Compare e-commerce business loans

How do e-commerce business loans work?

An e-commerce loan is a type of financing for small online retailers. It’s very similar to a business loan in that it’s money you borrow and repay with interest and fees. However, there are some financing options that only work for businesses that make money by selling goods online, such as PayPal Working Capital.

What kinds of loans are available to e-commerce businesses?

The first step to finding a loan is learning about options available for a unique business like yours.

• Term business loans. Covers one-time expenses like new equipment or more inventory.
• Lines of credit. Keeps things running during the off season by using what you need, when you need it.
• Microloans. A small loan that funds small projects that don’t need much capital.
• Peer-to-peer business loans. Get funding from investors interested in your business through peer-to-peer marketplaces like Bitbond.
• Small Business Administration loans. Find lower rates with a government-backed loan designed to help businesses that don’t qualify for other financing.
• Business cash advances. Also known as merchant cash advances, these provide funds based on your sales for a set fee or a percentage of your sales. But watch out: These loans can cost more than your typical business loan.

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Name	Product	Filter Values	Loan amount	Starting APR	Requirements
SellersFunding Business Loans			$5,000 – $500,000	14.99%	6+ months of Amazon sales history, $30,000+ in sales in the past 6 months, positive customer feedback, few returns, consistent sales activity	Cashflow solutions up to $100,000 made for Amazon sellers.	Check eligibility More Info		loading Fetching your data...
Credibly Business Loans			$5,000 – $250,000		6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits	Funding to cover business expenses with daily or weekly repayments.	Check eligibility More Info		loading Fetching your data...
LendingClub small business loans			$5,000 – $500,000	9.77%	12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better	With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.	Check eligibility More Info		loading Fetching your data...
Seek Business Capital			$5,000 – $500,000	Varies by lender	Personal credit of 680+, no bankruptcies in the last 4 years.	Startups and newer businesses could qualify for loans and credit cards with a custom financing package.	Check eligibility More Info		loading Fetching your data...

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Two benefits competitive e-commerce business loans will offer

• Favorable terms. Decide if your business needs money up front with a fixed term or more flexible access through a line of credit. A line of credit is helpful for businesses that anticipate a dip in sales at specific times of year. For one-time larger expenses, consider a fixed-term loan.
• Low costs. Lenders look at how much you want to borrow, your desired repayment term and your business’s financial history to determine your interest rate. Before you apply, get quotes from at least three lenders, and look at any origination, prepayment and application fees — which are often included in the APR.

What do I need to apply?

The documents you’ll need vary depending on the lender and loan you’re applying for, but you’ll likely need to provide:

• Your business’s financial records including monthly revenue and expenses.
• A business plan that details your strategy for growth.
• Your personal information including contact details and business ownership verification..

In some cases, you might need to provide your personal credit score.

Four tips for getting an e-commerce business loan

1. Wait until you’re ready ready. If you’re just starting out, avoid high interest rates and predatory fees by looking at other types of financing.
2. Have a killer business plan. Not only will a great business plan help you get the most from your loan, but it can also help you focus on your goals.
3. Know your cash flow. Finding the right loan for your business can be difficult if you don’t know how you’re going to pay it off. Go over the numbers, and take note of any patterns in your profits.
4. Boost your credit score. Taking steps to improve your credit score can help you get a better deal on rates and fees.

Are there other ways to fund my e-commerce business?

Yes. Loans are a common way to finance e-commerce businesses, but they aren’t your only option. Here are some alternatives:

• Investors. Get funding in exchange for ownership of a percentage of your business from venture capitalists, angel investors or investment corporations.
• Crowdfunding. Set up a page on a crowdfunding campaign to collect donations from your social circle and business’s fans.
• Friends or family. You probably won’t have to pay interest or fees when borrowing money from a wealthy acquaintance or relative — but you risk serious social consequences if you can’t pay them back.
• Personal loans. Consider taking out a personal loan to fund a fledgling business that doesn’t meet the age or revenue requirements for a business loan.

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Bottom line

Finding the right loan could make or break your online business. You could find that you’re eligible for options you might not have considered. If you’d like to explore even more types of financing options, you can compare a full range of business loans in our detailed guide. Be sure to read the fine print before settling on any lender.

Frequently asked questions

• Will I have to put up collateral for my e-commerce loan?

  You might, depending on the type of loan you take out. Equipment and auto loans can require borrowers to put their purchases up for collateral.

  If your business finances are strong, look into an unsecured business loan, which doesn’t require collateral.

• What happens if I can't repay my loan?

  If you can no longer make payments on your loan, call your loan provider as soon as possible. You might be able to work out an adjusted repayment plan.

• Can I get an e-commerce loan when my business is struggling?

  You can, but it’s not usually a good idea. Aside from running into trouble qualifying for a loan, if you can’t make your payments on time, you’ll pay any number of fees — and potentially dig your business into a hole of debt. Learn more about how to get financing for a struggling business.