Getting loans to fund an E-commerce startup

So how do get loans to fund an E-commerce startup? The first place you’ll want to look for is traditional small business lending. For the most part, though, we suggest you don’t look at bank loans, because they’re extremely difficult to get for the vast majority of entrepreneurs. (That’s excluding SBA loans, which are issued by banks. More on that later.) Instead, you might want the expediency of an online lender, plus some of the flexibility that they offer.

Here are some options to consider:

Business Line of Credit

Best for incremental ecommerce expenses

As you’re building your business, you might find that you need e-commerce funding here and there, not all at once. A business line of credit is an excellent type of financing for that.

As a kind of hybrid between a traditional business loan and a credit card, a line of credit enables you to draw against a pre-approved amount of financing, and only pay interest on what you’ve borrowed. It’s almost always a higher limit for a lower interest rate than a business credit card. And it’s a great tool to have in your back pocket for general working capital expenses like overhead or payroll, investments like marketing campaigns, or emergencies like system maintenance.

Inventory (Purchase Order) Financing

Best for ecommerce companies in a period of unexpected growth

Ecommerce can be a slow burn. But there may be those lucky moments when your product gets picked up by a major influencer. Maybe a celebrity is photographed on your bespoke bedspread, or Vogue features your personalized pill box. All of a sudden, you’re inundated with orders… that you can’t possibly produce with the cash flow you have. All of a sudden, that slow burn is a box of fireworks, and you’re in the grand finale. Here’s where inventory financing, or purchase order financing, comes in handy. It’s a reliable type of funding for an ecommerce business, because a lender will advance a large portion of the cost of your production to the supplier or manufacturer. You’ll pay interest to the lender. But if your margins are solid, it’s a small price to pay for new customers who could become recurring if you get them their product faster.

Invoice Financing

Best for ecommerce businesses with cash flow problems

Ecommerce isn’t just B2C. In fact, one group of researchers estimated that B2B ecommerce sales will hit $1.7 trillion by 2020. If you’re among that group of entrepreneurs, then, you might extend your customers trade credit (which you might know as “net terms”).

Trade credit is a form of somewhat informal short-term financing, in which you extend your buyers a certain period of time to pay off a portion (or all) of an invoice. That can make your cash flow uneven—especially if your customers pay late or not at all.

Invoice financing is e-commerce funding that can help with cash flow issues. In this kind of business loan, you work with a lender to front you up to 85% of the outstanding invoice. When you collect the invoice, you’ll receive the remainder, minus any lender’s fees. Many small businesses across many industries do this. It could be a great option for you, too.

SBA Loan

Best for well-established e-commerce businesses looking to expand

This well-known type of financing is available to e-commerce businesses with strong financial track records and time in business under their belts. Guaranteed by the U.S. Small Business Administration, SBA loans are doled out by intermediary lenders that work directly with borrowers to provide preferred repayment terms.

Since these loans aren’t easy to get, and approval takes time, you shouldn’t bank on an SBA loan if you’re a brand-new business with little financial track record to present or if you’re trying to secure funding ASAP. But if you think you might qualify for an SBA loan, it’s worth the application process.

Say you want to open up a brick-and-mortar location for your e-commerce business like many innovative companies are doing to establish a different type of presence. That’s a great use for an SBA 7(a) loan, the most popular type of funding within the program. Financing through the SBA can be just what you need to take your e-commerce business into a major new growth phase.

Business Credit Card

Best for e-commerce startups

Business credit cards are a powerful source of funding for an e-commerce business—especially if you’re in your nascent days.

As much as you feel confident in your new ecommerce startup, lenders don’t necessarily see your new business with the same rose-colored glasses. Often, they require a longer financial track record from businesses before they lend out money. That includes a business credit score, as well as time in business, so they can examine your history of revenues and stability. In short: There’s a good chance you might not get the traditional business funding you desire.

And actually, you can use a business credit card kind of like a short-term loan. If you can qualify for a 0% intro APR business credit card, you can spend it for a predetermined period without interest. And if you pay off your balance before the end of the introductory period, you don’t have to pay any APR at all. Some intro periods last upward of a year—plus, you’ll be building valuable business credit along the way, which you’ll need when you want bigger financing later.

How to Choose Your Best Fit Among Ecommerce Finance Options

The retail economy is quickly shifting toward direct-to-consumer goods, and that’s great news for ecommerce entrepreneurs. There are more ways to access ecommerce funding than ever, and more types of ecommerce finance to explore, too.

