Ecommerce Business Loans

By | September 20, 2022
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While e-commerce businesses typically have lower start-up and ongoing costs than brick-and-mortar stores, many business owners may need financial assistance to start or develop an e-commerce website. Fortunately, a loan for your e-shop can help you.

Whether you are just starting out with e-commerce or looking to expand, an e-commerce loan can help cover your costs. Costs for e-commerce businesses include dropshipping, reselling items, manufacturing products from raw materials, hiring employees, marketing your business, and day-to-day operating costs. Existing e-commerce businesses often need funding for growth or expansion.

Our experts have reviewed and ranked the best e-commerce lenders for every type of small business need, so you can get the financing that's best for you.

Ecommerce Business Loans

How to choose the best loans for e-commerce business

When comparing financing for e-commerce businesses, it is important to consider the following factors. These are the same factors our experts used to rank and rate the best e-commerce lenders. They contain:

  • Loan Features: Features include loan amount, interest rates and fees, and loan terms.
  • Application Process: Evaluate the ease of the application process and how long it will take to get funding for your e-commerce store.
  • Interest rates and fees: Aim for the lowest APR and lowest fees you can qualify for based on your credit score.
  • Qualification Process: Check your business loan credit score requirements along with annual income and business history requirements to make sure you qualify before you apply.
  • Online user reviews: Check out sites like Trustpilot for independent customer reviews of the lender you're considering and make sure the quality of their customer service meets your expectations.
  • Perks and perks: Consider perks and perks like savings options, payment flexibility and advertising transparency.

Best Business Loans for E-Commerce - Complete Overview

1. Uncapped

Uncapped has developed a loan product that contributes to the e-commerce business. In fact, the lender only works with businesses with an online model. You can choose either fixed-term financing or income-based financing that protects you from unaffordable payments.
You can borrow between $10,000 and $10 million from Uncapped to grow your eCommerce business. Instead of interest, the loan provider charges a flat fee as a percentage of the loan amount, which ranges from 2% to 12%. There are no additional costs such as creation fees or prepayment penalties.

You can choose to repay the loan in fixed installments over a period of three to 24 months, or you can repay 5% to 25% of monthly sales until the principal and fee are paid off. There is no minimum credit score required, but you must be in business for at least six months and generate $10,000 or more in monthly revenue to be eligible.

2. Kabbage – best for those who have a decent monthly income

Backed by American Express, Kabbage Funding offers e-commerce loans to small businesses, among other cash flow management tools. You can apply for a Kabbage line of credit early and get access to $250,000 in capital. Business lines of credit provide borrowers with a set limit of funds that they can draw on when needed.

Backed by American Express, Kabbage Funding offers e-commerce loans to small businesses, among other cash flow management tools. You can apply for a Kabbage line of credit early and get access to $250,000 in capital. Business lines of credit provide borrowers with a set limit of funds that they can draw on when needed.

3. Biz2Credit — Best for working capital

Biz2Credit connects you with lenders that offer working capital financing for e-commerce businesses and term loans that can be used for a variety of business needs. It's best for businesses with at least six months of history that need more than $25,000 in working capital.
With Biz2Credit, you can borrow anywhere from $25,000 to $2 million in working capital financing or up to $500,000 in term loans. Term loans have terms of 12 to 36 months with simple interest starting at 7.99% plus an origination fee, while working capital loan terms and rates vary by lender.

You can pay daily, weekly or bi-weekly. Most customers who are approved for working capital have at least six months of business history, annual sales greater than $250,000, and a minimum credit score of 575. Most customers who are approved for a term loan have at least 18 months in business and a minimum credit score 660.

4. Fora Financial

If you want to borrow a small amount for a short period of time, Fora Financial offers small business loans and merchant cash advances starting at $5,000. This direct lender can approve your application within 24 hours and you can receive the funds within 72 hours. You can get a free, no-obligation quote to see what you're eligible for, which won't affect your credit.

With an early repayment discount, Fora Financial is ideal for e-shop owners who can quickly recoup their costs in revenue.
You can borrow between $5,000 and $750,000 from Fora Financial, either as a fixed term loan of 4 to 15 months or as a merchant cash advance, a more expensive form of financing where you pay back a percentage of your earnings. These unsecured loans can be used for any purpose.

Fora Financial uses factor rates ranging from 1.1 to 1.3 — remember to use the factor rate to determine your total loan cost when comparing Fora to other lenders. You can get a free quote without damaging your credit. There is no minimum credit score requirement and poor credit borrowers can apply. However, you must be in business for at least 6 months and have gross sales of $12,000 to qualify.

BlueVine

Bluevine offers lines of credit up to $250,000 with fast approval, low initial rates and no monthly fees or prepayment penalties. Bluevine is a great fit for creditworthy business owners who need constant access to funds. E-commerce owners who don't want to apply for a new line of credit every time they need it, such as those who need capital for new product drops, may find that Bluevine's line of credit suits their needs.

Bluevine offers lines of credit from $5,000 to $250,000 with simple interest rates starting at 4.8%. With a Bluevine line of credit, you can draw on funds as needed and repay in fixed monthly or weekly installments over six or 12 months. Interest rates are likely to be lower than a business credit card, and you can borrow more at once.

To qualify for a line of credit from Bluevine, you must have a personal credit score of at least 625, at least six months of business history and a monthly income of at least $10,000. As you make payments, you'll earn business credit and access more funds.

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