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E-Commerce Business Loans: Best Options for Online Businesses

While e-commerce businesses typically have fewer startup and ongoing costs than brick-and-mortar stores, many business owners may need financial assistance to start or grow an ecommerce website. Luckily, a loan for your e-commerce business can help.

Best E-Commerce Business Loans
Lindsay Frankel
Written by:Lindsay Frankel
Personal Finance Expert

Reviewed by: Sarah Brooks, Personal and Business Finance Writer and Editor

Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.

Whether you’re just starting an e-commerce business or you’re looking to expand, an e-commerce business loan can help cover your costs. Costs for e-commerce businesses include dropshipping, reselling items, manufacturing products from raw materials, hiring staff, marketing your business, and daily operating expenses. Existing e-commerce businesses often need funding to grow or expand.

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

Top Picks for Best E-Commerce Business Loans

Uncapped - Fast, flexible funding for your online business
  • Borrow up to $10 million
  • Fees as low as 2%
  • No minimum credit score
  • No personal guarantees required
No minimum credit score required
Loan Amount up to $10 million
Repayment 3 to 24 months
kabbage
  • No prepayment penalties and no origination fees
  • Easy application process
  • Monthly fee : 2-9% for 6 month loans, 4.5-18% for 12-month loans, 6.75-27% for 18-month loans
Min. Credit Score
Min. Credit Score 640
Loan Amount
Loan Amount $2K-$250K
Loan Repayment
Loan Repayment Up to 18 months
biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months

How to Choose the Best E-Commerce Business Loans

When comparing funding for e-commerce businesses, it’s important to consider the following factors. These are the same factors our experts used to evaluate and rank the top e-commerce lenders. They include:

  • Loan Features: Features include loan amounts, 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 business.
  • Interest Rates and Fees: Aim for the lowest APR and the fewest fees you can qualify for based on your creditworthiness.
  • Qualification Process: Look at the credit score requirements for your business loan, along with the annual revenue and business history requirements to make sure you qualify before applying.
  • Online User Reviews: Check sites like Trustpilot for independent customer reviews of the lender you are considering, and make sure that the quality of their customer service meets your expectations.
  • Perks and Bonuses: Consider perks and bonuses like savings opportunities, payment flexibility, and advertising transparency.

Best E-Commerce Business Loans - Full Overview

1. Uncapped - Best Overall

Uncapped has developed a loan product that is conducive to e-commerce businesses. In fact, the lender only works with businesses with an online model. You can choose either fixed-term or revenue-based financing, which helps protect you from unaffordable payments.

Pros
No personal or corporate guarantees
No hidden costs
Revenue-based financing available
Borrow up to $10 million
Free accounting tools included
Unlimited virtual cards for payments
Cons
Not available in select states
Not available to sole proprietors
Must have at least 6 months in business
uncapped review

You can borrow between $10,000 and $10 million from Uncapped to grow your e-commerce business. Instead of charging interest, the lender charges a flat fee as a percentage of the loan amount, which ranges from 2% to 12%. There are no other costs, such as origination fees or prepayment penalties.

You can choose to repay the loan in fixed installments over three to 24 months, or you can repay between 5% and 25% of your monthly sales until the principal and fee have been repaid. There’s no minimum credit score required, but you’ll need to have at least six months in business and earn $10,000 or more in monthly revenue to be eligible.

The Bottom Line

E-commerce businesses with fluctuating monthly sales will find the lending model at Uncapped especially appealing. If you’re looking for a fixed-term loan, however, be sure to compare the total cost of borrowing with more traditional business loans.

Try Uncapped

2. Kabbage - Best for Those With a Fair Monthly Revenue

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

Pros
Lending decision made quickly in most cases
No prepayment penalties
Fair monthly revenue requirement
No origination fees
Cons
Personal guarantee required
Confusing fee structure
Must be in business for 12 months
kabbage review

Kabbage lines of credit range from $2,000 to $250,000 and each draw is repaid in 6-, 12-, or 18-month installments. Six-month loan fees are 2-9%, 12-month loan fees are 4.5-18%, and 18-month fees are 6.75-27%. To qualify, you need a minimum credit score of 640, have been in business for at least one year, and have $3,000 or more in monthly revenue.

