Ecommerce & Digital
Business Funding for Ecommerce Businesses
Ecommerce businesses tie up capital in inventory that must be purchased, shipped from manufacturers, stored in warehouses, and marketed before a single sale is made. The time between placing a purchase order and receiving customer payment can stretch 60 to 120 days when you factor in manufacturing, ocean freight, and Amazon or Shopify payout schedules. Seasonal demand spikes require you to place orders months in advance, and running out of stock during peak season means losing sales you cannot recover.
Common Uses
What Ecommerce Businesses Use Funding For
- Place bulk inventory orders with manufacturers, especially for Q4 holiday season
- Fund paid advertising on Google, Facebook, and Amazon to drive traffic and conversions
- Invest in warehouse space, fulfillment systems, and shipping infrastructure
- Launch new product lines that require upfront design, sampling, and minimum order quantities
Funding Options
Best Funding Types for Ecommerce Businesses
Inventory Financing
Borrow against the value of your existing or incoming inventory to fund large purchase orders. Ecommerce lenders evaluate your sell-through rate and average days of inventory to determine how much they will advance.
Revenue-Based Financing
Get an advance based on your monthly sales with repayments taken as a percentage of daily revenue. This works well for ecommerce because repayments naturally scale with your sales volume, protecting you during slow periods.
Business Line of Credit
A revolving line lets you fund ad spend, inventory, and operational costs as needed. Pay down the line from sales proceeds and redraw for the next purchase order or marketing campaign.
What Lenders Look For
Qualification Notes for Ecommerce Businesses
Related Industries
Related Ecommerce & Digital Funding
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