Before you pursue funding for an ecommerce business, however, you need to make certain that you’re accessing the most ideal source of financing for you. Here are a few things to ask yourself to help figure it out:

  • How quickly do I need money?
  • How much money do I need?
  • Do I have strong business financial history to show a lender or investor?
  • What, exactly, am I looking to finance?
  • Am I willing to pay interest or a fee for this financing, or do I prefer to give up equity? Or neither?

If you don’t know what you want, you may not be quite ready for e-commerce funding. And you’ll need to know your own business through and through before anyone is going to be ready to get on board with lending to—or investing in—you, too.

See Also: IDEAL INVENTORY LEVEL, WHY IS SAFETY STOCK IMPORTANT?

Social Share:

sbobet 88

Slot Deposit Pulsa 10k

Slot Deposit

Slot Server Luar

Daftar SBOBET

Situs Judi Slot Terbaik dan Terpercaya No 1

Slot Deposit Pulsa

Casino Online Uang Asli

daftar sbobet

Slot Bonus New Member 100

Slot Deposit Dana

Akun Pro Thailand

RTP Slot Gacor Hari Ini

Slot Deposit Via Pulsa

RTP Slot Gacor

Slot Deposit Dana

daftar sbobet

Akun Pro Kamboja

Slot Online Deposit Pulsa

agen sbobet

Slot Deposit Ovo

RTP Slot Pragmatic Tertinggi Hari Ini

RTP Slot Hari Ini

sbobet88

Slot Deposit Via Dana

Depo 50 Bonus 50

Depo 50 Bonus 50

RTP Live

Live Casino

Depo 50 Bonus 50

SBOBET

Slot Deposit Pulsa 10rb

RTP Slot

RTP Slot

Bonus New Member

Slot Bonus New Member 100 di Awal

Bocoran RTP Slot Gacor Hari Ini

Slot Deposit Via Dana 10rb

sbobet 88

RTP Slot Tertinggi

depo 50 bonus 50

sbobet 88

Depo 50 Bonus 50

Slot Deposit OVO

RTP Live Pragmatic

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Gacor Terbaru

Judi Roulette Online

Slot Online Deposit DANA

RTP Slot Tertinggi

Slot Gacor Terbaru

RTP Slot

Slot Deposit Via Dana 10rb

Slot Bonus New Member 100 di Awal

Judi Bola Online

RTP Slot Pragmatic

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

RTP Slot

Slot Bonus New Member 100 di Awal

Slot Gacor

Slot Deposit Via Dana 10rb

sbobet 88

RTP Live

Slot Gacor Terbaru

RTP Slot Tertinggi

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

sbobet 88

Bocoran RTP Slot Gacor Hari Ini

Slot Bonus New Member 100 di Awal

Slot Gacor Terbaru

Slot Deposit

RTP Slot Tertinggi

Rolet Online

Roulette

RTP Live Pragmatic

Bakarat Online

RTP Slot Gacor

Slot Bonus New Member 100 di Awal

RTP Live Pragmatic

Bonus New Member

Slot Gacor Terbaru

Slot Deposit

RTP Slot Tertinggi

slot online

slot online

RTP Live Pragmatic

slot online

Slot Deposit

Roulette

Depo 25 Bonus 25

Slot Gacor Terbaru

Roulette

Slot Gacor Gampang Menang

Slot Bonus New Member 100 di Awal

Agen Roulette Online

Slot Deposit Via Dana 10rb

slot tergacor

Agen Roulette Online

Slot Deposit Via Dana 10rb

sbobet 88

Slot Gacor Terpercaya

Slot Gacor Terpercaya

slot gampang jackpot

Akun Pro Kamboja

Judi Bola Online

Agen Casino Online

Agen Casino Online

sbobet 88

Slot Deposit Via Dana 10rb

Slot Deposit

slot gacor gampang menang

Casino Online Uang Asli

Bakarat

Slot Deposit

Casino Online Uang Asli

Depo 25 Bonus 25

Slot Bonus New Member 100 di Awal

Agen Roulette Online

slot gacor gampang menang

sbobet 88

RTP Slot

Slot Gacor Terpercaya

