E-commerce business loans

There are many aspects to operating a successful e-commerce store. Business owners may find they need extra cash flow to enhance a digital storefront, for inventory financing, marketing or even extra payroll needed to meet demand through the heights of their busiest seasons.

But, just like financing programs used in other industries, the best fit funding option depends on where and how the business plans to use its new funds.

Here is our breakdown of the best places for online retailers to do business and their options for getting those businesses funded.

Where to Sell - Setting up your eCommerce store

In 2020 the eCommerce market grew 44% to reach $4.04 trillion in sales in the United States.

Small business owners are going online more frequently than ever to take advantage of new online business opportunities. Online selling, and e-commerce platforms are the foundation of many of those opportunities. Some of the most popular places to sell online are Shopify, Amazon and eBay. Here is a quick overview of these three popular platforms.


Shopify is a leading ecommerce platform that provides entrepreneurs with hosting, website and content management systems to build an online store. By creating the store, business owners have first party access to the relationships and data provided by their customers. This level of access to customer information is one of the largest differences between Shopify and marketplace options like Amazon or eBay.

Shopify plans can range from the Basic at $29 per month to Advanced Shopify at $299. Many e-commerce businesses choose Shopify for the ease of use and the limited restrictions on how they can engage with customers.

An e-commerce marketplace is a website that provides a single place for buyers to purchase goods from multiple online vendors. As these sites often get more traffic, and monthly sales, than online stores for singe-brands, vendors often participate in marketplaces to access larger customer pools and grow their digital footprint.

Amazon and eBay are both popular e-commerce marketplace options. Here is what you can expect from each.


Selling with Amazon makes getting started easy with plans that range from individual to professional based on the size of the store you would like to stand up.

With the Individual plan, sellers pay $0.99 every time they make a sale. The Professional plan costs $39.99 per month, no matter how many items you sell. Amazon's seller plans also come with two additional fees that may be charged based on the amount of your sale and how it is fulfilled.

Amazon collects a referral fee on each sale. Amazon referral fees can range between 8% and 15% per of the total transaction. The second fee may only charged if you have chose to use Amazon to help deliver your goods. Fulfillment by Amazon includes charges needed to package and deliver your sold products to end customers.

Get more details on selling with Amazon at the Amazon sellers page.

For more information on costs and setup with Amazon you can visit their pricing page for a summary.


Business sellers looking for a familiar interface, may choose eBay as it has scaled options from its individual seller platform to fit e-commerce business needs.

Similar to Amazon eBay has multiple subscription models to get started in their marketplace. To start selling subscription plans range from Starter at $4.95 per month to Enterprise which comes in at $3,999.95 per month on an annual subscription.

eBay also charges additional fees for showing inventory over and above 200 items per store. Insertion fees are $0.35 per unit over the 200 unit cap. And, similar to Amazon, sellers must pay a fee on the total sale of a product. Final Value Fees are typically less than 10% of the sale.

Learn more about selling with eBay at their business sellers page.

Visit eBays Fees FAQ page to learn more about Insertion Fees and Final Value Fees.

The best Funding Options for Ecommerce Businesses

Peer-to-Peer Lending

Peer-to-Peer Lending

Peer-to-peer lending is the practice of one individual or business lending money to another individual or business. Peer to peer lending platforms work by matchmaking a lender with a borrower.

P2P lending platforms tout speedy application processes, and loan decisions that can be made in minutes. Repayment terms are often more flexible than those provided by banks, and range from as little as one month to five years. However, repayments are fixed, which may not be ideal for online businesses, who experience times when cash flow is tight.

While the APR may be lower when compared to traditional lenders, new online businesses may still struggle to secure funding, as some investors will require a minimum annual revenue.


Small Business Administration (SBA) Loans

The Small Business Administration supports the growth of entrepreneurship and small businesses through various training and funding programs. There is a variety of SBA loans, with each designed to meet the needs of particular businesses and economic situations.

For more information on operating a business or understanding SBA loan options visit the SBA's page for online businesses.

Bank Loans and Term Loans

Bank Loans and Term Loans

Term loans, also called small business term loans or term business loans, are traditional consumer lending products that are structured with a set interest rate and repayment term.

Since this type of loan is most closely associated wit traditional depository lenders, these financing options are often referred to as bank loans.

Explore term loan options offered by Biz2credit.

Repayment terms, like repayment period and frequency, for term loans can be more flexible than those found with other small business, or short-term loan options. For businesses with good credit these loans can be an accessible and useful option.

