopt other eBay offered funding options with many saying they wouldn't even consider it without the option to pay a percentage of sales, like the old PayPal Working Capital loans they had access to before eBay switched to Managed Payments.
Now that eBay has apparently found a solution to unlock that capability, will sellers enthusiastically get on board or will it be too little too late, with eBay squandering significant seller goodwill and trust in the last few years?
Let us know what you think of eBay Business Cash Advance from Liberis in the comments below!