The Bottom Line

Most e-commerce lenders require at least $100,000 in annual revenue. Kabbage only requires $3,000 in monthly revenue, making them the ideal choice for businesses without high profit margins. With a line of credit, you only pay interest on the funds you use, making them a less expensive option compared to traditional loans.

Try Kabbage

3. Biz2Credit — Best for Working Capital

Biz2Credit connects you with lenders that offer working capital funding 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.

Pros
Quick and easy online application
Extended customer support hours
Fast funding within 72 hours
Flexible repayment schedule
High borrowing limits up to $2 million
Excellent independent customer service reviews
Cons
$250 to $400 closing fee
Not available to new businesses
Difficult to know rates before applying
Not available in all states
biz2credit review

With Biz2Credit, you can borrow anywhere from $25,000 to $2 million in working capital funding or up to a $500,000 term loan. Term loans have a 12- to 36-month term with simple interest starting at 7.99% plus an origination fee, while working capital loan terms and rates vary by lender.

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

The Bottom Line

With a short turnaround for funding and high borrowing limits, Biz2Credit makes it easy to get the funding you need quickly. The broker is best for existing businesses that need a lot of working capital to expand.

Try Biz2Credit

4. Fora Financial — Best for Small Loans

If you’re looking to borrow a small amount for a short 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 qualify for that won’t affect your credit.

With an early payoff discount, Fora Financial is ideal for e-commerce business owners who can quickly recoup their costs in revenue.

Pros
Quick and easy online application
Prequalify without hurting your credit
Fast funding within 72 hours
Friendly to poor credit borrowers
Early payoff discount on small business loans
No usage restrictions
Cons
Longest term is 15 months on small business loans
Requirements for business age and sales
Origination fee
fora financial review

You can borrow between $5,000 and $750,000 from Fora Financial, either as a loan with a set term of four to 15 months, or as a merchant cash advance, which is a more expensive form of financing in which you repay a percentage of your revenue. These unsecured loans can be used for any purpose.

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

The Bottom Line

Fora Financial is a great option for e-commerce business owners who need a quick, short-term loan for any business need. With loans starting at just $5,000, the lender is the recommended choice for borrowers in need of a small amount of cash.

5. BlueVine — Best for Line of Credit

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

Pros
Quick and easy online application
Same-day or next-day funding
No monthly fees or prepayment penalties
Rates as low as 4.8%
Access to more funds with positive repayment
Dedicated account representative
Excellent independent customer reviews
Cons
Restrictive eligibility criteria
Not available in all states
Mixed mobile app reviews
bluevine review

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 funds as needed and repay in fixed monthly or weekly payments over six or 12 months. Interest rates will likely be lower than a business credit card and you can borrow more at a time.

To be eligible 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 at least $10,000 in monthly revenue. As you make payments, you’ll build business credit and gain access to more funds.

The Bottom Line

Bluevine is ideal for e-commerce businesses that have ongoing funding needs or cash flow issues and need quick access to cash. Online retailers will appreciate the low rates, fast funding, and great customer service that Bluevine offers.

Try BlueVine

6. National Funding - Best For Fair Credit Loans

If you don’t have the best credit but need to cover day-to-day expenses, a working capital loan from National Funding can be a good fit. You may use the proceeds for payroll, platform payments, permits and licenses, and anything else you need to run your e-commerce store successfully.

Pros
Fair credit accepted
No risk to apply
Funding in as little as 24 hours from approval
Positive reviews
Early repayment discount
Available in all states
Cons
Daily or weekly repayments
Expensive rates and fees
Lack of transparency
High annual income requirements
national funding loan for ecommerce

National Funding’s short-term working capital business loans range from $5,000 to $500,000 with repayment terms between four months and two years. The pay rate starts at 1.10. For a chance at approval, you’ll need a credit score of at least 600, a business history of six months, and $250,000 or more in annual revenue. If you pay your loan in full within 100 days, you’ll receive a 7% discount on your balance.