As term loans are the funding option most often made available by traditional lenders, loan origination can mean a more rigorous application process and higher minimum credit scores. Applying for this type of loan from a traditional lender also comes with the additional factor or time. Most banks and credit unions offering term loans have a longer origination process than will be found at alternative and online lenders.

To avoid some of the time and high credit requirements associated with traditional bank loans businesses can look toward working capital as an alternative.

Line of Credit

Line of Credit

A business line of credit, or line of credit is a flexible funding arrangement made between businesses and lenders. The line of credit can provide a set amount of money that can be drawn against as needed. Unlike traditional bank loans these business funding options are not used as a lump sum payout.

For many small businesses, lines of credit can function similarly to business credit cards, because they allow the borrower to draw from a total spending amount in smaller increments as needed.

Business lines of credit are a common financial option offered by traditional banks that may have strict credit score requirements. For that reason a line of credit may not be the first option for those with bad personal credit or a poor business credit history.

In this case, similar to bank loans, businesses with poor credit may choose alternatives like working capital and merchant cash advance. While these options do now provide the ability to take out small incremental amounts of money based on a total line of credit, they do offer faster approval processes and more flexible loan applications.

Merchant cash advance

Merchant cash advance

Merchant cash advance (MCA) is a short term funding option that is actually not a loan. MCAs provide borrowers an advance on future earnings from credit card sales. In doing so, this financing option determines loan amount and eligibility based on credit card sales and puts less weight on credit score.

Merchant cash advance is often used to meet business needs like payroll or other operational expenses. Because eligibility for MCAs is determined by cash flow this option is commonly used by startups, or those that may not have established credit or have low credit scores.

MCAs are most often provided by alternative lenders that specialize in small business loans. The eligibility, cash flow, and credit score requirements for MCAs can differ between these lenders based on their independent underwriting processes.

MCAs can be good options for businesses that have short term needs and want to increase cashflow quickly. Over time that reputation has made MCAs a go-to option for those looking for bad credit small business loans. However because the application process is easier and has fewer credit score requirements, these funding options often come with a higher cost attached.

Working capital

Working capital

Working capital loans are small business loan options determined by the amount of assets the business has divided by its liabilities or current debts. As a substitute to strict reliance on credit score requirements, lenders that offer working capital loans use the underwriting process to measure all aspects of business health.

Working capital options are designed as short term loans to help businesses with operational costs and the month-to-month revenue fluctuations that many small businesses face.

Explore working capital options with Biz2Credit.

For new businesses or those looking for bad credit business loans, working capital loans can be a strong option. Ability for the borrowing business to increase short-term cashflow without having to give up cash reserves can help businesses weather tough times or even jumpstart business growth.

Inventory financing

Inventory financing

Inventory financing is outside capital or credit available to businesses that may need to pre-order goods, or stock and warehouse those goods before they can be sold.

Using this type of financing, credit is given to small businesses based on the value of assets or inventory they have on hand. A percentage of the assets' value is then used to secure the loan. In both inventory lines of credit and inventory business loans, business owners use their existing assets as collateral to pay for new assets set for purchased by customers.

Inventory financing can be easier to get than other loan products because the value of the assets used as collateral secures the loan for the lender. This act of securing the loan means that there is less reliance on traditional factors like credit score and bank account balance. However the ease of access can increase risk for the business. Falling behind on monthly payments can result in the business losing the inventory that was used as collateral.

Marketplace Lending Sources

Recently e-commerce companies have added to the options for e-commerce funding by presenting their own loan offers to the online retailer market.

The most common ecommerce business loans in this space are coming from familiar names like Amazon and Shopify. Amazon Lending, Shopify Capital, Payabilty and Payoneer have all added to the funding options available for online retailers.

Funding from e-commerce companies falls into two categories - dedicated and universal lenders. As dedicated lenders, Amazon Lending and Shopify Capital offer financing to businesses that sell through their platforms. These lenders often have closer relationships with the stores and can used the store's sales history to inform creditworthiness without so much reliance on credit scores. Common uses for these funds are payroll, inventory and marketing funding.

Learn more at Shopify Capital and Amazon Lending.

Universal lenders like Payability and Payoneer are able to provide specialized e-commerce funding regardless of where the retailer sells its products. While these lenders do not have first part access to store data, they have build experience and specialized financial products to meet the needs of online sellers. In many cases these lenders also offer integrations to popular e-commerce platforms to help simplify data transfer and loan application processes.

Funds are often provided in the form of capital advance, working capital and line of credit.
Learn more about Payability and Payoneer.