Agen Casino Online

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

Slot Deposit Via Dana 10rb

Slot Gacor Hari ini

slot gacor gampang menang

Agen Roulette Online

RTP Slot Tertinggi

Agen Roulette Online

Slot Bonus New Member 100 di Awal

Depo 25 Bonus 25

slot Gacor Terbaru

slot gacor gampang menang

Judi Bola

Slot Online Bonus New Member

Slot Gacor Online

Situs Judi Bola

Depo 25 Bonus 25

Slot Online Bonus New Member

Slot Gacor Resmi

Slot Gacor Gampang Menang

Slot

situs slot gacor

slot gacor

IDNPLAY

Situs Judi Bola

slot gacor 2023

situs slot gacor

Situs Slot Gacor

Slot Gacor Hari Ini

Slot Bonus New Member 100 di Awal

Slot Deposit Via Pulsa 10rb

Slot Gacor Maxwin

Situs Slot Gacor

slot resmi

situs slot gacor

Slot Deposit Via Dana 10rb

Situs Slot Resmi

Slot Gacor Hari Ini

Slot Gacor Hari Ini

slot gacor gampang menang

slot gacor

IDNPLAY

Situs Slot IDN

Situs IDN Slot Terpercaya

Daftar Poker Online

IDNPLAY

togel toto macau

agen poker online

idn poker online

Situs SBOBET

Slot Bet 500

idn play

idn play

Depo 25 Bonus 25

Situs IDN Slot Terpercaya

IDNPLAY

IDNPLAY

Situs SBOBET

Situs Slot IDN

Situs IDN Slot Terpercaya

Link Alternatif SBOBET

poker idn

poker idn

daftar poker online

daftar poker online

slot bonus

Situs Slot IDN

Situs SBOBET

Situs IDN Slot

poker

poker

Depo 25 Bonus 25

Slot777 Link Alternatif

togel hongkong

capsa online

Situs Slot IDN

Slot Bet 500

poker

poker

Slot Bet Kecil

Situs IDN Slot Terpercaya

capsa online

togel toto macau

idn slot online

Slot Bet 500

Situs Slot IDN

idn slot gacor online

ceme online

Poker IDN

domino qq login

Poker IDN

Poker IDN

Situs IDN Slot Terpercaya

Link Alternatif SBOBET

IDN Slot Gacor

Slot 777

IDN Play

poker idn

poker idn

poker online

poker online

Situs Slot777

SLOT IDN

IDN Slot Gacor

Slot 777

Poker Online

Poker Online

poker online

poker online

SLOT IDN

Slot Bonus

IDN Play

IDN Slot Gacor

Slot 777

IDN Slot Gacor

poker online

poker online

Situs IDN Poker

Situs IDN Poker

SLOT IDN

SBOBET88

Slot 777

IDN Slot Gacor

Poker Online

Poker Online

idn play

SLOT IDN

Slot Bonus

Situs IDN Poker

Situs IDN Poker

Slot IDN

Slot Gacor Hari Ini

IDN Slot Gacor

Poker IDN

Poker IDN

Poker IDN

Poker IDN

Slot Bonus New Member

IDN SLOT GACOR

Slot IDN

Slot Gacor Hari Ini

IDN Poker Login

IDN Poker Login

IDN Slot Gacor

Idn Slot Gacor

Slot Bonus New Member

IDN Poker Login

IDN Poker Login

Slot IDN

Slot Gacor 777

IDN Poker Login

IDN Poker Login

Situs IDN Slot

IDN Poker Login

IDN Poker Login

Slot Bonus New Member

Idn Slot Gacor

Slot 777

Slot IDN

situs idn slot

IDN Poker Online

IDN Poker Online

IDN Poker Login

IDN Poker Login

Slot777 Gacor

Slot IDN

Slot Gacor Gampang Menang

Situs IDN Poker

Situs IDN Poker

IDN Poker Login

IDN Poker Login

situs IDN Slot

Slot Bonus New Member

Idn Slot Gacor

Login Sbobet

Agen Sbobet

IDN Poker Online

situs IDN Poker

IDN Slot Gacor

IDN Poker Login

IDN Poker Login

Link Alternatif Sbobet

Link Alternatif Sbobet

Poker

Slot88

IDN Poker Online

IDN Poker Online

IDN Slot Gacor

IDN Slot Gacor

Idn Slot Gacor

Slot Bonus New Member

Link Alternatif Sbobet

Slot Bonus New Member

IDN Poker

Ceme

Ceme

Ceme

Ceme

ceme online

ceme online

ceme online

ceme online

ceme online