The Bottom Line

A working capital loan from National Funding might make sense if you have fair credit but want to borrow up to $500,000 to cover your daily expenses. This is especially true if you can afford to pay it back on a daily or weekly basis.

Try National Funding

7. Fundera — Best for E-Commerce Startup Loans

Fundera by Nerdwallet is a broker that connects you with a variety of lenders. You’ll find many business loan types on the platform that would appeal to e-commerce business owners, including SBA loans, term loans, and merchant cash advances. There are also several options for new businesses with no history.

Pros
Loans available for poor credit borrowers
A variety of loan types, terms, and borrowing amounts
Prequalify with multiple lenders with a single application
Low starting rates
Startup loans available for new businesses
Customer support from a lending specialist
Excellent independent online reviews
Cons
Funding time varies and can be lengthy
Fees vary and can be costly
Fundera review

Since Fundera is a broker and not a direct lender, the rates, terms, and fees will vary. However, many lenders on the platform offer competitive rates. For example, the starting APR for SBA loans is 2.75%. Fundera doesn’t have minimum credit score requirements or business age or revenue requirements. Poor credit borrowers are welcome to apply, and there are options for startup e-commerce businesses as well.

The Bottom Line

Fundera is best for e-commerce business owners who want to check their rate with multiple lenders in one easy online application. Startups can find a variety of types of funding on the platform.

Try Fundera

8. SmartBiz — Best for SBA-Backed Loans

SmartBiz works with a network of banks to provide term loans as well as loans backed by the Small Business Administration. SmartBiz is the top facilitator in SBA 7(a) loans. The company also partners with lenders to provide custom financing. Funding time is a bit lengthy but faster than a bank, and rates are competitive. E-commerce business owners looking for good approval odds and low interest rates will appreciate the features of SBA loans from SmartBiz.

Pros
Streamlined online application
Low rates
Pre-qualify without hurting your credit
Flexible repayment terms
Top facilitator of SBA 7(a) loans
Cons
Loan consultants only available during business hours
Strict eligibility requirements
High minimum borrowing amount
7+ days to fund
Not all business types qualify

With SmartBiz SBA loans, you can borrow between $30,000 and $5 million with repayment terms ranging from 10 to 25 years. Interest rates range from 7.00% to 9.25%, and you’ll also pay about $450 in closing costs, a one-time application fee, and an SBA guarantee fee, unless you’re exempt.

You’ll need to have been in business for at least two years and have a personal credit score of at least 650 to qualify. SmartBiz term loans also come in amounts ranging from $30,000 to $300,000 but have repayment terms of two to five years. Rates start at 7.00%, and you’ll need two years in business and a personal credit score above 660 to apply.

The Bottom Line

SmartBiz is a great option for established business owners with good credit who need at least $30,000 and can wait a week to get their funding. The company’s reputation and highly competitive rates make it a great choice for e-commerce business owners.

Try SmartBiz

Best E-Commerce Business Loans — Main Features

Company Min. Credit Score Min. Time in Business Min. Revenue Loan Amount Interest Rate
Uncapped None 6 months $120,000 $10,000 to $10,000 2% and up
Kabbage 640 1 year $3,000 (monthly) $2,000 to $250,000 6-month loan: 2-9%
12-month loan: 4.5-18%
18-month loan: 6.75-27%
Biz2Credit 575 6 months $250,000 $250,000 to $2 million 7.99% and up
Fora Financial None 6 months $144,000 $5,000 to $750,000 1.1 to 1.3
Bluevine 625 6 months $120,000 Up to $250,000 4.8% and up
National Funding 600 6 months $250,000 $5,000 to $500,000 1.1 and up
Fundera None None None Varies 2.75% and up
SmartBiz 600 6 months $250,000 $30,000 to $5, million 7.0% and up

E-Commerce Business Expenses

Even though e-commerce businesses operate online, there are still expenses that come with running one. Possible business expenses include:

  • E-Commerce website: This includes the domain name, hosting, and CRM software. This can range from a few hundred per year to over $6,000 if you opt to use a designer.
  • Staff: Staff may include employees to help create and ship your product, web developers, marketing and social media specialists, customer service representatives, and more.
  • Insurance and fees: Each state may have different rules regarding e-commerce business operations and permits, and the fees will vary depending on the type of business you run and the state you live in.
  • Inventory and warehouse space: If you’re selling a product, you’ll need inventory. If it’s a large product,you may also need to finance a warehouse.
  • Marketing and advertising: This includes running ads on sites like Google and Facebook, direct and local marketing, hosting giveaways, attending networking events, and more. Most small businesses spend 7-12% of their revenue on marketing.
  • Platform fees: You’ll pay fees on the platforms you sell your products, such as Amazon, eBay, or Shopify.
  • Returns and refunds: Some customers won’t like the product and will send it back; others may receive a broken item and want a replacement. Unfortunately, returns and refunds are more of an expense that most e-commerce business owners realize.

Bottom line: you can expect to spend anywhere from a few thousand dollars to upwards of $200,000 or more per year on building and maintaining your website, hiring staff, purchasing equipment and inventory, and paying for marketing and advertising.

How Does E-Commerce Financing Work?

E-commerce business funding works similarly to other types of small business loans. The financial lender delivers an agreed-upon amount of capital to a qualified e-commerce company and charges interest and service fees to the borrowing company. Under the terms of the loan contract, the borrower repays the lender on a fixed basis (usually every 15 or 30 days) until the loan is fully repaid.

Before delivering the small business loan, the lender will vet the business and financial credentials of the e-commerce company, including credit history, annual revenue, and length in business. Once approved for the loan, the lender disperses the money as soon as the next business day.

How to Qualify for E-Commerce Financing

While qualifications for e-commerce financing will vary between lenders, you can typically expect you’ll need to meet the following minimum requirements:

  • 600 minimum credit score
  • 6+ months in business
  • $100,000 in annual revenue

Of course, some lenders will accept lower credit scores and have lower monthly revenue threshold requirements. The higher your credit score and stronger your business credentials, though, the less you’ll pay in interest rates and fees.

Here are 8 ways you can build your business credit >>

How to Apply for a Loan for an E-Commerce Business

Once you decide on a lender, you’ll fill out an initial application. Typically, these take just a few minutes to complete and you’ll receive a preliminary decision shortly upon submitting.

If the lender approves you initially, you’ll be asked to submit some business financials, including:

  • Your business tax ID
  • Personal and business tax returns
  • Bank statements
  • Collateral, if required
  • Legal documents, such as business licenses or leases

If additional paperwork is needed throughout the process, the lender will contact you. Once everything is submitted and approved, you can expect funds to be in your account within 24 to 72 hours.

Alternative Funding for an E-Commerce Business

Traditional financing options include term loans and lines of credit, mentioned above. However, there are other avenues you can explore, too, such as:

  • Microloans: These loans range from $1,000 to $50,000. If your business needs are modest, a microloan lender can seal the financing deal.
  • Peer-to-peer loans: Peer-to-peer financing platforms have grown substantially as digital lending has gone mainstream. For companies just starting out and who don’t need large amounts of financing, peer-to-peer lenders are well worth a closer look.
  • SBA loans: SBA loans are backed by the Small Business Administration and come with lower interest rates and better terms than traditional term loans. The paperwork process can be lengthy, but if you’re in no rush, the SBA is open to financing small businesses.

Conclusion

E-commerce business owners who need the funds to start or expand their business have a variety of online options to choose from. Funding times are quicker than traditional banks, and eligibility requirements are often less strict. If you need capital quickly, apply with one of the lenders recommended above so you can get back to focusing on your business.

Lindsay Frankel

Written by: Lindsay Frankel

Personal Finance Expert

Personal finance expert with 3 years experience specializing in researching, writing, and editing insurance, loans, and credit cards content.

More about me
Sarah Brooks

Reviewed by: Sarah Brooks

Personal Finance Writer and Editor

Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

More about me
Dr. JeFreda R. Brown-Xaris Financial Enterprises

Fact Checke by: Dr. JeFreda R. Brown

DBA, CFEI and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal to help others develop and maintain financial wellness.

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